Nikada Introduction I've been following US freight forwarder Radiant Logistics, Inc. (NYSE:RLGT) closely, and I've written a total of 7 articles about the company on Seeking Alpha to date. The latest one came out in March 2024 and back then I said that Radiant Logistics was navigating a tough US freight market as the TTM adjusted EBITDA margin was close to 15% in Q2 FY24. On May 9, the company released its Q3 FY24 financial results and I think they were underwhelming as revenues went down by 24.4% year on y ...

Radiant Logistics, Inc. (NYSE:RLGT) Q3 2024 Results Conference Call May 9, 2024 4:30 PM ET Company Participants Bohn Crain - Founder & Chief Executive Officer Todd Macomber - Chief Financial Officer Conference Call Participants Mark Argento - Lake Street Capital Kevin Gainey - Thompson, Davis & Company, Inc. Jason Seidl - TD Cowen Jeff Kauffman - Vertical Research Mike Vermut - Newland Capital Operator Good day. This afternoon, Bohn Crain, Radiant Logistics' Founder and CEO; and Radiant Chief Financial Offi ...

[Part I: Financial Information](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, reflecting a net loss of **$0.7 million** for the quarter and a decrease in total assets to **$364.0 million** [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2024, shows total assets decreased to **$364.0 million** and total liabilities decreased to **$157.8 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | (In thousands) | March 31, 2024 (unaudited) | June 30, 2023 | | :--- | :--- | :--- | | **Total current assets** | $159,753 | $180,572 | | **Total assets** | $363,966 | $393,741 | | **Total current liabilities** | $105,530 | $132,173 | | **Total liabilities** | $157,817 | $188,645 | | **Total equity** | $206,149 | $205,096 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For the three months ended March 31, 2024, the company reported a net loss of **$0.7 million** and revenues decreased **24.4%** to **$184.6 million** Income Statement Summary (in thousands, except per share data) | (In thousands, except per share data) | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | Nine Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $184,559 | $244,171 | $596,438 | $853,261 | | **Income (loss) from operations** | $(906) | $6,258 | $4,419 | $24,296 | | **Net income (loss) attributable to Radiant** | $(703) | $4,183 | $2,904 | $17,452 | | **Diluted EPS** | $(0.02) | $0.08 | $0.06 | $0.35 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2024, net cash from operating activities sharply decreased to **$16.0 million** Cash Flow Summary (in thousands) | (In thousands) | Nine Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $15,996 | $79,636 | | **Net cash used for investing activities** | $(8,875) | $(9,342) | | **Net cash used for financing activities** | $(8,257) | $(45,040) | | **Net (decrease) increase in cash** | $(1,236) | $26,536 | | **Cash, cash equivalents, and restricted cash, end of period** | $31,826 | $51,603 | [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue disaggregation, debt facilities, and a cybersecurity incident in Canadian operations - The company is a third-party logistics provider with over 100 operating locations across North America, operating through a multi-brand network of independent agents and company-owned offices[23](index=23&type=chunk) - Revenue is disaggregated by transportation services and value-added services, with the U.S. being the largest geographic market, accounting for **$156.8 million** of the **$184.6 million** total revenue in Q3 2024[78](index=78&type=chunk) - The company has a **$200 million** revolving credit facility with no outstanding borrowings as of March 31, 2024[90](index=90&type=chunk)[92](index=92&type=chunk) - A cybersecurity incident related to Canadian operations was detected in March 2024, but is not expected to materially impact financial condition or results of operations[122](index=122&type=chunk)[123](index=123&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting a **24.8%** decrease in transportation revenue and a decline in adjusted gross profit for Q3 2024 [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Q3 2024 revenues decreased **24.4%** to **$184.6 million**, with adjusted gross profit declining **20.7%** to **$53.1 million** Q3 Financial Performance Comparison (in thousands) | (In thousands) | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | $184,559 | $244,171 | -24.4% | | **Adjusted Gross Profit** | $53,121 | $67,017 | -20.7% | | **Income (loss) from operations** | $(906) | $6,258 | N/A | | **Adjusted EBITDA** | $5,208 | $11,560 | -55.0% | Nine-Month Financial Performance Comparison (in thousands) | (In thousands) | Nine Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2023 | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | $596,438 | $853,261 | -30.1% | | **Adjusted Gross Profit** | $175,943 | $217,525 | -19.1% | | **Income from operations** | $4,419 | $24,296 | -81.8% | | **Adjusted EBITDA** | $22,083 | $46,434 | -52.4% | - The decrease in transportation revenue was primarily due to significant decreases in international and ocean rates, lower ocean volumes, and an overall decrease in charter business compared to the prior year period[152](index=152&type=chunk)[166](index=166&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company maintained **$31.2 million** in unrestricted cash and a **$200 million** available revolving credit facility - The company has **$31.2 million** in unrestricted cash on hand to serve as adequate working capital[176](index=176&type=chunk) - A **$200 million** revolving credit facility is available, with no borrowings outstanding as of March 31, 2024[181](index=181&type=chunk)[183](index=183&type=chunk) - Net cash provided by operating activities for the nine months ended March 31, 2024, decreased by **$63.6 million** to **$16.0 million** compared to the same period in fiscal year 2023[177](index=177&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from foreign exchange rates and interest rate fluctuations on its revolving credit facility - Primary market risks are foreign exchange (FX) from Canadian operations and interest rate fluctuations on variable-rate debt[189](index=189&type=chunk) - A hypothetical **1.0%** change in foreign exchange rates would have changed net income by approximately **$0.06 million** for the nine months ended March 31, 2024[189](index=189&type=chunk) - For every **1.0%** increase in interest rates, the company's interest expense per **$1.0 million** in borrowings on its Revolving Credit Facility will increase by approximately **$0.01 million**[190](index=190&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to material weaknesses in revenue recording and IT General Controls - Disclosure controls and procedures were deemed ineffective as of March 31, 2024[192](index=192&type=chunk) - A material weakness exists related to the recording and processing of revenue transactions, specifically concerning the timing and precision of in-transit revenue and cost accruals[193](index=193&type=chunk)[194](index=194&type=chunk) - Material weaknesses exist in IT General Controls (ITGCs) related to change management and user access rights for key Transportation Management and ERP systems[195](index=195&type=chunk)[198](index=198&type=chunk) [Part II: Other Information](index=56&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a legal dispute with a former customer over unpaid receivables, with the outcome currently uncertain - The company is in a legal dispute with a former customer over unpaid accounts receivable, with the customer filing a counterclaim for damages, and the outcome is currently uncertain[121](index=121&type=chunk)[201](index=201&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) No material changes in risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended June 30, 2023 - No material changes in risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended June 30, 2023[202](index=202&type=chunk) [Unregistered Sale of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new **5,000,000** share repurchase program was authorized in December 2023, with no shares repurchased during Q3 2024 - A new **5,000,000** share repurchase program was authorized in December 2023, valid through December 31, 2025[203](index=203&type=chunk) - No shares were repurchased in the quarter ended March 31, 2024, leaving the full **5,000,000** shares available for repurchase[203](index=203&type=chunk) [Other Information](index=56&type=section&id=Item%205.%20Other%20Information) No other material information was reported under this item for the current reporting period - No information was reported under this item[204](index=204&type=chunk) [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with this report include certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, along with Inline XBRL data files[205](index=205&type=chunk)

