UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2023

Or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-35392

RADIANT LOGISTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3625550
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Triton Tower Two

700 S Renton Village Place, Seventh Floor

Renton, Washington 98057

(Address of principal executive offices) (Zip Code)

(425) 462-1094

(Registrant’s telephone number, including area code)

N/A

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value	RLGT	NYSE American

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 preceding 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 every Interactive Data File required to be submitted 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 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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 47,579,832 shares outstanding of the registrant’s common stock as of May 5, 2023.

RADIANT LOGISTICS, INC.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
	Explanatory Note	3
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2023 and June 30, 2022	4
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended March 31, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2023 and 2022	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	40
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	42
Signatures		43

2

EXPLANATORY NOTE

As previously reported, Radiant Logistics, Inc., and its consolidated subsidiaries (the “Company”, “we” or “us”) were unable to timely file our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 as a result of the Audit and Executive Oversight Committee of the Board of Directors of the Company, after meeting with management and consultation with Moss Adams LLP, its current registered independent public accounting firm, and BDO USA, LLP, its predecessor registered independent public accounting firm, concluding that the Company’s previously issued financial statements for the fiscal year ended June 30, 2021 included in its Annual Report on Form 10-K, each of the interim financial statements for the quarterly periods in fiscal year 2021 included in its Quarterly Reports on Form 10‑Q, and each of the interim financial statements for the quarterly periods in fiscal year 2022 included in its Quarterly Reports on Form 10-Q (cumulatively, the “Restatement Periods”) should be restated to correct historical errors related principally to the timing of recognition of the Company’s estimated accrual of in-transit revenues and related costs.

Please refer to the Explanatory Note to our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, which was filed on February 27, 2023, for more information regarding the restatement. For a more detailed discussion of the correction of historical errors in the Restatement Periods, including for the three and nine months ended March 31, 2022, refer to Note 2 and 20 to the consolidated financial statements of the Company included in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022.
 

3

RADIANT LOGISTICS, INC.

Condensed Consolidated Balance Sheets

	March 31,			June 30,
(In thousands, except share and per share data)	2023			2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	51,008		$	24,442
Accounts receivable, net of allowance of $2,235 and $2,983, respectively		118,678			186,492
Contract assets		33,327			61,154
Prepaid expenses and other current assets		13,044			17,256
Total current assets		216,057			289,344
Property, technology, and equipment, net		25,252			24,823
Goodwill		88,969			88,199
Intangible assets, net		39,159			48,545
Operating lease right-of-use assets		58,307			41,111
Deposits and other assets		5,591			4,704
Long-term restricted cash		595			625
Total other long-term assets		192,621			183,184
Total assets	$	433,930		$	497,351
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	94,784		$	137,853
Operating partner commissions payable		16,920			18,731
Accrued expenses		7,183			11,349
Income tax payable		2,639			4,035
Current portion of notes payable		4,580			4,575
Current portion of operating lease liabilities		11,184			7,641
Current portion of finance lease liabilities		531			577
Current portion of contingent consideration		3,874			2,600
Other current liabilities		294			303
Total current liabilities		141,989			187,664
Notes payable, net of current portion		28,057			66,719
Operating lease liabilities, net of current portion		53,593			37,776
Finance lease liabilities, net of current portion		823			1,223
Contingent consideration, net of current portion		756			2,930
Deferred income taxes		2,304			6,482
Total long-term liabilities		85,533			115,130
Total liabilities		227,522			302,794
Commitments and contingencies (Note 15)
Equity:
Common stock, $0.001 par value, 100,000,000 shares authorized; 51,545,728 and 51,265,543     shares issued, and 48,181,256 and 48,740,935 shares outstanding, respectively		33			33
Additional paid-in capital		107,711			106,146
Treasury stock, at cost, 3,364,472 and 2,524,608 shares, respectively		(21,004	)		(16,004	)
Retained earnings		122,450			104,998
Accumulated other comprehensive loss		(3,251	)		(796	)
Total Radiant Logistics, Inc. stockholders’ equity		205,939			194,377
Non-controlling interest		469			180
Total equity		206,408			194,557
Total liabilities and equity	$	433,930		$	497,351

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

4

RADIANT LOGISTICS, INC.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
(In thousands, except share and per share data)	2023			2022			2023			2022
				(as restated)						(as restated)
Revenues	$	244,171		$	441,310		$	853,261		$	1,076,486
Operating expenses:
Cost of transportation and other services		177,154			357,849			635,736			857,169
Operating partner commissions		26,499			30,986			87,116			89,716
Personnel costs		19,817			19,853			60,229			52,165
Selling, general and administrative expenses		10,591			10,312			27,999			25,451
Depreciation and amortization		4,549			4,684			18,242			13,386
Transition, lease termination, and other costs		—			—			30			—
Change in fair value of contingent consideration		(697	)		152			(387	)		607
Total operating expenses		237,913			423,836			828,965			1,038,494
Income from operations		6,258			17,474			24,296			37,992
Other income (expense):
Interest income		216			4			315			10
Interest expense		(683	)		(1,001	)		(2,246	)		(2,359	)
Foreign currency transaction gain		331			105			802			480
Change in fair value of interest rate swap contracts		(355	)		1,985			231			1,562
Other		123			32			153			139
Total other income (expense)		(368	)		1,125			(745	)		(168	)
Income before income taxes		5,890			18,599			23,551			37,824
Income tax expense		(1,346	)		(4,276	)		(5,570	)		(9,191	)
Net income		4,544			14,323			17,981			28,633
Less: net income attributable to non-controlling interest		(361	)		(756	)		(529	)		(918	)
Net income attributable to Radiant Logistics, Inc.	$	4,183		$	13,567		$	17,452		$	27,715
Other comprehensive income (loss):
Foreign currency translation gain (loss)		122			479			(2,455	)		(443	)
Comprehensive income	$	4,666		$	14,802		$	15,526		$	28,190
Income per share:
Basic	$	0.09		$	0.27		$	0.36		$	0.55
Diluted	$	0.08		$	0.27		$	0.35		$	0.55
Weighted average common shares outstanding:
Basic		48,180,834			49,443,267			48,391,310			49,675,642
Diluted		49,304,991			50,632,293			49,679,999			50,843,179

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

5

RADIANT LOGISTICS, INC.

Condensed Consolidated Statements of Changes in Equity

Three and Nine Months Ended March 31, 2023

(unaudited)

	RADIANT LOGISTICS, INC. STOCKHOLDERS’ EQUITY
	Common Stock					Additional Paid-in			Treasury			Retained		Accumulated Other Comprehensive			Total Radiant Logistics, Inc. Stockholders’			Non- Controlling			Total
(In thousands, except share and per share data)	Shares			Amount		Capital			Stock			Earnings		Income (Loss)			Equity			Interest			Equity
Balance as of June 30, 2022		48,740,935		$	33	$	106,146		$	(16,004	)	$	104,998	$	(796	)	$	194,377		$	180		$	194,557
Repurchase of common stock		(219,517	)		—		—			(1,340	)		—		—			(1,340	)		—			(1,340	)
Issuance of common stock upon vesting of     restricted stock units, net of taxes withheld     and paid		152,881			—		(442	)		—			—		—			(442	)		—			(442	)
Issuance of common stock upon exercise of stock     options, net of taxes withheld and paid		411			—		1			—			—		—			1			—			1
Distribution to non-controlling interest		—			—		—			—			—		—			—			(75	)		(75	)
Share-based compensation		—			—		609			—			—		—			609			—			609
Net income		—			—		—			—			8,433		—			8,433			79			8,512
Other comprehensive loss		—			—		—			—			—		(3,478	)		(3,478	)		—			(3,478	)
Balance as of September 30, 2022		48,674,710		$	33	$	106,314		$	(17,344	)	$	113,431	$	(4,274	)	$	198,160		$	184		$	198,344
Repurchase of common stock		(620,347	)		—		—			(3,660	)		—		—			(3,660	)		—			(3,660	)
Issuance of common stock upon vesting of     restricted stock units, net of taxes withheld     and paid		24,606			—		(15	)		—			—		—			(15	)		—			(15	)
Issuance of common stock upon exercise of stock     options, net of taxes withheld and paid		100,863			—		192			—			—		—			192			—			192
Distribution to non-controlling interest		—			—		—			—			—		—			—			(75	)		(75	)
Share-based compensation		—			—		679			—			—		—			679			—			679
Net income		—			—		—			—			4,836		—			4,836			89			4,925
Other comprehensive income		—			—		—			—			—		901			901			—			901
Balance as of December 31, 2022		48,179,832		$	33	$	107,170		$	(21,004	)	$	118,267	$	(3,373	)	$	201,093		$	198		$	201,291
Issuance of common stock upon exercise of stock     options, net of taxes withheld and paid		1,424			—		(3	)		—			—		—			(3	)		—			(3	)
Distribution to non-controlling interest		—			—		—			—			—		—			—			(90	)		(90	)
Share-based compensation		—			—		544			—			—		—			544			—			544
Net income		—			—		—			—			4,183		—			4,183			361			4,544
Other comprehensive income		—			—		—			—			—		122			122			—			122
Balance as of March 31, 2023		48,181,256		$	33	$	107,711		$	(21,004	)	$	122,450	$	(3,251	)	$	205,939		$	469		$	206,408

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

6

RADIANT LOGISTICS, INC.

Condensed Consolidated Statements of Changes in Equity (continued)

Three and Nine Months Ended March 31, 2022

(unaudited)

	RADIANT LOGISTICS, INC. STOCKHOLDERS’ EQUITY
	Common Stock					Additional Paid-in			Treasury			Retained		Accumulated Other Comprehensive			Total Radiant Logistics, Inc. Stockholders’			Non- Controlling			Total
(In thousands, except share and per share data)	Shares			Amount		Capital			Stock			Earnings		Income (Loss)			Equity			Interest			Equity
												(as restated)					(as restated)						(as restated)
Balance as of June 30, 2021		49,930,389		$	32	$	104,228		$	(4,658	)	$	60,534	$	1,141		$	161,277		$	293		$	161,570
Repurchase of common stock		(254,894	)		—		—			(1,675	)		—		—			(1,675	)		—			(1,675	)
Issuance of common stock upon vesting of     restricted stock units, net of taxes withheld     and paid		115,616			—		(342	)		—			—		—			(342	)		—			(342	)
Issuance of common stock upon exercise of stock     options, net of taxes withheld and paid		21,553			—		124			—			—		—			124			—			124
Share-based compensation		—			—		350			—			—		—			350			—			350
Net income		—			—		—			—			7,609		—			7,609			86			7,695
Other comprehensive loss		—			—		—			—			—		(1,039	)		(1,039	)		—			(1,039	)
Balance as of September 30, 2021		49,812,664		$	32	$	104,360		$	(6,333	)	$	68,143	$	102		$	166,304		$	379		$	166,683
Issuance of common stock to     shareholders of acquired business		40,000			—		244			—			—		—			244			—			244
Repurchase of common stock		(615,839	)		—		—			(4,581	)		—		—			(4,581	)		—			(4,581	)
Issuance of common stock upon vesting of     restricted stock units, net of taxes withheld     and paid		43,326			1		(50	)		—			—		—			(49	)		—			(49	)
Issuance of common stock upon exercise of stock     options, net of taxes withheld and paid		118,831			—		280			—			—		—			280			—			280
Distribution to non-controlling interest		—			—		—			—			—		—			—			(150	)		(150	)
Share-based compensation		—			—		422			—			—		—			422			—			422
Net income		—			—		—			—			6,539		—			6,539			76			6,615
Other comprehensive income		—			—		—			—			—		117			117			—			117
Balance as of December 31, 2021		49,398,982		$	33	$	105,256		$	(10,914	)	$	74,682	$	219		$	169,276		$	305		$	169,581
Issuance of common stock upon exercise of stock     options, net of taxes withheld and paid		47,516			—		(11	)		—			—		—			(11	)		—			(11	)
Distribution to non-controlling interest		—			—		—			—			—		—			—			(210	)		(210	)
Share-based compensation		—			—		539			—			—		—			539			—			539
Net income		—			—		—			—			13,567		—			13,567			756			14,323
Other comprehensive income		—			—		—			—			—		479			479			—			479
Balance as of March 31, 2022		49,446,498		$	33	$	105,784		$	(10,914	)	$	88,249	$	698		$	183,850		$	851		$	184,701

