rlgt-10q_20190930.htm

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 September 30, 2019

☐	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.)

405 114^th Avenue S.E., Third Floor

Bellevue, Washington 98004

(Address of principal executive offices) (Zip Code)

(425) 943-4599

(Registrant’s telephone number, including area code)

N/A

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

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, $.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 49,807,238 shares outstanding of the registrant’s common stock as of November 1, 2019.

RADIANT LOGISTICS, INC.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2019 and June 30, 2019	3
	Condensed Consolidated Statements of Comprehensive Income for the three months ended September 30, 2019 and 2018	4
	Condensed Consolidated Statements of Changes in Equity for the three and three months ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2019 and 2018	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 6.	Exhibits	33
Signatures		34

RADIANT LOGISTICS, INC.

Condensed Consolidated Balance Sheets

	September 30,			June 30,
		2019		2019
(In thousands, except share and per share data)	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	9,218		$	5,420
Accounts receivable, net of allowance of $1,882 and $1,887, respectively		96,642			93,123
Contract assets		22,099			17,777
Income tax receivable		1,435			506
Prepaid expenses and other current assets		8,373			8,066
Total current assets		137,767			124,892

Technology and equipment, net		20,327			20,127

Goodwill		65,389			65,389
Intangible assets, net		53,112			55,742
Operating lease right-of-use assets		14,912			—
Deposits and other assets		1,570			1,560
Total other long-term assets		134,983			122,691
Total assets	$	293,077		$	267,710

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	77,087		$	74,097
Operating partner commissions payable		11,538			12,891
Accrued expenses		6,783			6,224
Current portion of notes payable		3,707			3,687
Current portion of operating lease liability		6,605			—
Current portion of finance lease liability		681			683
Other current liabilities		794			840
Total current liabilities		107,195			98,422

Notes payable, net of current portion		35,505			30,047
Operating lease liability, net of current portion		9,137			—
Finance lease liability, net of current portion		2,998			3,161
Deferred income taxes		7,609			7,838
Deferred rent liability		—			862
Other long-term liabilities		118			100
Total long-term liabilities		55,367			42,008
Total liabilities		162,562			140,430

Commitments and contingencies (Note 13)

Stockholders' equity:
Common stock, $0.001 par value, 100,000,000 shares authorized; 49,899,036 and 49,678,262 shares issued, and 49,807,238 and 49,586,464 shares outstanding, respectively		31			31
Additional paid-in capital		100,156			100,186
Treasury stock, at cost, 91,798 shares		(253	)		(253	)
Retained earnings		30,118			26,883
Accumulated other comprehensive income		301			187
Total Radiant Logistics, Inc. stockholders’ equity		130,353			127,034
Non-controlling interest		162			246
Total equity		130,515			127,280
Total liabilities and equity	$	293,077		$	267,710

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

RADIANT LOGISTICS, INC.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

	Three Months Ended September 30,
(In thousands, except share and per share data)	2019			2018
Revenues	$	200,543		$	218,883

Operating expenses:
Cost of transportation and other services		145,010			164,015
Operating partner commissions		24,178			24,828
Personnel costs		14,847			14,545
Selling, general and administrative expenses		7,664			7,124
Depreciation and amortization		4,036			3,633
Transition and lease termination costs		(9	)		—
Change in fair value of contingent consideration		15			(95	)
Total operating expenses		195,741			214,050

Income from operations		4,802			4,833

Other income (expense):
Interest income		15			12
Interest expense		(707	)		(789	)
Foreign currency transaction gains (losses)		(23	)		34
Other		31			150
Total other expense		(684	)		(593	)

Income before income taxes		4,118			4,240

Income tax expense		(787	)		(977	)

Net income		3,331			3,263
Less: net income attributable to non-controlling interest		(96	)		(180	)

Net income attributable to Radiant Logistics, Inc.		3,235			3,083
Less: preferred stock dividends		—			(511	)

Net income attributable to common stockholders	$	3,235		$	2,572

Other comprehensive income:
Foreign currency translation gain (loss)		114			(305	)
Comprehensive income	$	3,445		$	2,958

Income per share attributable to common stockholders:
Basic	$	0.07		$	0.05
Diluted	$	0.06		$	0.05

Weighted average common shares outstanding:
Basic		49,662,540			49,437,930
Diluted		51,428,013			50,705,434

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

RADIANT LOGISTICS, INC.