Exhibit 99.1 RADIANT LOGISTICS ANNOUNCES RESULTS FOR THE THIRD FISCAL QUARTER ENDED MARCH 31, 2024 Debt free and well positioned for further growth as market conditions improve; Continued progress in acquisition of strategic operating partners RENTON, WA May 9, 2024 – Radiant Logistics, Inc. (NYSE American: RLGT), a technology-enabled global transportation and value-added logistics services company, today reported financial results for the three and nine months ended March 31, 2024. Financial Highlights – T ...

Radiant Logistics, Inc. (NYSE:RLGT) Q2 2024 Earnings Conference Call February 8, 2024 4:30 PM ET Company Participants Bohn Crain - Founder, Chairman & Chief Executive Officer Todd Macomber - Senior Vice President & Chief Financial Officer Conference Call Participants Jason Seidl - TD Cowen Mark Argento - Lake Street Capital Kevin Gainey - Thompson Davis Jeff Kauffman - Vertical Research Partners Operator Good day, everyone. This afternoon, Bohn Crain, Radiant Logistics Founder and CEO; and Radiant's Chief F ...

Table of Contents 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 December 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) (State or other jurisdiction of ...

Radiant Logistics, Inc. (NYSE:RLGT) Q1 2024 Earnings Conference Call November 9, 2023 4:30 PM ET Company Participants Bohn Crain - Founder, Chairman and CEO Todd Macomber - Senior Vice President and CFO Conference Call Participants Elliot Alper - TD Cowen Mark Argento - Lake Street Capital Markets Jeffrey Kauffman - Vertical Research Partners Kevin Gainey - Thompson Davis Operator This afternoon, Bohn Crain, Radiant Logistics' Founder and CEO; and Radiant's Chief Financial Officer, Todd Macomber, will provi ...