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

7

RADIANT LOGISTICS, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Nine Months Ended March 31,
(In thousands)	2023			2022
				(as restated)
OPERATING ACTIVITIES:
Net income	$	17,981		$	28,633
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
Share-based compensation		1,832			1,311
Amortization of intangible assets		12,650			7,900
Depreciation and amortization of property, technology, and equipment		5,592			5,486
Deferred income tax benefit		(4,178	)		(918	)
Amortization of debt issuance costs		373			377
Change in fair value of contingent consideration		(387	)		607
Other		(64	)		1,316
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable		67,072			(73,002	)
Contract assets		27,738			(27,429	)
Income tax receivable/payable		(1,442	)		(764	)
Prepaid expenses, deposits, and other assets		3,440			(20,487	)
Operating lease right-of-use assets		6,228			6,732
Accounts payable		(43,738	)		68,553
Operating partner commissions payable		(1,811	)		1,150
Accrued expenses and other liabilities		(4,274	)		1,461
Operating lease liabilities		(8,407	)		(6,487	)
Payment of contingent consideration		(2,500	)		(1,377	)
Net cash provided by (used for) operating activities		76,105			(6,938	)
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired		(3,250	)		(38,400	)
Purchases of property, technology, and equipment		(7,063	)		(6,191	)
Proceeds from sale of property, technology, and equipment		77			158
Net cash used for investing activities		(10,236	)		(44,433	)
FINANCING ACTIVITIES:
Proceeds from revolving credit facility		67,500			116,144
Repayments of revolving credit facility		(102,500	)		(27,619	)
Payments of debt issuance costs		(820	)		—
Repayments of notes payable and finance lease liabilities		(3,711	)		(3,814	)
Proceeds from sale of common stock		—			244
Repurchases of common stock		(5,000	)		(6,256	)
Payment of contingent consideration		—			(1,123	)
Distributions to non-controlling interest		(240	)		(360	)
Proceeds from exercise of stock options		193			407
Payments of employee tax withholdings related to restricted stock units and stock options		(460	)		(406	)
Net cash provided by (used for) financing activities		(45,038	)		77,217
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		5,705			498
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		26,536			26,344
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD		25,067			14,344
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	51,603		$	40,688
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents	$	51,008		$	40,046
Long-term restricted cash		595			642
Total cash, cash equivalents, and restricted cash, end of period	$	51,603		$	40,688
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid	$	11,162		$	11,708
Interest paid	$	1,870		$	1,891

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

8

RADIANT LOGISTICS, INC.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

(Dollars in thousands, except share and per share data)

NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION

The Company

Radiant Logistics, Inc., and its consolidated subsidiaries (the “Company”, “we” or “us”) operates as a third-party logistics company, providing technology-enabled global transportation and value-added logistics solutions primarily in the United States and Canada. We service a large and diversified account base across a range of industries and geographies, which we support from an extensive network of 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, which includes over 100 operating locations. Included in these operating locations are a number of independent agents, who we also refer to as our “strategic operating partners”, that operate exclusively on our behalf, and approximately 25 Company-owned offices. As a third-party logistics company, we have a vast carrier network of asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines in our carrier network.

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 transportation services involve arranging shipments, 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. We also provide other value-added logistics services including materials management and distribution services (collectively, “materials management and distribution” or “MM&D” services), and customs house brokerage (“CHB”) services to complement our core transportation service offering.

Basis of Presentation

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 (“GAAP”) 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 consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

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.

Correction of Previously Reported Interim Condensed Consolidated Quarterly Financial Statement

The interim consolidated financial statements include corrections to the three and nine months ended March 31, 2022, which were presented in Note 20 to the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2022, in the Company’s fiscal year 2022 Form 10-K filed on February 27, 2023. This revision corrected differences between the estimated accrual amounts and the actual revenues and expenses recorded due primarily to errors in the underlying shipment information used to calculate the original estimates of the accrued amounts. The revision resulted in a decrease to net income attributable to Radiant Logistics, Inc. of $772 and a decrease to basic earnings per share of $0.02 and diluted earnings per share of $0.01 from amounts previously reported for the three months ended March 31, 2022, and a decrease to net income attributable to Radiant Logistics, Inc. of $651 and a decrease to basic earnings per share of $0.02 and diluted earnings per share of $0.01 from amounts previously reported for the nine months period ended March 31, 2022. Previously reported net cash used for operating activities, net cash used for investing activities, and net cash provided by financing activities for the three and nine months ended March 31, 2022 were not impacted.

9

The restated consolidated balance sheet line items as of March 31, 2022 are as follows:

	Originally Reported		Adjustment			Restated
(In thousands)	Q3		Q3			Q3
Contract assets	$	59,894	$	13,992		$	73,886
Total current assets		342,536		13,992			356,528
Total assets		554,934		13,992			568,926
Accounts payable		164,932		14,489			179,421
Operating partner commissions payable		16,038		178			16,216
Accrued expenses		11,512		(34	)		11,478
Income tax payable		4,271		(157	)		4,114
Total current liabilities		212,193		14,476			226,669
Total liabilities		369,749		14,476			384,225
Retained earnings		88,733		(484	)		88,249
Total equity		185,185		(484	)		184,701

The restated line items of the consolidated statements for comprehensive income for the three months ended March 31, 2022 are as follows:

	Originally Reported			Adjustment			Restated
(In thousands, except per share data)	Q3			Q3			Q3
Revenues	$	460,899		$	(19,589	)	$	441,310
Cost of transportation and other services		376,036			(18,187	)		357,849
Operating partner commissions		31,311			(325	)		30,986
Personnel costs		19,907			(54	)		19,853
Income from operations		18,497			(1,023	)		17,474
Income tax expense		(4,527	)		251			(4,276	)
Net income		15,095			(772	)		14,323
Net income attributable to Radiant Logistics, Inc.		14,339			(772	)		13,567
Income per share:
Basic	$	0.29		$	(0.02	)	$	0.27
Diluted	$	0.28		$	(0.01	)	$	0.27

The restated line items of the consolidated statements of comprehensive income for the nine months ended March 31, 2022 are as follows:

	Originally Reported			Adjustment			Restated
(In thousands, except per share data)	Nine Months Ended March 31, 2022			Nine Months Ended March 31, 2022			Nine Months Ended March 31, 2022
Revenues	$	1,079,783		$	(3,297	)	$	1,076,486
Cost of transportation and other services		858,447			(1,278	)		857,169
Operating partner commissions		90,825			(1,109	)		89,716
Personnel costs		52,211			(46	)		52,165
Income from operations		38,853			(861	)		37,992
Income tax expense		(9,402	)		211			(9,191	)
Net Income		29,284			(651	)		28,633
Net income attributable to Radiant Logistics, Inc.		28,366			(651	)		27,715
Income per share:
Basic	$	0.57		$	(0.02	)	$	0.55
Diluted	$	0.56		$	(0.01	)	$	0.55

The restated line items of the consolidated cash flow statements for the nine months ended March 31, 2022 are as follows:

	Originally Reported			Adjustment			Restated
(In thousands)	Nine Months Ended March 31, 2022			Nine Months Ended March 31, 2022			Nine Months Ended March 31, 2022
OPERATING ACTIVITIES:
Net income	$	29,284		$	(651	)	$	28,633
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH USED FOR OPERATING ACTIVITIES
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Contract assets		(30,725	)		3,296			(27,429	)
Income tax receivable/payable		(553	)		(211	)		(764	)
Accounts payable		69,832			(1,279	)		68,553
Operating partner commissions payable		2,259			(1,109	)		1,150
Accrued expenses, other liabilities, and operating lease liabilities		(4,980	)		(46	)		(5,026	)
Net cash used for operating activities		(6,938	)		—			(6,938	)

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NOTE 2 – RECENT ACCOUNTING GUIDANCE

Recent Accounting Guidance Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19, 2019-04, 2019-05, 2020-03, and 2022-02 (collectively, Topic 326). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 is effective for the Company in the first quarter of fiscal year 2024. The Company is currently evaluating the impact of the standard on its consolidated financial statements and disclosures.

Recently Adopted Accounting Guidance

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) and subsequent amendments to the initial guidance: ASU 2021-01, and ASU 2022-06, which provides temporary optional expedients and exceptions to the current guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The amendments are effective as of March 12, 2020 and apply to contract modifications made before December 31, 2024. The Company adopted Topic 848 on July 1, 2022. The adoption of Topic 848 had no impact on the Company’s financial statements or related disclosures.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Principles of Consolidation

The condensed consolidated financial statements include the accounts of Radiant Logistics, Inc. 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 11), an entity owned by the Company’s Chief Executive Officer. All significant intercompany balances and transactions have been eliminated.

Non-controlling interest in the condensed consolidated balance sheets represents RCP’s proportionate share of equity in RLP. Net income (loss) of non-wholly-owned consolidated subsidiaries or variable interest entities is allocated to the Company and the holder(s) of the non-controlling interest in proportion to their percentage ownership.

b) Use of Estimates

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. Actual results reported in future periods may be based upon amounts that could differ from these estimates due to the inherent uncertainty involved in making estimates and risks and uncertainties.

c) Cash, Cash Equivalents, and Restricted Cash

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. Cash equivalents consist of highly liquid investments with original maturities of three months or less. Restricted cash includes five months interest in a debt service reserve account for a senior secured Canadian term loan, which matures on April 1, 2024. The Company combines unrestricted and restricted cash for presentation in the Condensed Consolidated Statement of Cash Flows.

d) Accounts Receivable

The Company’s receivables are recorded when billed and represent amounts owed by third-party customers, as well as amounts owed by strategic operating partners. 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 an allowance for doubtful accounts to reduce the net recognized receivable to an amount the Company believes will be reasonably collected. The allowance for doubtful accounts is determined from the analysis of the aging of the accounts receivable, historical experience and knowledge of specific customers.

11

The Company derives a substantial portion of its revenue through independently owned strategic operating partner locations operating under various Company brands. Each strategic operating partner is responsible for some or all of the collection of the accounts related to the underlying customers being serviced by such strategic operating partner. To facilitate this arrangement, based on contractual agreements, certain strategic operating partners are required to maintain a bad debt reserve in the form of a security deposit with the Company. The Company charges each strategic operating partner’s bad debt reserve account for any accounts receivable aged beyond 90 days along with any other amounts owed to the Company by strategic operating partners. However, the bad debt reserve account may carry a deficit balance when amounts charged to this reserve account exceed amounts otherwise available. In these circumstances, a deficit bad debt reserve account is recognized as a receivable in the Company’s condensed consolidated financial statements. Some strategic operating partners are not required to establish a bad debt reserve; however, they are still responsible to make up for any deficits and the Company may withhold all or a portion of future commissions payable to the strategic operating partner to satisfy any deficit balance. Currently, a number of the Company’s strategic operating partners have a deficit balance in their bad debt reserve accounts. The Company expects to replenish these funds through the future business operations of these strategic operating partners or as their customers satisfy the amounts payable to the Company. However, to the extent any of these strategic 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 amounts and generally would reserve for them.

e) Property, Technology, and Equipment

Property, technology, and equipment is stated at cost, less accumulated depreciation, and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets. 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 expensed as incurred. Major renewals and improvements are capitalized.

f) Goodwill

Goodwill represents the excess acquisition cost of an acquired entity over the estimated fair values assigned to the net tangible and identifiable intangible assets acquired. The Company performs its annual goodwill impairment test as of April 1 of each year or more frequently if facts or circumstances indicate that the carrying amount may not be recoverable. Based on the most recent annual impairment test and further review by management, the Company concluded that there was no impairment.

An entity has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount prior to performing a quantitative impairment test. The qualitative assessment evaluates various factors, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact the fair value of the reporting unit. If it is determined that the estimated fair value of the reporting unit is more-likely-than-not less than its carrying amount, including goodwill, a quantitative assessment is required. Otherwise, no further analysis is required.

If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved, and multiples of current and future earnings, and market approach, which utilizes a selection of guideline public companies. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.

As of March 31, 2023, management believes there are no indications of impairment.

g) Long-Lived Assets

Long-lived assets, such as property, technology, and equipment and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted expected future cash flows to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent the carrying amount of the asset or asset group exceeds the fair value. Fair values of long-lived assets are determined through various techniques, such as applying probability weighted, expected present value calculations to the estimated future cash flows using assumptions a market participant would utilize or through the use of a third-party independent appraiser or valuation specialist. No impairment losses of long-lived assets were recorded during the nine months ended March 31, 2023 and 2022.

12

Intangible assets consist of customer related intangible assets, trade names and trademarks, developed technology, and non-compete agreements arising from the Company’s acquisitions. Customer related intangible assets, and trademarks and trade names are amortized using the straight-line method over periods of up to 15 years, non-compete agreements are amortized using the straight-line method over periods of up to five years, and developed technology is amortized using the straight-line method over five years.

h) Business Combinations

The Company accounts for business acquisitions using the acquisition method as required by FASB ASC Topic 805, Business Combinations. The assets acquired and liabilities assumed in business combinations, including identifiable intangible assets, are recorded based upon their estimated fair values as of the acquisition date. The excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired is recorded as goodwill. Acquisition expenses are expensed as incurred. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed as of the acquisition date, the estimates are inherently uncertain and subject to refinement.