Condensed Consolidated Statements of Changes in Equity

(unaudited)

	RADIANT LOGISTICS, INC. STOCKHOLDERS' EQUITY
	Preferred Stock				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		Shares		Amount		Capital			Stock			Earnings			Income (Loss)			Equity			Interest			Equity
Balance as of June 30, 2018		839,200	$	1		49,420,109	$	31	$	117,968		$	(253	)	$	15,539		$	186		$	133,472		$	142		$	133,614
Cumulative effect adjustment, upon adoption of ASC 606 on July 1, 2018		—		—		—		—		—			—			(335	)		—			(335	)		—			(335	)
Cumulative effect adjustment, upon adoption of ASU 2016-16 on July 1, 2018		—		—		—		—		—			—			(1,705	)		—			(1,705	)		—			(1,705	)
Share-based compensation		—		—		—		—		331			—			—			—			331			—			331
Issuance of common stock upon exercise of stock options		—		—		32,979		—		(63	)		—			—			—			(63	)		—			(63	)
Preferred dividends paid		—		—		—		—		—			—			(511	)		—			(511	)		—			(511	)
Distribution to non-controlling interest		—		—		—		—		—			—			—			—			—			(90	)		(90	)
Net income		—		—		—		—		—			—			3,083			—			3,083			180			3,263
Other comprehensive loss		—		—		—		—		—			—			—			(305	)		(305	)		—			(305	)
Balance as of September 30, 2018		839,200	$	1		49,453,088	$	31	$	118,236		$	(253	)	$	16,071		$	(119	)	$	133,967		$	232		$	134,199

Balance as of June 30, 2019	—	$	—	49,586,464	$	31	$	100,186		$	(253	)	$	26,883	$	187	$	127,034		$	246		$	127,280
Issuance of common stock upon vesting of restricted stock awards	—		—	138,147		—		(314	)		—			—		—		(314	)		—			(314	)
Issuance of common stock upon exercise of stock options	—		—	82,627		—		(146	)		—			—		—		(146	)		—			(146	)
Distribution to non-controlling interest	—		—	—		—		—			—			—		—		—			(180	)		(180	)
Share-based compensation	—		—	—		—		430			—			—		—		430			—			430
Net income	—		—	—		—		—			—			3,235		—		3,235			96			3,331
Other comprehensive income	—		—	—		—		—			—			—		114		114			—			114
Balance as of September 30, 2019	—	$	—	49,807,238	$	31	$	100,156		$	(253	)	$	30,118	$	301	$	130,353		$	162		$	130,515

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

RADIANT LOGISTICS, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended September 30,
(In thousands, except share and per share data)		2019			2018
OPERATING ACTIVITIES:
Net income	$	3,331		$	3,263
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Share-based compensation		430			331
Amortization of intangible assets		2,630			2,472
Depreciation and amortization of technology and equipment		1,406			1,161
Deferred income tax benefit		(229	)		(253	)
Amortization of debt issuance costs		55			59
Change in fair value of contingent consideration		15			(95	)
Transition and lease termination costs		(9	)		—
Gain on disposal of technology and equipment		(1	)		(16	)
Change in (recovery of) allowance for doubtful accounts		(5	)		332
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable		(3,689	)		4,440
Contract assets		(4,328	)		6,759
Income tax receivable		(937	)		1,055
Prepaid expenses, deposits and other assets		1,307