The fair values of intangible assets are generally estimated using a discounted cash flow approach with Level 3 inputs. The estimate of fair value of an intangible asset 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 estimate fair value, the Company generally 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.

For acquisitions that involve contingent consideration, the Company records a liability equal to the fair value of the contingent consideration obligation as of the acquisition date. The Company determines the acquisition date fair value of the contingent consideration based on the likelihood of paying the additional consideration. The fair value is generally 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 fair value of the contingent consideration liability is recognized in the condensed consolidated statements of comprehensive income. Amounts are generally due annually on November 1st and 90 days following the quarter of the final earn-out period of each respective acquisition.

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 adjustment 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 recognized in the condensed consolidated statements of comprehensive income.

i) Revenue Recognition

The Company’s revenues are primarily from transportation services, which include providing for the arrangement of freight, both domestically and internationally, through modes of transportations, such as air freight, ocean freight, truckload, less than truckload and intermodal. The Company generates its transportation services revenue by purchasing transportation from direct carriers and reselling those services to its customers.

In general, each shipment transaction or service order constitutes a separate contract with the customer. A performance obligation is created once a customer agreement with an agreed upon transaction price exists. The transaction price is typically fixed and not contingent upon the occurrence or non-occurrence of any other event. The transaction price is generally due 30 to 45 days from the date of invoice. The Company’s transportation transactions provide for the arrangement of the movement of freight to a customer’s agreed upon destination. The transportation services, including certain ancillary services, such as loading/unloading, freight insurance and customs clearance, that are provided to the customer represent a single performance obligation as these promises aren’t distinct in the context of the contract. This performance obligation is satisfied over time and recognized in revenue upon the transfer of control of the services over the requisite transit period as the customer’s goods move from point of origin to point of destination. The Company determines the period to recognize revenue in-transit based upon the actual departure date and the delivery date, if available, or estimated delivery date based on the actual pick-up date and estimated average transit period by mode. Determination of the transit period and the percentage of completion of the shipment as of the reporting date requires management to make judgments that affect the timing of revenue recognition. The Company has determined that revenue recognition over the transit period provides a reasonable estimate of the transfer of services to its customers as it depicts the pattern of the Company’s performance under the contracts with its customers.

13

The Company also provides MM&D services for its customers under contracts generally ranging from a few months to five years and include renewal provisions. These MM&D service contracts provide for inventory management, order fulfilment and warehousing of the Customer’s product and arrangement of transportation of the customer’s product. The Company’s performance obligations are satisfied over time as the customers simultaneously receive and consume the services provided by the Company as they are performed. The transaction price is based on the consideration specified in the contract with the customer and contains fixed and variable consideration. In general, the fixed consideration component of a contract represents reimbursement for facility and equipment costs incurred to satisfy the performance obligation and is recognized on a straight-line basis over the term of the contract. The variable consideration component is comprised of cost reimbursement per unit pricing for time and pricing for materials used and is determined based on cost plus a mark-up for hours of services provided and materials used and is recognized over time based on the level of activity volume.

Other services include primarily CHB services sold on a standalone basis as a single performance obligation. The Company recognizes revenue from this performance obligation at a point in time, which is the completion of the services. Duties and taxes collected from the customer and paid to the customs agent on behalf of the customers are excluded from revenue. The Company also captures revenue through fees related to the use of its technology platform. The technology-related revenue includes platform fees, operational fees, and purchase order management fees.

The Company uses independent contractors and third-party carriers in the performance of its transportation services. The Company evaluates who controls the transportation services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Company determined it acts as the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified services, managing all aspects of the shipments process and assuming the risk of loss for delivery and collection. Such transportation services revenue is presented on a gross basis in the condensed consolidated statements of comprehensive income.

A summary of the Company’s gross revenues disaggregated by major service lines and geographic markets (reportable segments), and timing of revenue recognition for the three and nine months ended March 31, 2023 and 2022 are as follows:

	Three Months Ended March 31, 2023
(In thousands)	United States		Canada		Corporate/ Eliminations			Total
Major service lines:
Transportation services	$	203,062	$	26,361	$	(96	)	$	229,327
Value-added services (1)		5,382		9,462		—			14,844
Total	$	208,444	$	35,823	$	(96	)	$	244,171
Timing of revenue recognition:
Services transferred over time	$	207,061	$	35,803	$	(96	)	$	242,768
Services transferred at a point in time		1,383		20		—			1,403
Total	$	208,444	$	35,823	$	(96	)	$	244,171
	Nine Months Ended March 31, 2023
	United States		Canada		Corporate/ Eliminations			Total
Major service lines:
Transportation services	$	720,976	$	88,016	$	(351	)	$	808,641
Value-added services (1)		15,277		29,343		—			44,620
Total	$	736,253	$	117,359	$	(351	)	$	853,261
Timing of revenue recognition:
Services transferred over time	$	729,248	$	117,339	$	(351	)	$	846,236
Services transferred at a point in time		7,005		20		—			7,025
Total	$	736,253	$	117,359	$	(351	)	$	853,261

14

	Three Months Ended March 31, 2022
	United States		Canada		Corporate/ Eliminations			Total
(In thousands)	(as restated)							(as restated)
Major service lines:
Transportation services	$	388,350	$	41,075	$	(208	)	$	429,217
Value-added services (1)		5,654		6,439		—			12,093
Total	$	394,004	$	47,514	$	(208	)	$	441,310
Timing of revenue recognition:
Services transferred over time	$	391,267	$	47,514	$	(208	)	$	438,573
Services transferred at a point in time		2,737		—		—			2,737
Total	$	394,004	$	47,514	$	(208	)	$	441,310
	Nine Months Ended March 31, 2022
	United States		Canada		Corporate/ Eliminations			Total
(In thousands)	(as restated)							(as restated)
Major service lines:
Transportation services	$	944,467	$	101,838	$	(1,189	)	$	1,045,116
Value-added services (1)		10,875		20,495		—			31,370
Total	$	955,342	$	122,333	$	(1,189	)	$	1,076,486
Timing of revenue recognition:
Services transferred over time	$	950,891	$	122,333	$	(1,189	)	$	1,072,035
Services transferred at a point in time		4,451		—		—			4,451
Total	$	955,342	$	122,333	$	(1,189	)	$	1,076,486

(1)Value-added services include MM&D, CHB, technology platform fees, and other services.

Practical Expedients

The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contracts with its transportation customers have an expected duration of one year or less.

For the performance obligation to transfer MM&D services in contracts with customers, revenue is recognized in the amount for which the Company has the right to invoice the customer, as this amount corresponds directly with the value provided to the customer for the Company’s performance completed to date.

The Company also applies the practical expedient that permits the recognition of employee sales commissions related to transportation services as an expense when incurred since the amortization period of such costs is less than one year. These costs are included in the condensed consolidated statements of comprehensive income.

Contract Assets

Contract assets represent estimated amounts for which the Company has the right to consideration for the services provided while a shipment is still in-transit, for which it has not yet completed the performance obligation, where the customer has not yet been invoiced and unbilled amounts for which the Company has the right to consideration for services on completed shipments. Upon completion of the performance obligations and invoicing, which can vary in duration based upon the method of transport, these amounts become classified within accounts receivable.

Operating Partner Commissions

The Company enters into contractual arrangements with strategic operating partners that operate, on behalf of the Company, an office in a specific location that engages primarily in arranging, domestic and international, transportation services. In return, the strategic operating partner is compensated through the payment of sales commissions, which are based on individual shipments. The Company estimates and accrues the strategic operating partner’s commission obligation ratably as the goods are transferred to the customer.

15

j) Defined Contribution Savings Plans

The Company has an employee savings plan under which the Company provides safe harbor matching contributions. The Company’s contributions under the plan were $573 and $1,436 for the three and nine months ended March 31, 2023, respectively, and $507 and $1,191 for the three and nine months ended March 31, 2022, respectively.

k) Income Taxes

Income taxes are accounted for 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 records a liability for unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Interest and penalties, if any, are recorded as a component of interest expense or other expense, respectively. Currently, the Company does not have any accruals for uncertain tax positions.

l) Share-Based Compensation

The Company grants restricted stock awards, restricted stock units, performance unit awards, and stock options to certain directors, officers, and employees. The share-based compensation cost is measured at the grant date based on the fair value of the award and is expensed ratably over the vesting period. The fair value of each restricted stock and performance unit awards is the market price as of the grant date, and the fair value of each stock option grant is estimated as of the grant date using the Black-Scholes option pricing model. 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 option exercises and vesting of awards granted under its stock plans. Share-based compensation expense is reflected in the condensed consolidated statements of comprehensive income as part of personnel costs.

m) Basic and Diluted Income per Share Allocable to Common Stockholders

Basic income per common share is computed by dividing net income allocable to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is computed by dividing net income allocable to common stockholders by the weighted average number of common shares outstanding, plus the number of additional common shares that would have been outstanding if the potential common shares, such as restricted stock units and stock options, had been issued and were considered dilutive.

n) Foreign Currency Translation

For the Company’s 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 income (loss). Gains and losses on transactions of monetary items denominated in a foreign currency are recognized in other income (expense) in the condensed consolidated statements of comprehensive income.

o) Leases

The Company determines if an arrangement is a lease at inception. Assets and obligations related to operating leases are included in operating lease right-of-use (“ROU”) assets; current portion of operating lease liabilities; and operating lease liabilities, net of current portion in our condensed consolidated balance sheets. Assets and obligations related to finance leases are included in property, technology, and equipment, net; current portion of finance lease liabilities; and finance lease liabilities, net of current portion in our condensed consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on the information available at commencement date is used in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease, which the Company has not included in its calculation of ROU assets or lease liabilities as it is not reasonably certain that the option will be exercised in the normal course of business.

16

For the Company’s lease agreements containing fixed payments for both lease and non-lease components, the Company accounts for the components as a single lease component, as permitted. For leases with an initial term of twelve months or less, the Company elected the exemption from recording ROU and lease liabilities for all leases that qualify, and records rent expense on a straight-line basis over the lease term. Expenses for these short-term leases for the three and nine months ended March 31, 2023 and 2022 are immaterial.

Certain leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variable payments from lease ROU assets and lease liabilities, to the extent they are not considered fixed, and are expense as incurred. Variable lease costs for the three and nine months ended March 31, 2023 and 2022 are immaterial.

For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.

We perform an impairment analysis on ROU assets as of April 1 of each year or more frequently if facts or circumstances indicate, and as of March 31, 2023, there was no impairment to ROU assets.

p) Derivatives

Derivative instruments are recognized as either assets or liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.

For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in earnings with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in earnings. As of March 31, 2023, the Company does not have any derivatives designated as hedges.

For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are recognized in other income (expense) in the condensed consolidated statements of comprehensive income.

q) Treasury Stock

Treasury stock is reflected as a reduction of stockholders’ equity at cost. As of March 31, 2023, there have been no reissuances of treasury stock.

r) Reclassifications of Previously Issued Financial Statements

Certain amounts for prior periods have been reclassified in the consolidated financial statements to conform to the current year presentation. There has been no impact on previously reported net income or stockholders’ equity from such reclassifications.

NOTE 4 – EARNINGS PER SHARE

The computations of the numerator and denominator of basic and diluted income per share are as follows:

	Three Months Ended March 31,				Nine Months Ended March 31,
(In thousands, except share data)	2023		2022		2023		2022
			(as restated)				(as restated)
Numerator:
Net income attributable to Radiant Logistics, Inc.	$	4,183	$	13,567	$	17,452	$	27,715
Denominator:
Weighted average common shares outstanding, basic		48,180,834		49,443,267		48,391,310		49,675,642
Dilutive effect of share-based awards		1,124,157		1,189,026		1,288,689		1,167,537
Weighted average common shares outstanding, diluted		49,304,991		50,632,293		49,679,999		50,843,179
Potentially dilutive common shares excluded		110,000		110,000		106,667		114,928

NOTE 5 – LEASES

The Company has finance leases for equipment, and operating leases for office space, warehouse space, and other equipment with lease terms expiring at various dates through November 2033.

17

We have lease commitments that have been executed, but have not yet commenced. The undiscounted future lease payments of these commitments total $26,476 and are excluded from the tables below.

The components of lease expense were as follows:

	Three Months Ended March 31,				Nine Months Ended March 31,
(In thousands)	2023		2022		2023		2022
Operating:
Operating lease cost	$	4,027	$	2,575	$	10,650	$	7,386
Financing:
Amortization of leased assets		184		156		517		468
Interest on lease liabilities		16		24		53		79
Total finance lease cost	$	200	$	180	$	570	$	547

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended March 31,
(In thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows arising from operating leases	$	8,407	$	6,487
Operating cash flows arising from finance leases		53		80
Financing cash flows arising from finance leases		429		558
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	24,471	$	7,909

18

Supplemental balance sheet information related to leases was as follows:

	March 31,			June 30,
(In thousands)	2023			2022
Operating lease:
Operating lease right-of-use assets	$	58,307		$	41,111
Current portion of operating lease liabilities		11,184			7,641
Operating lease liabilities, net of current portion		53,593			37,776
Total operating lease liabilities	$	64,777		$	45,417
Finance lease:
Property, technology, and equipment, net	$	1,521		$	2,039
Current portion of finance lease liabilities		531			577
Finance lease liabilities, net of current portion		823			1,223
Total finance lease liabilities	$	1,354		$	1,800
Weighted average remaining lease term:
Operating leases	6.4 years			5.5 years
Finance leases	2.6 years			3.4 years
Weighted average discount rate:
Operating leases		5.16	%		4.33	%
Finance leases		4.50	%		4.54	%

As of March 31, 2023, maturities of lease liabilities for each of the next five fiscal years ending June 30 and thereafter are as follows:

(In thousands)	Operating			Finance
2023 (remaining)		3,555			150
2024		14,085			569
2025		13,647			539
2026		11,915			175
2027		10,424			—
Thereafter		24,114			—
Total lease payments		77,740			1,433
Less imputed interest		(12,963	)		(79	)
Total lease liabilities	$	64,777		$	1,354

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NOTE 6 – PROPERTY, TECHNOLOGY, AND EQUIPMENT

		March 31,			June 30,
(In thousands)	Useful Life	2023			2022
Computer software	3 - 5 years	$	26,983		$	26,324
Trailers and related equipment	3 - 15 years		6,625			6,639
Office and warehouse equipment	3 - 15 years		13,724			10,307
Leasehold improvements	(1)		8,782			7,588
Computer equipment	3 - 5 years		4,733			4,272
Furniture and fixtures	3 - 15 years		1,555			1,514
Property, technology, and equipment			62,402			56,644
Less: accumulated depreciation and amortization			(37,150	)		(31,821	)
Property, technology, and equipment, net		$	25,252		$	24,823

(1)The cost is amortized over the shorter of the lease term or useful life.

Depreciation and amortization expenses related to property, technology, and equipment were $1,908 and $5,592 for the three and nine months ended March 31, 2023, respectively, and $1,909 and $5,486 for the three and nine months ended March 31, 2022, respectively. Computer software includes approximately $686 and $1,032 of software in development as of March 31, 2023 and June 30, 2022, respectively.

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

The table below reflects the changes in the carrying amount of goodwill for the nine months ended March 31, 2023:

(In thousands)	Total
Balance as of June 30, 2022	$	88,199
Acquisition		1,766
Foreign currency translation loss		(996	)
Balance as of March 31, 2023	$	88,969

We considered uncertainties as part of our determination as to whether any triggering events occurred during the three months ended March 31, 2023, which would indicate an impairment of goodwill is more-likely-than-not. Based on our assessment, there were no triggering events identified that would have an adverse impact on our business; and therefore, no impairment was identified for our goodwill as of March 31, 2023.

The evaluation of impairment of goodwill requires the use of estimates about future operating results. Changes in forecasted operations can materially affect these estimates, which could materially affect our results of operations and financial condition. The estimates of expected future cash flows require significant judgment and are based on assumptions we determined to be reasonable; however, they are unpredictable and inherently uncertain, including, estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment within which we operate. There can be no assurance that our estimates and assumptions made for purposes of our impairment assessments as of the time of evaluation will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments, or anticipated growth rates are not correct, we may be required to record non-cash impairment charges in future periods, whether in connection with our normal review procedures periodically, or earlier, if an indicator of an impairment is present prior to such evaluation.

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Intangible Assets

The Company is in the process of rebranding certain trade names. We will rebrand certain trade names in connection with the Company’s long-term growth strategy and make it more consistent across our business and better serve our customers. We will gradually phase out certain trade names and will predominantly use Radiant to refer to the Company. The rebranding resulted in the reduction of the related useful lives of certain trade names and accelerated amortization expense from June 2022 to December 2022.

Intangible assets consisted of the following as of March 31, 2023 and June 30, 2022, respectively:

	March 31, 2023
(In thousands)	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer related	7.4 years	$	117,156	$	(84,509	)	$	32,647
Trade names and trademarks	7.9 years		15,443		(12,436	)		3,007
Licenses	4.0 years		770		(462	)		308
Developed technology (1)	3.7 years		4,091		(1,091	)		3,000
Covenants not to compete	1.8 years		1,433		(1,236	)		197
		$	138,893	$	(99,734	)	$	39,159

	June 30, 2022
(In thousands)	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer related	7.2 years	$	114,974	$	(78,736	)	$	36,238
Trade names and trademarks	3.8 years		15,700		(7,670	)		8,030
Licenses	4.8 years		808		(424	)		384
Developed technology (1)	4.4 years		4,091		(477	)		3,614
Covenants not to compete	2.6 years		1,433		(1,154	)		279
		$	137,006	$	(88,461	)	$	48,545

(1)Developed technology was acquired as one of the assets obtained in the acquisition of Navegate, Inc., which is described in Note 17.

Total amortization expense amounted to $2,641 and $12,650 for the three and nine months ended March 31, 2023, respectively, and $2,775 and $7,900 for the three and nine months ended March 31, 2022, respectively. Future amortization expense for each of the next five fiscal years ending June 30 are as follows:

(In thousands)
2023 (remaining)	$	2,641
2024		10,200
2025		8,210
2026		3,425
2027		2,852

NOTE 8 – NOTES PAYABLE

Notes payable consist of the following:

	March 31,			June 30,
(In thousands)	2023			2022
Revolving credit facility	$	27,525		$	62,525
Senior secured loans		5,238			8,902
Unamortized debt issuance costs		(126	)		(133	)
Total notes payable		32,637			71,294
Less: current portion		(4,580	)		(4,575	)
Total notes payable, net of current portion	$	28,057		$	66,719

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

(In thousands)
2023 (remaining)	$	1,117
2024		4,121
2025		—
2026		—
2027		—
Thereafter		27,525
Total	$	32,763

Revolving Credit Facility

The Company entered into a $200,000 syndicated, revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit Agreement dated as of August 5, 2022. The Revolving Credit Facility includes a $75,000 accordion feature to support future acquisition opportunities. The Revolving Credit Facility was entered into with Bank of America, N.A. and BMO Capital Markets Corp. as joint book runners and joint lead arrangers, Bank of America, N.A. as Administrative Agent, Swingline Lender and Letter of Credit Issuer, Bank of Montreal as syndication agent, KeyBank National Association and MUFG Union Bank, N.A. as co-documentation agents and Bank of America, N. A., Bank of Montreal, KeyBank National Association, MFUG Union Bank, N.A. and Washington Federal Bank, National Association as lenders (such named lenders are collectively referred to herein as “Lenders”).

The Revolving Credit Facility has a term of five years and is collateralized by a first-priority security interest in the accounts receivable and other assets of the Company and the guarantors named below on a parity basis with the security interest held by Fiera Private Debt Fund IV LP and Fiera Private Debt Fund V LP described below. Borrowings under the Revolving Credit Facility accrue interest (at the Company’s option), at a) the Lenders’ base rate plus 0.75% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at the Lenders’ base rate plus 0.50% to 1.50%; b) Term SOFR plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFR plus 1.40% to 2.40%; and c) Term SOFR Daily Floating Rate plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFR Daily Floating Rate plus 1.40% to 2.40%. The Company’s U.S. and Canadian subsidiaries are guarantors of the Revolving Credit Facility. As of March 31, 2023, the interest rate was 6.19%.

For general borrowings under the Revolving Credit Facility, the Company is subject to the maximum consolidated net leverage ratio of 3.00 and minimum consolidated interest coverage ratio of 3.00. Additional minimum availability requirements and financial covenants apply in the event the Company seeks to use advances under the Revolving Credit Facility to pursue acquisitions or repurchase its common stock.

Senior Secured Loans

In connection with the Company’s acquisition of Radiant Canada (formerly, Wheels International Inc.), Radiant Canada obtained a CAD$29,000 senior secured Canadian term loan from Fiera Private Debt Fund IV LP (“FPD IV” formerly, Integrated Private Debt Fund IV LP) pursuant to a CAD$29,000 Credit Facilities Loan Agreement. The Company and its U.S. and Canadian subsidiaries are guarantors of the Radiant Canada 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 FPD IV. As of March 31, 2023, the amount of $595 is recorded as long-term restricted cash in the accompanying condensed consolidated financial statements. The Company made interest-only payments for the first twelve months followed by monthly principal and interest payments of CAD$390 that will be paid through maturity. As of March 31, 2023, $3,613 was outstanding under this term loan.

In connection with the Company’s acquisition of Lomas, Radiant Canada obtained a CAD$10,000 senior secured Canadian term loan from Fiera Private Debt Fund V LP (formerly, Integrated Private Debt Fund V LP) pursuant to a CAD$10,000 Credit Facilities Loan Agreement. The Company and its U.S. and Canadian subsidiaries are guarantors of the Radiant Canada obligations thereunder. The loan matures on June 1, 2024 and accrues interest at a fixed rate of 6.65% per annum. The loan repayment consists of monthly principal and interest payments of CAD$149. As of March 31, 2023, $1,625 was outstanding under this term loan.

The loans may be prepaid in whole at any time providing the Company gives at least 30 days prior written notice and pays 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 the maturity date, and (ii) the face value of the principal amount being prepaid.

The covenants of the Revolving Credit Facility, described above, also apply to the FPD IV and FPD V term loans. As of March 31, 2023, the Company was in compliance with all of its covenants.

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NOTE 9 – DERIVATIVES

All derivatives are recognized on the Company’s condensed consolidated balance sheets at their fair values and consist of interest rate swap contracts. On March 20, 2020, and effective April 17, 2020, Radiant entered into an interest rate swap contract with Bank of America to trade variable interest cash inflows at one-month LIBOR for a $20,000 notional amount, for fixed interest cash outflows at 0.635%. On April 1, 2020, and effective April 2, 2020, Radiant entered into an interest rate swap contract with Bank of America to trade the variable interest cash inflows at one-month LIBOR for a $10,000 notional amount, for fixed interest cash outflows at 0.5865%. Both interest rate swap contracts mature and terminate on March 13, 2025.

The Company uses an interest rate swap for the management of interest rate risk exposure, as the interest rate swap effectively converts a portion of the Company’s Revolving Credit Facility from a floating to a fixed rate. The interest rate swap is an agreement between the Company and Bank of America to pay, in the future, a fixed rate payment in exchange for Bank of America paying the Company a variable payment. The net payment obligation is based on the notional amount of the swap contract and the prevailing market interest rates. The Company may terminate the swap contract prior to its expiration date, at which point a realized gain or loss would be recognized. The value of the Company’s commitment would increase or decrease based primarily on the extent to which interest rates move against the rate fixed for each swap. The derivative instruments had a total notional amount of $30,000 and a fair value of $2,077 and $1,846 recorded in deposits and other assets in the condensed consolidated balance sheets as of March 31, 2023 and June 30, 2022, respectively.

Neither interest rate swap contracts is designated as a hedge; gains and losses from changes in fair value are recognized in other income (expense) in the condensed consolidated statements of comprehensive income. See Note 12 for discussion of fair value of the derivative instruments.

NOTE 10 – STOCKHOLDERS’ EQUITY

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. No shares of preferred stock are issued or outstanding on March 31, 2023 or June 30, 2022.

Common Stock

In February 2022, 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, 2023. Under the stock repurchase program, the Company is 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 does not obligate the Company to repurchase any specific number of shares and could be suspended or terminated at any time without prior notice. Under our repurchase programs, the Company purchased 839,864 shares of its common stock at an average cost of $5.95 per share for an aggregate cost of $5,000 and 870,733 shares of its common stock at an average cost of $7.18 per share for an aggregate cost of $6,256 during the nine months ended March 31, 2023 and 2022, respectively.

NOTE 11 – VARIABLE INTEREST ENTITY AND RELATED PARTY TRANSACTIONS

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 60% 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 members 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 sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties are considered variable interest entities. The Company has power over significant activities of RLP including the fulfillment of its contracts and financing its operations. Additionally, the Company also pays expenses and collects receivables on behalf of RLP. Thus, the Company is the primary beneficiary, RLP qualifies as a variable interest entity, and RLP is consolidated in these condensed consolidated financial statements.

RLP recorded $602 and $882 in net income, of which RCP’s distributable share was $361 and $529 for the three and nine months ended March 31, 2023, respectively. RLP recorded $1,260 and $1,531 in net income, of which RCP’s distributable share was $756 and $918 for the three and nine months ended March 31, 2022, respectively. The non-controlling interest recorded as a reduction of net income available to common stockholders in the condensed consolidated statements of comprehensive income represents RCP’s distributive share.

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NOTE 12 – FAIR VALUE MEASUREMENT

The accounting guidance for fair value, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The framework for measuring fair value consists of a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. 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 fair value measurement level within the hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:

•Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;

•Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost); and

•Income approach: Techniques to convert future amounts to a single present amount based upon market expectations, including present value techniques, option-pricing, and excess earning models.

Items Measured at Fair Value on a Recurring Basis

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

(In thousands)	Fair Value Measurements as of March 31, 2023
	Level 3			Total
Contingent consideration	$	(4,630	)	$	(4,630	)
Interest rate swap contracts (derivatives)		2,077			2,077
	Fair Value Measurements as of June 30, 2022
	Level 3			Total
Contingent consideration	$	(5,530	)	$	(5,530	)
Interest rate swap contracts (derivatives)		1,846			1,846

The following table provides a reconciliation of the financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3):

(In thousands)	Contingent Consideration			Interest Rate Swap Contracts (derivatives)
Balance as of June 30, 2022	$	(5,530	)	$	1,846
Increase related to acquisition		(1,987	)		—
Contingent consideration paid		2,500			—
Change in fair value		387			231
Balance as of March 31, 2023	$	(4,630	)	$	2,077

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 their stated earn-out periods. Contingent consideration is measured quarterly at fair value, and any change in the fair value of the contingent liability is included in the condensed consolidated statements of comprehensive income. The change in fair value in each period is principally attributable to a change in management’s estimates of future earn-out payments through the remainder of the earn-out periods.

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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 then 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 through earn-out periods measured through September 2024, although there are no maximums on certain earn-out payments.

For contingent consideration the following table provides quantitative information about the significant unobservable inputs used in fair value measurement:

(In thousands)	Fair Value			Valuation Methodology	Unobservable Inputs
DCA contingent consideration	$	(3,470	)	Discounted cash flows	Actual EBITDA over the three-year earn-out period ended January 2023	> $14,900
					Risk-adjusted discount rate		12.0	%
Cascade contingent consideration	$	(1,159	)	Discounted cash flows	Projected gross margin over the two-year earn-out period ending September 2024	>$6,400
					Risk-adjusted discount rate		16.9	%

As discussed in Note 9, derivative instruments are carried at fair value on the condensed consolidated balance sheets. Interest rate swap contracts are included in deposits and other assets.

Fair Value of Financial Instruments

The carrying values of the Company’s cash equivalents, receivables, contract assets, accounts payable, commissions payable, accrued expenses, and the income tax receivable and payable approximate the fair values due to the relatively short maturities of these instruments. The carrying value of the Company’s Revolving Credit Facility and notes payable would not differ significantly from fair value (based on Level 2 inputs) if recalculated based on current interest rates.

NOTE 13 – INCOME TAXES

For the three and nine months ended March 31, 2023 and 2022, respectively, the Company’s income tax expense is composed of the following:

	Three Months Ended March 31,						Nine Months Ended March 31,
(In thousands)	2023			2022			2023			2022
				(as restated)						(as restated)
Current income tax expense	$	3,858		$	4,660		$	9,748		$	10,109
Deferred income tax benefit		(2,512	)		(384	)		(4,178	)		(918	)
Income tax expense	$	1,346		$	4,276		$	5,570		$	9,191

The Company’s effective tax rates prior to discrete items for the three and nine months ended March 31, 2023 and 2022 are higher than the U.S. federal statutory rates primarily due to the jurisdictional mix of income and state taxes. Income tax expense for the nine months ended March 31, 2023 results in an effective tax rate of 24.55%, which is higher than the U.S. federal statutory rate due to jurisdictional mix of income and state taxes, and reduced by share-based compensation benefits, which is discretely recognized through the nine months ended March 31, 2023 and is not a component of the Company’s annualized forecasted effective tax rate for the fiscal year ending June 30, 2023. The actual income tax through the nine months ended March 31, 2022 was 25.52%, which was higher than the U.S. federal statutory rate due to earnings in foreign operations and state taxes and reduced by share-based compensation benefits. The Company does not have any uncertain tax positions.

NOTE 14 – SHARE-BASED COMPENSATION

On November 17, 2021, the Company’s stockholders, upon recommendation of the Board of the Company, approved the Radiant Logistics, Inc. 2021 Omnibus Incentive Plan (the “2021 plan”) at the 2021 annual meeting of stockholders. The Board previously approved the 2021 Plan, subject to approval by the Company’s stockholders, on September 27, 2021.

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The 2021 Plan became effective immediately upon approval by the Company’s stockholders and will expire on November 16, 2031, unless terminated earlier by the Board. The 2021 plan replaces the 2012 Radiant Logistics, Inc. Stock Option and Performance Award Plan (the “2012 plan”). The remaining shares available for grant under the 2012 plan will roll over into the 2021 plan, and no new awards will be granted under the 2012 plan. The terms of the 2012 plan, as applicable, will continue to govern awards outstanding under the 2012 plan, until exercised, expired, paid or otherwise terminated or canceled. Other than the 2021 plan, we have no other equity compensation plans under which equity awards can be granted.

The 2021 Plan will permit the Company’s Audit and Executive Oversight Committee to grant to eligible employees, non-employee directors and consultants of the Company non-statutory and incentive stock options, stock appreciation rights (also known as SARs), restricted stock awards, restricted stock units (also known as RSUs), deferred stock units (also known as DSUs), performance awards, non-employee director awards, other cash-based awards and other share-based awards. Subject to adjustment, the maximum number of shares of our common stock to be authorized for issuance under the 2021 Plan is 3,250,000 shares, plus (i) shares of our common stock remaining available for issuance under the 2012 Plan as of the date of stockholder approval of the 2021 Plan, but not subject to outstanding awards as of such date, plus (ii) the number of additional shares of our common stock subject to awards outstanding under the 2012 Plan as of the date of stockholder approval of the 2021 Plan that are subsequently forfeited, cancelled, expire or otherwise terminate without the issuance of such shares of our common stock after such date (which may otherwise be returned and available for grant under the term of the 2012 Plan and 2021 Plan).

Restricted Stock Units

The Company recognized share-based compensation expense related to restricted stock units of $525 and $1,779 for the three and nine months ended March 31, 2023, respectively, and $522 and $1,259 for the three and nine months ended March 31, 2022, respectively. As of March 31, 2023, the Company had approximately $3,626 of total unrecognized share-based compensation cost for restricted stock units expected to be recognized over a weighted average period of approximately 1.80 years.

The following table summarizes restricted stock unit activity under the plans:

	Number of Units			Weighted Average Grant Date Fair Value
Unvested balance as of June 30, 2022		962,998		$	6.17
Vested		(246,229	)		5.56
Granted		333,803			6.90
Forfeited		(24,021	)		6.08
Unvested balance as of March 31, 2023		1,026,551		$	6.56

Stock Options

Stock options are granted at exercise prices equal to the fair value of the common stock at the date of the grant and have a term of ten years. Generally, grants under each plan vest 20% annually over a five-year period from the date of grant. The Company recognized share-based compensation expense related to stock options of $18 and $53 for the three and nine months ended March 31, 2023, respectively, and $17 and $52 for the three and nine months ended March 31, 2022, respectively. The aggregate intrinsic value of options exercised was $11 and $341 for the three and nine months ended March 31, 2023, respectively, and $356 and $939 for the three and nine months ended March 31, 2022, respectively. As of March 31, 2023, the Company had approximately $226 of total unrecognized share-based compensation cost for stock options expected to be recognized over a weighted average period of approximately 3.18 years.

The following table summarizes stock option activity under the plans:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding as of June 30, 2022		1,105,084		$	4.06		3.09	$	3,719
Exercised		(104,327	)		1.91		—		341
Outstanding as of March 31, 2023		1,000,757		$	4.28		2.55	$	2,372
Exercisable as of March 31, 2023		920,757		$	4.01		2.06	$	2,372

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NOTE 15 – COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is involved in various claims and legal actions arising in the ordinary course of business. The Company records accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. Legal expenses are expensed as incurred. There were no potentially material legal proceedings as of March 31, 2023.

On December 8, 2021, the Company detected a ransomware incident impacting certain of the Company’s operational and information technology systems. While the Company’s systems recovery efforts are complete, and the Company’s operations are fully functional, the incident did result in a loss of revenue as well as certain incremental costs. In addition, following an extensive forensic investigation by a team of cybersecurity experts, the Company confirmed that some data extraction related to the Company’s customers and employees occurred before the Company took its systems offline. We notified law enforcement, provided notice to customers apprising them of the situation and provided any notices that may be required by applicable law related to potential Personal Identifiable Information (PII data) exposure. Although the Company acted promptly and as efficiently as possible any failure of the Company to comply with data privacy or other laws and regulations related to this event could result in claims, legal or regulatory proceedings, inquiries, or investigations.

Contingent Consideration and Earn-out Payments

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. Earn-out payments are generally due annually on November 1st and 90 days following the quarter of the final earn-out period for each respective acquisition.

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

(In thousands)	2023 (remaining)		2024		2025		Total
Earn-out payments:
Cash	$	347	$	3,522	$	761	$	4,630
Total estimated earn-out payments	$	347	$	3,522	$	761	$	4,630

Other Contractual Commitments

As of March 31, 2023, we have $2,171 of non-cancelable contractual commitments related to warehouse equipment due within one year.

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NOTE 16 – OPERATING AND GEOGRAPHIC SEGMENT INFORMATION

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 and reportable segments: United States and Canada.

The Company evaluates the performance of the segments primarily based on their respective revenues and income from operations. In addition, the Company includes the costs of the Company’s executives, board of directors, professional services, such as legal and consulting, amortization of intangible assets, and certain other corporate costs associated with operating as a public company as Corporate.

As of and for the Three Months Ended March 31, 2023						Corporate/
(In thousands)	United States		Canada			Eliminations			Total
Revenues	$	208,444	$	35,823		$	(96	)	$	244,171
Income (loss) from operations		7,546		2,914			(4,202	)		6,258
Other income (expense)		413		41			(822	)		(368	)
Income (loss) before income taxes		7,959		2,955			(5,024	)		5,890
Depreciation and amortization		1,069		838			2,642			4,549
Total assets		325,896		108,034			—			433,930
Property, technology, and equipment, net		9,953		15,299			—			25,252
Goodwill		68,991		19,978			—			88,969
As of and for the Three Months Ended March 31, 2022	United States		Canada			Corporate/ Eliminations			Total
(In thousands)	(as restated)								(as restated)
Revenues	$	394,004	$	47,514		$	(208	)	$	441,310
Income (loss) from operations		17,381		3,991			(3,898	)		17,474
Other income (expense)		166		(29	)		988			1,125
Income (loss) before income taxes		17,547		3,962			(2,910	)		18,599
Depreciation and amortization		1,440		947			2,297			4,684
Total assets		472,980		95,946			—			568,926
Property, technology, and equipment, net		12,331		13,616			—			25,947
Goodwill		67,226		21,587			—			88,813
As of and for the Nine Months Ended March 31, 2023						Corporate/
(In thousands)	United States		Canada			Eliminations			Total
Revenues	$	736,253	$	117,359		$	(351	)	$	853,261
Income (loss) from operations		27,836		13,720			(17,260	)		24,296
Other income (expense)		564		391			(1,700	)		(745	)
Income (loss) before income taxes		28,400		14,111			(18,960	)		23,551
Depreciation and amortization		4,206		2,407			11,629			18,242
Total assets		325,896		108,034			—			433,930
Property, technology, and equipment, net		9,953		15,299			—			25,252
Goodwill		68,991		19,978			—			88,969
As of and for the Nine Months Ended March 31, 2022	United States		Canada			Corporate/ Eliminations			Total
(In thousands)	(as restated)								(as restated)
Revenues	$	955,342	$	122,333		$	(1,189	)	$	1,076,486
Income (loss) from operations		39,438		11,245			(12,691	)		37,992
Other income (expense)		485		135			(788	)		(168	)
Income (loss) before income taxes		39,925		11,378			(13,479	)		37,824
Depreciation and amortization		3,470		2,638			7,278			13,386
Total assets		472,980		95,946			—			568,926
Property, technology, and equipment, net		12,331		13,616			—			25,947
Goodwill		67,226		21,587			—			88,813

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NOTE 17 – BUSINESS COMBINATION

Fiscal Year 2023 Acquisition

On October 1, 2022, the Company, through its wholly-owned subsidiary, acquired the assets and operations of its of Cascade Enterprises of Minnesota, Inc. (“Cascade”) a Minneapolis, Minnesota based, privately held company that has operated as a strategic operating partner under the Company’s Airgroup brand since 2007. As part of the post-acquisition integration activities, Cascade has combined with existing Company‑owned operations in Minneapolis and will be able to leverage the Company’s Global Trade Management (“GTM”) platform to strengthen purchase order and vendor management service offerings. As consideration for the acquisition, the Company paid $3,250 in cash upon closing, and the seller is entitled to additional contingent consideration payable in subsequent periods based on future performance of the acquired operation.

The following table summarizes the fair value of the consideration transferred for the acquisition and the preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the acquisition date:

(In thousands)	Preliminary Purchase Price Allocation
Cash	$	3,250
Contingent consideration		1,987
Deposits and other assets		3
Operating lease right-of-use asset		34
Intangible assets		3,468
Operating lease liability		(34	)
Total identifiable net assets		3,471
Goodwill		1,766
	$	5,237

The fair values of the intangible assets were estimated by the Company with the assistance of valuation specialists. The fair value was 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 used 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 reflect market participant assumptions. The goodwill is recorded in the U.S. operating segment and is expected to be deductible for income tax purposes over a period of 15 years.

Intangible assets acquired and their respective useful lives are estimated as follows:

(In thousands)	Preliminary Purchase Price Allocation		Useful Life
Customer related	$	3,468	10 years
		3,468

The preliminary fair value estimates for the assets acquired and liabilities assumed are based upon preliminary calculations and valuations. The estimates and assumptions are subject to change as additional information is obtained for the estimates during the respective measurement periods (up to one year from the acquisition date). The primary areas of the preliminary estimates not yet finalized relate to identifiable intangible assets.

After management’s review of post-acquisition integration activities, it was determined that the leased facility had no future economic benefit to the Company and abandoned the lease. For the nine months ended March 31, 2023, a lease abandonment charge of $30 was recognized in the condensed consolidated statements of comprehensive income.

The results of operations from Cascade were included in the condensed consolidated financial statements from the date of acquisition. However, they were immaterial and thus no proforma presentation was necessary.

Fiscal Year 2022 Acquisition

On December 3, 2021, and effective as of November 30, 2021, the Company entered into a Stock Purchase Agreement, pursuant to which it acquired all of the issued and outstanding common shares of Navegate, Inc. (“Navegate”), a Minnesota based, privately held company from Saltspring Capital, LLC. Navegate is a technology-enabled supply chain management and third-party logistics services company that combines a robust digital platform and decades of expertise to manage international, cross-border, and domestic freight from purchase order to final delivery. Navegate’s combination of technology-enabled services, customs brokerage expertise, and a full complement of international and domestic services significantly reduces costs and leads to better compliance and risk mitigation for its customers. Navegate will operate as a wholly-owned subsidiary of Radiant Logistics, Inc. The goodwill recognized is attributable to expanded service lines and geographic footprint. The acquisition of Navegate was accounted for as purchases of a business under ASC 805, Business Combinations.

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As consideration for the acquisition, the Company paid $35,000 in cash upon closing. The transaction was financed through proceeds received from the Company's existing credit facility. A net working capital settlement of $3,852 was finalized in the third quarter of fiscal year 2022 and was paid to Saltspring Capital, LLC. The aggregate purchase price of $38,852 was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition.

The following table summarizes the fair value of the consideration transferred for the acquisition and the allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the acquisition date:

(In thousands)	Purchase Price Allocation		Adjustments		Final Purchase Price Allocation
Cash	$	35,000	$	—	$	35,000
Net working capital adjustment		—		3,852		3,852

Current assets		19,187			—		19,187
Technology and equipment		1,434			—		1,434
Intangible assets		17,834			1,188		19,022
Other long-term assets		1,621			—		1,621
Liabilities assumed		(18,836	)		—		(18,836	)
Total identifiable net assets		21,240			1,188		22,428
Goodwill		13,760			2,664		16,424
	$	35,000		$	3,852	$	38,852

The fair values of the intangible assets were estimated by the Company with the assistance of valuation specialists. The fair value was 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 used 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 reflect market participant assumptions. The goodwill is recorded in the U.S. operating segment and is not deductible for income tax purposes.

Intangible assets acquired and their respective useful lives are estimated as follows:

(In thousands)	Purchase Price Allocation		Adjustments		Final Purchase Price Allocation		Useful Life
Customer related	$	12,392	$	910	$	13,302	15 years
Developed technology		3,942		149		4,091	5 years
Trade name		1,500		129		1,629	10 years
	$	17,834	$	1,188	$	19,022

Navegate results were immaterial to the condensed consolidated financial statements and thus no proforma presentation was necessary.

NOTE 18 – SUBSEQUENT EVENTS

Repurchase of Common Stock

Pursuant to the stock repurchase program described in Note 10, we have purchased 651,917 shares of Common Stock subsequent to March 31, 2023 and through May 5, 2023 for a total cost of $4,207 inclusive of transaction costs, bringing the total Common Stock repurchased under the plan to 2,243,840 shares.

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

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

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; 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 larger strategic operating partners; our compliance with financial and other covenants under our indebtedness; the absence of any adverse laws or governmental regulations affecting the transportation industry in general, and our operations in particular; the impact of COVID-19 on our operations and financial results; continued disruptions in the global supply chain; higher inflationary pressures particularly surrounding the costs of fuel; potential adverse legal, reputational and financial effects on the Company resulting from the ransomware incident or future cyber incidents and the effectiveness of the Company’s business continuity plans in response to cyber incidents, like the ransomware incident; the commercial, reputational and regulatory risks to our business that may arise as a consequence of our need to restate our financial statements; our longer-term relationship with our senior lenders as a consequence of our need to restate our financial statements; our temporary loss of the use of a Registration Statement on Form S-3 to register securities in the future; any disruption to our business that may occur on a longer-term basis should we be unable to remediate during fiscal year 2023 certain material weaknesses in our internal controls over financial reporting, 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 Part 1 Item 1A of this report. In addition, the global economic climate and additional or unforeseen effects from the COVID-19 pandemic amplify many of these risks. 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.

Overview

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 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, which includes over 100 operating locations. Included in these operating locations are a number of independent agents, who we also refer to as our “strategic operating partners”, that operate exclusively on our behalf, and approximately 25 Company-owned offices. As a third-party logistics company, we have a vast carrier network of 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.

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Through our operating locations across North America, we offer domestic, international air and ocean freight forwarding services and freight brokerage services, including truckload services, LTL 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 materials management and distribution (“MM&D”) services, customs house brokerage (“CHB”) services and technology platforms to complement our 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 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 believes that it 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 the current platform. As the Company continues to grow and scale its business, it also remains focused on leveraging its back-office infrastructure and technology systems to drive productivity improvement across the organization.

Impact of Notable External Conditions

The global economic and trade environments remain uncertain, including the potential future impacts of a pandemic, higher inflation and oil prices, rising interest rates and the conflict in Ukraine, and could have a negative impact on our business and financial results. As demand softens and pandemic restrictions subsided, port congestions cleared, shortages of labor and equipment eased resulting in excess carrier capacity over demand. These conditions could impact our financial results.

Performance Metrics

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 adjusted transportation gross profit (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 adjusted transportation gross profit provides a useful metric, as our ability to control costs as a function of adjusted transportation gross profit directly impacts operating earnings.

Our operating results will be affected as acquisitions occur. Since all acquisitions are made using the acquisition 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.

Adjusted gross profit, a non-GAAP financial measure, is our total revenue minus our total cost of transportation and other services (excluding depreciation and amortization, which are reported separately) and adjusted gross profit percentage is adjusted gross profit as a percentage of our total revenue. We believe that these provide investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

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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 interest, 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 property, technology, and equipment; and all amortization charges (including amortization of leasehold improvements). We then further adjust EBITDA to exclude changes in fair value of contingent consideration, expenses specifically attributable to acquisitions, transition and lease termination costs, foreign currency transaction gains and losses, extraordinary items, share-based compensation expense, litigation expenses unrelated to our core operations, and other non-cash charges. While management considers EBITDA and adjusted EBITDA useful in analyzing our results, it is not intended to replace any presentation included in our condensed consolidated financial statements. The Company’s financial covenants with its lenders define an adjusted EBITDA as a key component of its covenant calculations. The Company’s ability to grow adjusted EBITDA is closely monitored by management as it’s directly tied to financial borrowing capacity and also is a frequent point of discussion with its investors as well as the Company’s earnings calls.

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.

Results of Operations

Three months ended March 31, 2023 and 2022 (unaudited)

The following table summarizes revenues, cost of transportation and other services, and adjusted gross profit by reportable operating segments for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31, 2023												Three Months Ended March 31, 2022
(In thousands)	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
													(as restated)									(as restated)
Revenues
Transportation	$	203,062		$	26,361		$	(96	)	$	229,327		$	388,350		$	41,075		$	(208	)	$	429,217
Value-added services		5,382			9,462			—			14,844			5,654			6,439			—			12,093
		208,444			35,823			(96	)		244,171			394,004			47,514			(208	)		441,310
Cost of transportation and other services
Transportation		148,190			20,973			(96	)		169,067			320,524			30,765			(208	)		351,081
Value-added services		3,605			4,482			—			8,087			757			6,011			—			6,768
		151,795			25,455			(96	)		177,154			321,281			36,776			(208	)		357,849
Adjusted gross profit (1)
Transportation		54,872			5,388			—			60,260			67,826			10,310			—			78,136
Value-added services		1,777			4,980			—			6,757			4,897			428			—			5,325
	$	56,649		$	10,368		$	—		$	67,017		$	72,723		$	10,738		$	—		$	83,461
Adjusted gross profit percentage
Transportation		27.0	%		20.4	%	N/A				26.3	%		17.5	%		25.1	%	N/A				18.2	%
Value-added services		33.0	%		52.6	%	N/A				45.5	%		86.6	%		6.6	%	N/A				44.0	%

(1)Adjusted gross profit is revenues net of cost of transportation and other services.

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Transportation revenue was $229.3 million and $429.2 million for the three months ended March 31, 2023 and 2022, respectively. The decrease of $199.9 million, or 46.6% is primarily attributable to a significant decrease in international and ocean rates, including significantly lower ocean volumes, and a lack of non-recurring charter business which occurred in the year ago period. Adjusted transportation gross profit was $60.3 million and $78.1 million for the three months ended March 31, 2023 and 2022, respectively. Net transportation margins increased from 18.2% to 26.3%, primarily due to a higher mix of domestic shipments, which have higher gross profit margin characteristics than ocean shipments and charter business.

Value-added services revenue was $14.8 million and $12.1 million, for the three months ended March 31, 2023 and 2022, respectively. The increase of $2.8 million, or 22.7%, is primarily attributed to increases in the value-added services associated with our Canada segment. Adjusted value-added services gross profit was $6.8 million for the three months ended March 31, 2023, compared to $5.3 million for the comparable prior year period. Adjusted value-added services gross profit percentage increased slightly at 45.5%.

The following table provides a reconciliation for the three months ended March 31, 2023 and 2022 of adjusted gross profit to gross profit, the most directly comparable GAAP measure:

(In thousands)	Three Months Ended March 31,
Reconciliation of adjusted gross profit to GAAP gross profit	2023			2022
				(as restated)
Revenues	$	244,171		$	441,310
Cost of transportation and other services (exclusive of depreciation and     amortization, shown separately below)		(177,154	)		(357,849	)
Depreciation and amortization		(3,205	)		(3,322	)
GAAP gross profit	$	63,812		$	80,139
Depreciation and amortization		3,205			3,322
Adjusted gross profit	$	67,017		$	83,461
GAAP gross margin (GAAP gross profit as a percentage of revenues)		26.1	%		18.2	%
Adjusted gross profit percentage (adjusted gross profit as a percentage of revenues)		27.4	%		18.9	%

The following table compares condensed consolidated statements of comprehensive income data by reportable operating segments for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31, 2023											Three Months Ended March 31, 2022
(In thousands)	United States			Canada		Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
												(as restated)						(as restated)			(as restated)
Adjusted gross profit (1)	$	56,649		$	10,368	$	—		$	67,017		$	72,723		$	10,738		$	—		$	83,461
Operating expenses:
Operating partner commissions		26,499			—		—			26,499			30,986			—			—			30,986
Personnel costs		15,181			4,438		198			19,817			15,581			4,083			189			19,853
Selling, general and administrative   expenses		6,354			2,178		2,059			10,591			7,335			1,717			1,260			10,312
Depreciation and amortization		1,069			838		2,642			4,549			1,440			947			2,297			4,684
Change in fair value of contingent   consideration		—			—		(697	)		(697	)		—			—			152			152
Total operating expenses		49,103			7,454		4,202			60,759			55,342			6,747			3,898			65,987
Income (loss) from operations		7,546			2,914		(4,202	)		6,258			17,381			3,991			(3,898	)		17,474
Other (expense) income		413			41		(822	)		(368	)		166			(29	)		988			1,125
Income (loss) before income taxes		7,959			2,955		(5,024	)		5,890			17,547			3,962			(2,910	)		18,599
Income tax expense		—			—		(1,346	)		(1,346	)		—			—			(4,276	)		(4,276	)
Net income (loss)		7,959			2,955		(6,370	)		4,544			17,547			3,962			(7,186	)		14,323
Less: Net income attributable to non-controlling interest		(361	)		—		—			(361	)		(756	)		—			—			(756	)
Net income attributable to Radiant Logistics, Inc.	$	7,598		$	2,955	$	(6,370	)	$	4,183		$	16,791		$	3,962		$	(7,186	)	$	13,567

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	Three Months Ended March 31, 2023										Three Months Ended March 31, 2022
Operating expenses as a percent of   adjusted gross profit (1):	United States			Canada			Corporate/ Eliminations	Total			United States			Canada			Corporate/ Eliminations	Total
											(as restated)							(as restated)
Operating partner commissions		46.8	%		0.0	%	N/A		39.5	%		42.6	%		0.0	%	N/A		37.1	%
Personnel costs		26.8	%		42.8	%	N/A		29.6	%		21.4	%		38.0	%	N/A		23.8	%
Selling, general and administrative    expenses		11.2	%		21.0	%	N/A		15.8	%		10.1	%		16.0	%	N/A		12.4	%
Depreciation and amortization		1.9	%		8.1	%	N/A		6.8	%		2.0	%		8.8	%	N/A		5.6	%

(1)Adjusted gross profit is revenues net of cost of transportation and other services.

Operating partner commissions decreased $4.5 million, or 14.5%, to $26.5 million for the three months ended March 31, 2023. The decrease is primarily due to a reduction in the number of strategic operating partners. As a percentage of adjusted gross profit, operating partner commissions increased 241 basis points to 39.5% from 37.1% for the three months ended March 31, 2023 and 2022, respectively.

Personnel costs remained relatively consistent, decreasing by 0.2%, between the three months ended March 31, 2023 and 2022.

Selling, general and administrative (“SG&A”) expenses increased $0.3 million, or 2.7%, to $10.6 million for the three months ended March 31, 2023. The increase is primarily due to increased professional services fees, travel expenses, and facilities costs, partially offset by lower bank fees. As a percentage of adjusted gross profit, SG&A increased 340 basis points to 15.8% from 12.4% for the three months ended March 31, 2023 and 2022, respectively.

Depreciation and amortization costs decreased $0.1 million, or 2.9%, to $4.5 million for the three months ended March 31, 2023.

Our decrease in net income is driven principally by decreased adjusted gross profit, and increased other expense, partially offset by decreased operating partner commissions and income tax expense compared to the comparable prior year period.

Our future financial results may be impacted by amortization of intangible assets resulting from acquisitions, gains or losses from changes in fair value of contingent consideration, and changes in fair value of interest rate swap contracts that are difficult to predict.

The following table provides a reconciliation for the three months ended March 31, 2023 and 2022 of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure:

	Three Months Ended March 31, 2023												Three Months Ended March 31, 2022
(In thousands)	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
													(as restated)						(as restated)			(as restated)
Net income attributable to Radiant Logistics, Inc.	$	7,598		$	2,955		$	(6,370	)	$	4,183		$	16,791		$	3,962		$	(7,186	)	$	13,567
Income tax expense		—			—			1,346			1,346			—			—			4,276			4,276
Depreciation and amortization (2)		1,183			838			2,642			4,663			1,440			947			2,297			4,684
Net interest expense		—			—			467			467			—			—			997			997
EBITDA		8,781			3,793			(1,915	)		10,659			18,231			4,909			384			23,524
Share-based compensation		355			34			154			543			472			67			—			539
Change in fair value of contingent  consideration		—			—			(697	)		(697	)		—			—			152			152
Acquisition related costs		—			—			98			98			—			—			6			6
Ransomware incident related costs, net		—			—			12			12			—			—			279			279
Litigation costs		—			—			384			384			—			—			163			163
Change in fair value of interest rate swap  contracts		—			—			355			355			—			—			(1,985	)		(1,985	)
Restatement costs		—			—			537			537			—			—			—			—
Foreign currency transaction (gain) loss		(292	)		(39	)		—			(331	)		(120	)		15			—			(105	)
Adjusted EBITDA	$	8,844		$	3,788		$	(1,072	)	$	11,560		$	18,583		$	4,991		$	(1,001	)	$	22,573
Adjusted EBITDA as a % of adjusted gross profit (1)		15.6	%		36.5	%	N/A				17.2	%		25.6	%		46.5	%	N/A				27.0	%

(1)Adjusted gross profit is revenues net of cost of transportation and other services.

(2)Depreciation and amortization for the purposes of calculating adjusted EBITDA, a non-GAAP financial measure, includes depreciation expenses recognized on certain computer software as a service.

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Nine months ended March 31, 2023 and 2022 (unaudited)

The following table summarizes revenues, cost of transportation and other services, and adjusted gross profit by reportable operating segments for the nine months ended March 31, 2023 and 2022:

	Nine Months Ended March 31, 2023												Nine Months Ended March 31, 2022
(In thousands)	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
													(as restated)									(as restated)
Revenues
Transportation	$	720,976		$	88,016		$	(351	)	$	808,641		$	944,467		$	101,838		$	(1,189	)	$	1,045,116
Value-added services		15,277			29,343			—			44,620			10,875			20,495			—			31,370
		736,253			117,359			(351	)		853,261			955,342			122,333			(1,189	)		1,076,486
Cost of transportation and other services
Transportation		546,496			68,816			(351	)		614,961			762,399			82,197			(1,189	)		843,407
Value-added services		7,361			13,414			—			20,775			4,249			9,513			—			13,762
		553,857			82,230			(351	)		635,736			766,648			91,710			(1,189	)		857,169
Adjusted gross profit (1)
Transportation		174,480			19,200			—			193,680			182,068			19,641			—			201,709
Value-added services		7,916			15,929			—			23,845			6,626			10,982			—			17,608
	$	182,396		$	35,129		$	—		$	217,525		$	188,694		$	30,623		$	—		$	219,317
Adjusted gross profit percentage
Transportation		24.2	%		21.8	%	N/A				24.0	%		19.3	%		19.3	%	N/A				19.3	%
Value-added services		51.8	%		54.3	%	N/A				53.4	%		60.9	%		53.6	%	N/A				56.1	%

(1)Adjusted gross profit is revenues net of cost of transportation and other services.

Transportation revenue was $808.6 million and $1,045.1 million for the nine months ended March 31, 2023 and 2022, respectively. The decrease of $236.5 million, or 22.6%, is primarily attributable to decrease in ocean and international rates and volumes as well as non-recurring charter business which occurred in the year ago period. Adjusted transportation gross profit was $193.7 million and $201.7 million for the nine months ended March 31, 2023 and 2022, respectively. Net transportation margins increased from 19.3% to 24.0%, primarily due to a higher mix of domestic and international shipments, which have higher gross profit margin characteristics than ocean shipments and a lack of low margin charter business in the current period.

Value-added services revenue was $44.6 million and $31.4 million, for the nine months ended March 31, 2023 and 2022, respectively. The increase of $13.3 million, or 42.2%, is primarily attributed to increases in the value-added services associated with our Canada segment. Adjusted value-added services gross profit was $23.8 million for the nine months ended March 31, 2023, compared to $17.6 million for the comparable prior year period. Adjusted value-added services gross profit percentage decreased from 56.1% to 53.4%.

The following table provides a reconciliation for the nine months ended March 31, 2023 and 2022 of adjusted gross profit to gross profit, the most directly comparable GAAP measure:

(In thousands)	Nine Months Ended March 31,
Reconciliation of adjusted gross profit to GAAP gross profit	2023			2022
				(as restated)
Revenues	$	853,261		$	1,076,486
Cost of transportation and other services (exclusive of depreciation and     amortization, shown separately below)		(635,736	)		(857,169	)
Depreciation and amortization		(8,545	)		(9,653	)
GAAP gross profit	$	208,980		$	209,664
Depreciation and amortization		8,545			9,653
Adjusted gross profit	$	217,525		$	219,317
GAAP gross margin (GAAP gross profit as a percentage of revenues)		24.5	%		19.5	%
Adjusted gross profit percentage (adjusted gross profit as a percentage of revenues)		25.5	%		20.4	%

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The following table compares condensed consolidated statements of comprehensive income data by portable operating segments for the nine months ended March 31, 2023 and 2022:

	Nine Months Ended March 31, 2023											Nine Months Ended March 31, 2022
(In thousands)	United States			Canada		Corporate/ Eliminations			Total			United States			Canada		Corporate/ Eliminations			Total
												(as restated)					(as restated)			(as restated)
Adjusted gross profit (1)	$	182,396		$	35,129	$	—		$	217,525		$	188,694		$	30,623	$	—		$	219,317
Operating expenses:
Operating partner commissions		87,116			—		—			87,116			89,716			—		—			89,716
Personnel costs		46,332			13,222		675			60,229			39,077			11,856		1,232			52,165
Selling, general and administrative   expenses		16,876			5,780		5,343			27,999			16,993			4,884		3,574			25,451
Depreciation and amortization		4,206			2,407		11,629			18,242			3,470			2,638		7,278			13,386
Transition, lease termination, and other   costs		30			—		—			30			—			—		—			—
Change in fair value of contingent   consideration		—			—		(387	)		(387	)		—			—		607			607
Total operating expenses		154,560			21,409		17,260			193,229			149,256			19,378		12,691			181,325
Income from operations		27,836			13,720		(17,260	)		24,296			39,438			11,245		(12,691	)		37,992
Other expense		564			391		(1,700	)		(745	)		486			133		(787	)		(168	)
Income before income taxes		28,400			14,111		(18,960	)		23,551			39,924			11,378		(13,478	)		37,824
Income tax expense		—			—		(5,570	)		(5,570	)		—			—		(9,191	)		(9,191	)
Net income		28,400			14,111		(24,530	)		17,981			39,924			11,378		(22,669	)		28,633
Less: net income attributable to non-    controlling interest		(529	)		—		—			(529	)		(918	)		—		—			(918	)
Net income attributable to Radiant Logistics, Inc.	$	27,871		$	14,111	$	(24,530	)	$	17,452		$	39,006		$	11,378	$	(22,669	)	$	27,715

	Nine Months Ended March 31, 2023										Nine Months Ended March 31, 2022
Operating expenses as a percent of   adjusted gross profit (1):	United States			Canada			Corporate/ Eliminations	Total			United States			Canada			Corporate/ Eliminations	Total
											(as restated)							(as restated)
Operating partner commissions		47.8	%		0.0	%	N/A		40.0	%		47.5	%		0.0	%	N/A		40.9	%
Personnel costs		25.4	%		37.6	%	N/A		27.7	%		20.7	%		38.7	%	N/A		23.8	%
Selling, general and administrative    expenses		9.3	%		16.5	%	N/A		12.9	%		9.0	%		15.9	%	N/A		11.6	%
Depreciation and amortization		2.3	%		6.9	%	N/A		8.4	%		1.8	%		8.6	%	N/A		6.1	%

(1)Adjusted gross profit is revenues net of cost of transportation and other services.

Operating partner commissions decreased $2.6 million, or 2.9%, to $87.1 million for the nine months ended March 31, 2023. The decrease is primarily due to decreased adjusted gross profit generated from operating partner stations. As a percentage of adjusted gross profit, operating partner commissions decreased 86 basis points to 40.0% from 40.9% for the nine months ended March 31, 2023 and 2022, respectively, as a result of a higher percentage of adjusted gross profit coming from operating partner locations over the prior year period.

Personnel costs increased $8.1 million, or 15.5%, to $60.2 million for the nine months ended March 31, 2023. The increase is primarily due to increased workforce and the inclusion of personnel costs from Navegate for nine months, compared to four months in the prior year period. As a percentage of adjusted gross profit, personnel costs increased 390 basis points to 27.7% from 23.8% for the nine months ended March 31, 2023 and 2022, respectively.

Selling, general and administrative (“SG&A”) expenses increased $2.5 million, or 10.0%, to $28.0 million for the nine months ended March 31, 2023. The increase is primarily due to increased IT related initiatives, professional services fees, and facilities costs, as well as the inclusion of Navegate for nine months, compared to four months in the prior year period. As a percentage of adjusted gross profit, SG&A increased 127 basis points to 12.9% from 11.6% for the nine months ended March 31, 2023 and 2022, respectively.

Depreciation and amortization costs increased $4.9 million, or 36.3%, to $18.2 million for the nine months ended March 31, 2023. The increase is primarily due to the acquisition of Navegate and the accelerated amortization of certain trade names resulting from the rebranding of certain trade names.

Our decrease in net income is driven principally by decreased adjusted gross profit, and increased operating expenses, partially offset by decreased income tax expense compared to the comparable prior year period.

Our future financial results may be impacted by amortization of intangible assets resulting from acquisitions, gains or losses from changes in fair value of contingent consideration, and changes in fair value of interest rate swap contracts that are difficult to predict.

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The following table provides a reconciliation for the nine months ended March 31, 2023 and 2022 of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure:

	Nine Months Ended March 31, 2023												Nine Months Ended March 31, 2022
(In thousands)	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
													(as restated)						(as restated)			(as restated)
Net income attributable to Radiant Logistics, Inc.	$	27,871		$	14,111		$	(24,530	)	$	17,452		$	39,006		$	11,378		$	(22,669	)	$	27,715
Income tax expense		—			—			5,570			5,570			—			—			9,191			9,191
Depreciation and amortization (2)		4,549			2,407			11,629			18,585			3,470			2,638			7,278			13,386
Net interest expense		—			—			1,931			1,931			—			—			2,349			2,349
EBITDA		32,420			16,518			(5,400	)		43,538			42,476			14,016			(3,851	)		52,641
Share-based compensation		1,126			163			543			1,832			1,028			186			97			1,311
Change in fair value of contingent   consideration		—			—			(387	)		(387	)		—			—			607			607
Acquisition related costs		—			—			147			147			—			—			502			502
Ransomware incident related costs, net		—			—			12			12			—			—			1,031			1,031
Litigation costs		—			—			751			751			—			—			484			484
Transition, lease termination, and other   costs		30			—			—			30			—			—			—			—
Change in fair value of interest rate swap   contracts		—			—			(231	)		(231	)		—			—			(1,562	)		(1,562	)
Restatement costs (3)		—			—			1,544			1,544			—			—			—			—
Foreign currency transaction gain		(417	)		(385	)		—			(802	)		(426	)		(54	)		—			(480	)
Adjusted EBITDA	$	33,159		$	16,296		$	(3,021	)	$	46,434		$	43,078		$	14,148		$	(2,692	)	$	54,534
Adjusted EBITDA as a % of adjusted   gross profit (1)		18.2	%		46.4	%	N/A				21.3	%		22.8	%		46.2	%	N/A				24.9	%

(1)Adjusted gross profit is revenues net of cost of transportation and other services.

(2)Depreciation and amortization for the purposes of calculating adjusted EBITDA, a non-GAAP financial measure, includes depreciation expenses recognized on certain computer software as a service.

(3)Restatement costs include $1.0 million for the six months ended December 31, 2022 not previously included.

Liquidity and Capital Resources

Generally, our primary sources of liquidity are cash generated from operating activities and borrowings under our Revolving Credit Facility, as described below. These sources also fund a portion of our capital expenditures and contractual contingent consideration obligations. Our level of cash and financing capabilities along with cash flows from operations have historically been sufficient to meet our operating and capital needs. As of March 31, 2023, we have $51.0 million in unrestricted cash on hand to serve as adequate working capital.

Net cash provided by operating activities was $76.1 million for the nine months ended March 31, 2023. Net cash used for operating activities was $6.9 million for the nine months ended March 31, 2022. The cash used for or provided by primarily consisted of net income adjusted for depreciation and amortization and changes in accounts receivable, contract assets, accounts payable, income taxes, accrued and other liabilities, operating lease liabilities, and payment of contingent consideration. Cash flow from operating activities for the nine months ended March 31, 2023 increased by $83.0 million, compared with the same period in fiscal year 2022, primarily due to increased depreciation and amortization, and net changes in operating assets and liabilities.

Net cash used for investing activities were $10.2 million and $44.4 million for the nine months ended March 31, 2023 and 2022, respectively. Cash paid for acquisitions were $3.3 million and $38.4 million for the nine months ended March 31, 2023 and 2022, respectively. Cash paid for purchases of property, technology, and equipment were $7.1 million and $6.2 million for the nine months ended March 31, 2023 and 2022, respectively. Proceeds from sale of property, technology, and equipment were nominal for both of the nine months ended March 31, 2023 and 2022.

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Net cash used for financing activities was $45.0 million for the nine months ended March 31, 2023. Net cash provided by financing activities was $77.2 million for the nine months ended March 31, 2022. Net repayments of the Revolving Credit Facility were $35.0 million for the nine months ended March 31, 2023, compared to net proceeds from the Revolving Credit Facility of $88.5 million for the nine months ended March 31, 2022. Payments of debt issuance costs were $0.8 million for the nine months ended March 31, 2023. Repayments of notes payable and finance lease liabilities were $3.7 million and $3.8 million for the nine months ended March 31, 2023 and 2022, respectively. Proceeds from sale of common stock were $0.2 million for the nine months ended March 31, 2022. Payments for repurchases of common stock was $5.0 million and $6.3 million for the nine months ended March 31, 2023 and 2022, respectively. Payment of contingent consideration was $1.1 million for the nine months ended March 31, 2022. Distributions to non-controlling interest were $0.2 million and $0.4 million for the nine months ended March 31, 2023 and 2022, respectively. Proceeds from exercise of stock options were $0.2 million and $0.4 million for the nine months ended March 31, 2023 and 2022, respectively. Payments of employee tax withholdings related to restricted stock units and stock options were $0.5 million and $0.4 million for the nine months ended March 31, 2023 and 2022, respectively.

Revolving Credit Facility

The Company entered into a $200 million syndicated, revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit Agreement dated as of August 5, 2022. The Revolving Credit Facility includes a $75 million accordion feature to support future acquisition opportunities. On March 31, 2023, the borrowings outstanding on the Revolving Credit Facility was $27.5 million. The Credit Facility was entered into with Bank of America, N.A. and BMO Capital Markets Corp. as joint book runners and joint lead arrangers, Bank of America, N.A. as Administrative Agent, Swingline Lender and Letter of Credit Issuer, Bank of Montreal as syndication agent, KeyBank National Association and MUFG Union Bank, N.A. as co-documentation agents and Bank of America, N. A., Bank of Montreal, KeyBank National Association, MFUG Union Bank, N.A. and Washington Federal Bank, National Association as lenders (such named lenders are collectively referred to herein as “Lenders”).

The Revolving Credit Facility has a term of five years and is collateralized by a first-priority security interest in the accounts receivable and other assets of the Company and the guarantors named below on a parity basis with the security interest held by Fiera Private Debt Fund IV LP and Fiera Private Debt Fund V LP described below. Borrowings under the Revolving Credit Facility accrue interest (at the Company’s option), at a) the Lenders’ base rate plus 0.75% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at the Lenders’ base rate plus 0.50% to 1.50%; b) Term SOFR plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFR plus 1.40% to 2.40%; and c) Term SOFR Daily Floating Rate plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFR Daily Floating Rate plus 1.40% to 2.40%. The Company’s U.S. and Canadian subsidiaries are guarantors of the Credit Facility.

For general borrowings under the Revolving Credit Facility, the Company is subject to the maximum consolidated net leverage ratio of 3.00 and minimum consolidated interest coverage ratio of 3.00. Additional minimum availability requirements and financial covenants apply in the event the Company seeks to use advances under the Revolving Credit Facility to pursue acquisitions or repurchase its common stock.

Senior Secured Loans

In connection with the Company’s acquisition of Radiant Canada (formerly, Wheels International Inc.), Radiant Canada obtained a CAD$29 million senior secured Canadian term loan from Fiera Private Debt Fund IV LP (“FPD IV” formerly, Integrated Private Debt Fund IV LP) pursuant to a CAD$29,000,000 Credit Facilities Loan Agreement. The Company and its U.S. and Canadian subsidiaries

39

are guarantors of the Radiant Canada 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 FPD IV.

In connection with the Company’s acquisition of Lomas, Radiant Canada obtained a CAD$10 million senior secured Canadian term loan from Fiera Private Debt Fund V LP (formerly, Integrated Private Debt Fund V LP) pursuant to a CAD$10,000,000 Credit Facilities Loan Agreement. The Company and its U.S. and Canadian subsidiaries are guarantors of the Radiant Canada obligations thereunder. The loan matures on June 1, 2024 and accrues interest at a fixed rate of 6.65% per annum. The loan repayment consists of monthly blended principal and interest payments.

The loans may be prepaid in whole at any time providing the Company gives at least 30 days prior written notice and pays 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 the maturity date, and (ii) the face value of the principal amount being prepaid.

For additional information regarding our indebtedness, see Note 8 to our unaudited condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

We are exposed to market risks in the ordinary course of business. These risks are primarily related to foreign exchange risk. We have currency exposure arising from both sales and purchases denominated in foreign currencies, as well as intercompany transactions. Significant changes in exchange rates between foreign currencies in which we transact business and the U.S. dollar may adversely affect our results of operations and financial condition. Historically, we have not entered into any hedging activities, and, to the extent that we continue not to do so in the future, we may be vulnerable to the effects of currency exchange rate fluctuations. A portion of our business is conducted in Canada. If foreign exchange rates were 1.0% higher or lower, our net income would have changed by approximately $0.13 million.

We are also subject to risks related to an increase in interest rates. For every $1.0 million outstanding on our Revolving Credit Facility, we will incur approximately $0.06 million of interest expense. For every 1.0% increase in interest rates, our interest expense per $1.0 million in borrowings will increase by approximately $0.01 million.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

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, 2023, was carried out by our management under the supervision and with the participation of our CEO and CFO. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were ineffective as of March 31, 2023 due to the existence of material weaknesses described below.

As of June 30, 2021, we concluded that a material weakness existed in our internal control over financial reporting related to the recording and processing of revenues transactions, including the timing of the Company’s estimated accrual of in-transit revenues and related costs. This material weakness relates to the conditions that led to the restatement of previously issued consolidated financial statements as discussed in Note 2 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

In response to this material weakness, the Company began taking corrective action during fiscal year 2022 to address the material weakness and provide reasonable assurance that future errors in revenue transactions would be prevented and/or detected in a timely manner. The Company’s corrective actions include, but are not limited to, working with strategic operating partners and company‑owned stations to understand their processes and controls, communicating the critical data elements in our revenue accrual process, further refining our accrual process to be more granular, and performing additional review procedures and analysis of unposted and subsequently‑posted shipments in an effort to improve the overall accuracy of the revenue accrual.

As of March 31, 2023, remediation is ongoing. As such, we concluded the Company does not have effective internal controls over the recording and processing of revenues. Specifically, the controls as currently designed are not sufficient to prevent or detect a material misstatement in revenues as the design of the controls lacks the level of precision necessary to ensure the completeness and accuracy of revenue.

The Company will continue evaluating the appropriate corrective actions to remediate the material weakness during fiscal year 2023 to strengthen our internal controls over the recording of revenues.

40

Changes in Internal Control over Financial Reporting

Except for the material weakness described above, there have not been any other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various claims and legal actions arising in the ordinary course of business. The Company records accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. Legal expenses are expensed as incurred. There were no potentially material legal proceedings as of March 31, 2023.

On December 8, 2021, the Company detected a ransomware incident impacting certain of the Company’s operational and information technology systems. While the Company’s systems recovery efforts are complete, and the Company’s operations are fully functional, the incident did result in a loss of revenue as well as certain incremental costs. In addition, following an extensive forensic investigation by a team of cybersecurity experts, the Company confirmed that some data extraction related to the Company’s customers and employees occurred before the Company took its systems offline. We notified law enforcement, provided notice to customers apprising them of the situation and provided any notices that may be required by applicable law related to potential Personal Identifiable Information (PII data) exposure. Although the Company acted promptly and as efficiently as possible any failure of the Company to comply with data privacy or other laws and regulations related to this event could result in claims, legal or regulatory proceedings, inquiries, or investigations.

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

In February 2022, 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, 2023. The Company did not purchase shares of common stock during the three months ended March 31, 2023. As of March 31, 2023, future repurchases of up to 3,408,077 shares were available in the share repurchase program.

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ITEM 6. EXHIBITS

			Incorporated by Reference
Exhibit Number	Description	Filed/Furnished Herewith	Form	Period Ending	Exhibit Number	Filing Date
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	X
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	X
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	X
101.INS	Inline XBRL Instance	X
101.SCH	Inline XBRL Taxonomy Extension Schema	X
101.CAL	Inline XBRL Taxonomy Extension Calculation	X
101.DEF	Inline XBRL Taxonomy Extension Definition	X
101.LAB	Inline XBRL Taxonomy Extension Label	X
101.PRE	Inline XBRL Taxonomy Extension Presentation	X
104	Cover Page Interactive Data (embedded within the Inline XBRL document)	X

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SIGNATURES

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.

	RADIANT LOGISTICS, INC.
Date: May 10, 2023	/s/ Bohn H. Crain
	Bohn H. Crain
	Chief Executive Officer
	(Principal Executive Officer)
Date: May 10, 2023	/s/ Todd E. Macomber
	Todd E. Macomber
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

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