Table of Contents 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, 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) (State or other jurisdiction of ...

Financial Data and Key Metrics Changes - For the three months ended June 30, 2023, the company reported net income of $3.143 million on revenues of $232.2 million, representing a decrease of approximately $23.869 million or 53.7% compared to the same period in the prior year [18][19] - Adjusted net income for the 12 months ended June 30, 2023, was $39.301 million, down from $58.246 million in the previous year, a decrease of approximately $18.945 million or 32.5% [7] - Adjusted EBITDA for the 12 months ended June 30, 2023, was $55.638 million, down from $80.918 million, a decrease of approximately $25.280 million or 31.2% [7] Business Line Data and Key Metrics Changes - The company generated over $9 million in adjusted EBITDA for the quarter, which is viewed as a positive indicator despite the difficult market conditions [3] - The company reported a record $97.9 million in cash from operations for the fiscal year ended June 30, 2023, indicating strong operational cash flow [16] Market Data and Key Metrics Changes - The overall macroeconomic environment has negatively impacted the transportation sector, with shippers managing elevated inventories and reduced imports [15] - There are signs of slight improvement in ocean bookings, which is encouraging given the previously anemic volumes [9] Company Strategy and Development Direction - The company aims to navigate slower freight markets and is positioned to take advantage of acquisition opportunities as market conditions improve [4] - Future strategies include a combination of organic growth, acquisitions, and stock buybacks to enhance shareholder value [17][46] Management's Comments on Operating Environment and Future Outlook - Management believes the company is at or near the bottom of the cycle and expects markets to normalize in the coming quarters [3] - The management remains optimistic about leveraging technology and a robust network to create value for shareholders [31][46] Other Important Information - The company has approximately $32.5 million in cash on hand and no drawn amounts on its $200 million credit facility, indicating a strong financial position [16] - The company has focused on paying down debt and repurchasing stock rather than pursuing acquisitions in the current environment [16] Q&A Session Summary Question: What indicators suggest a recovery in the market? - Management noted that they are observing slight improvements in ocean bookings, which is a positive sign for the market [9] Question: What is the expected normalized EBITDA range? - Management expects a normalized EBITDA run rate to be in the range of $50 million to $60 million as the market stabilizes [10] Question: How does the current economic situation affect acquisition strategies? - Management indicated that many potential acquirers are constrained by their credit facilities, creating opportunities for the company to pursue acquisitions due to its unlevered balance sheet [25][40] Question: What is the company's approach to agent station conversions? - Management expressed readiness to support agent stations in converting to company-owned stores when they are prepared [26] Question: Are acquisition multiples coming down? - Management confirmed that acquisition multiples are starting to decrease, making it a more favorable environment for potential acquisitions [44]

[Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially - Forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties, and assumptions that may cause actual results to differ materially[13](index=13&type=chunk) - Key risks mentioned include relationships with strategic operating partners, successful integration of acquisitions, transportation costs, dependence on management, compliance with debt covenants, impact of COVID-19, supply chain disruptions, inflationary pressures, ransomware incidents, and the need to restate financial statements[13](index=13&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the company disclaims any obligation to publicly update them[13](index=13&type=chunk) [ITEM 1. BUSINESS](index=5&type=section&id=ITEM%201%2E%20BUSINESS) Radiant Logistics operates as a non-asset-based 3PL, providing global transportation and logistics solutions through a network of over 100 locations [Our Company](index=5&type=section&id=Our%20Company) Radiant Logistics is a non-asset-based 3PL offering global transportation and value-added logistics through a multi-brand network in North America - Operates as a non-asset-based third-party logistics company, providing technology-enabled global transportation and value-added logistics solutions primarily in the United States and Canada[16](index=16&type=chunk) - Services are provided through a multi-brand network of over **100 operating locations**, including independent strategic operating partners and approximately **25 Company-owned offices**[16](index=16&type=chunk) - Offers domestic, international air and ocean freight forwarding, freight brokerage (truckload, LTL, intermodal), and value-added logistics services (materials management, customs house brokerage, global trade management)[17](index=17&type=chunk) [Competitive Strengths](index=5&type=section&id=Competitive%20Strengths) The company's competitive advantages include its non-asset-based model, benefits for partners, diverse customer base, and advanced IT - Non-asset-based business model results in minimal fixed operating costs, competitive pricing, flexible solutions, strong cash flow, and adaptability to changing economic conditions[21](index=21&type=chunk) - Provides significant advantages to strategic operating partners, including operating authority, technology, sales/marketing support, working capital, and collective purchasing power[22](index=22&type=chunk) - Maintains a large and diversified customer base across various industries, with no single customer or strategic operating partner representing more than **5% of consolidated revenue**[24](index=24&type=chunk) - Leverages advanced information technology for real-time shipment information, centralized transportation management, and a proprietary global trade management platform (Navegate acquisition) for SKU-level visibility[25](index=25&type=chunk) [Industry Overview](index=7&type=section&id=Industry%20Overview) The fragmented logistics industry sees increasing demand for efficient 3PLs due to outsourcing, globalization, and time-definite delivery needs - The logistics industry is highly fragmented, with increasing demand for third-party logistics providers due to outsourcing, globalization of trade, and the need for time-definite delivery[29](index=29&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk) - The market for third-party logistics services in the United States and Canada is estimated at approximately **$309.2 billion annually**[30](index=30&type=chunk) - Non-asset-based companies offer greater flexibility and cost-effectiveness compared to asset-based competitors by selecting from various transportation options[31](index=31&type=chunk) [Our Growth Strategy](index=7&type=section&id=Our%20Growth%20Strategy) The company pursues growth through organic expansion and strategic acquisitions, leveraging industry fragmentation for consolidation opportunities - Growth strategy combines organic growth (strengthening customer relationships, expanding strategic operating partner network) and strategic acquisitions of non-asset-based transportation and logistics providers[32](index=32&type=chunk)[37](index=37&type=chunk) - Acquisition strategy targets candidates that bring critical mass from a geographic and purchasing power standpoint, along with complementary service offerings, leveraging the highly fragmented industry for consolidation[38](index=38&type=chunk) - Successfully completed **21 acquisitions since 2006**, including Navegate (2021) and Cascade Enterprises of Minnesota, Inc. (2022)[32](index=32&type=chunk)[34](index=34&type=chunk)[40](index=40&type=chunk) [Our Operating Strategy](index=9&type=section&id=Our%20Operating%20Strategy) The operating strategy focuses on maximizing efficiency through centralizing back-office functions and building strong, relationship-oriented customer connections - Maximizes operational efficiencies by integrating general and administrative functions into a central back-office platform, reducing redundant functions and facilities at acquired companies[39](index=39&type=chunk) - Seeks to develop and maintain strong, interactive customer relationships through a relationship-oriented approach, designing solutions for customers' supply chain strategies[40](index=40&type=chunk) [Operations](index=10&type=section&id=Operations) The company operates in U.S. and Canada segments, providing non-asset-based freight forwarding and brokerage, complemented by value-added logistics services - Organized into two geographic operating segments: U.S. and Canada, providing freight forwarding and freight brokerage services[43](index=43&type=chunk) - Operates as a non-asset-based provider, arranging shipments via trucking companies, commercial airlines, air cargo carriers, railroads, and ocean carriers[42](index=42&type=chunk) - Offers value-added supply chain services including materials management and distribution (MM&D), customs house brokerage (CHB), and global trade management (GTM)[47](index=47&type=chunk) [Information Services](index=10&type=section&id=Information%20Services) The company's information services strategy focuses on continuous enhancement and migration to a common platform for efficiency and customer offerings - Key business strategy is the continued enhancement of information systems and migration of acquired companies and strategic operating partners to a common set of customer-facing and back-office applications[48](index=48&type=chunk) - The December 2021 acquisition of Navegate provides access to a proprietary global trade management platform, offering purchase order and vendor management tools with SKU-level visibility[48](index=48&type=chunk) - Centralizing operations into a single SAP-based transportation management system (rating, routing, tender, financial settlement) is expected to drive significant productivity improvement[48](index=48&type=chunk)[49](index=49&type=chunk) [Sales and Marketing](index=11&type=section&id=Sales%20and%20Marketing) Services are marketed through a North American network of company-owned and strategic operating partner locations, with no single customer exceeding 5% of revenue - Services are principally marketed through a network of Company-owned and strategic operating partner locations across North America[50](index=50&type=chunk) - Strategic operating partners rely on the Company for operating authority, technology, sales and marketing support, working capital, and network access, enabling them to focus on operational and sales support[50](index=50&type=chunk) - No single customer or strategic operating partner accounts for more than **5% of consolidated revenue**[50](index=50&type=chunk) [Competition and Business Conditions](index=11&type=section&id=Competition%20and%20Business%20Conditions) The global logistics industry is highly competitive, influenced by economic conditions, and the company differentiates through service offerings like Navegate's platform - The global transportation and logistics services industry is intensely competitive, competing against asset-based and other non-asset-based third-party logistics companies[52](index=52&type=chunk) - Competition is based primarily on rates, quality of service (reliability, on-time delivery), and scope of operations[52](index=52&type=chunk) - Business is directly impacted by domestic and international trade volumes, influenced by economic and political conditions, work stoppages, currency fluctuations, and other global factors[51](index=51&type=chunk) - Incremental service offerings, such as Navegate's global trade management platform, serve as a competitive differentiator for securing new customers and attracting strategic operating partners[52](index=52&type=chunk) [Regulation](index=11&type=section&id=Regulation) The company's freight transportation and customs brokerage operations are subject to extensive federal and state regulations, with non-compliance risking fines or permit revocation - Interstate and international transportation of freight is highly regulated, with failure to comply potentially resulting in substantial fines or revocation of operating permits[53](index=53&type=chunk) - Air freight forwarding is regulated by the Federal Aviation Administration and Transportation Security Administration as an indirect air cargo carrier[54](index=54&type=chunk) - Surface freight forwarding and motor carrier operations are regulated by the Federal Motor Carrier Safety Administration and, to a limited extent, the Surface Transportation Board[55](index=55&type=chunk)[56](index=56&type=chunk) - Ocean forwarding operations are regulated and licensed by the Federal Maritime Commission, and customs brokerage operations are subject to licensing by the Bureau of Customs and Border Protection and foreign regulations[57](index=57&type=chunk)[58](index=58&type=chunk) [Environmental, Social, and Governance Initiatives](index=12&type=section&id=Environmental%2C%20Social%2C%20and%20Governance%20Initiatives) The company is enhancing ESG efforts, aligning with TCFD and SASB, conducting a carbon inventory, and focusing on diversity, ethics, and community support - The Corporate Governance Committee of the Board of Directors has oversight of ESG-related matters, supported by an ESG Steering Committee and Task Force[60](index=60&type=chunk) - Aligning with the Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB), and has begun an initial carbon inventory for greenhouse gas (GHG) emissions[61](index=61&type=chunk) - Committed to being a socially responsible employer, fostering diversity and inclusion, operating ethically, and supporting local communities, including a partnership with the American Heart Association[62](index=62&type=chunk)[64](index=64&type=chunk) [Human Capital](index=12&type=section&id=Human%20Capital) The company fosters a positive DEI culture to attract and retain talent, employing 899 individuals as of June 30, 2023, with no collective bargaining agreements - Committed to fostering a positive and engaging culture of Diversity, Equity, and Inclusion (DEI) to attract and retain key talent[64](index=64&type=chunk) Employee Statistics (as of June 30, 2023) | Metric | Count | | :--- | :--- | | Total Employees | 899 | | Full-time Employees | 872 | | Employees covered by collective bargaining agreement | 0 | [Available Information](index=14&type=section&id=Available%20Information) The company provides SEC filings (10-K, 10-Q, 8-K, proxy statements) free of charge on its website and the SEC website - Maintains a website (www.radiantdelivers.com) where it posts SEC filings (Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and proxy statements) free of charge[67](index=67&type=chunk) - These reports are also available free of charge on the SEC website at www.sec.gov[67](index=67&type=chunk) [ITEM 1A. RISK FACTORS](index=15&type=section&id=ITEM%201A%2E%20RISK%20FACTORS) This section outlines various risks that could materially and adversely affect the company's business, financial condition, or results of operations [RISKS PARTICULAR TO OUR BUSINESS](index=15&type=section&id=RISKS%20PARTICULAR%20TO%20OUR%20BUSINESS) Key business risks include dependence on partners, IT system failures, cybersecurity attacks, reliance on third-party carriers, economic downturns, and international business exposure [Risks Related to our Business](index=15&type=section&id=Risks%20Related%20to%20our%20Business) - Dependence on maintaining and expanding the strategic operating partner network; risk of terminations or non-renewal of agreements[71](index=71&type=chunk) - Risk of loss if strategic operating partners fail to maintain adequate reserves against unpaid customer invoices or are unable to replenish deficit accounts[72](index=72&type=chunk) - Failure to comply with "indirect air carrier" regulations (e.g., TSA) could result in penalties, fines, or limits on shipping ability[73](index=73&type=chunk) - Heavy reliance on IT systems, with risks including failure to develop/maintain systems, cybersecurity attacks (e.g., **2021 ransomware incident** causing revenue loss, costs, data extraction), and challenges integrating acquired systems[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - Reliance on third-party carriers exposes the company to capacity shortages, policy changes, cost increases (fuel, labor), and service interruptions[79](index=79&type=chunk) - Vulnerability to economic recessions, reduced freight volumes, customer payment difficulties, seasonal trends, and intense competition leading to potential revenue/profit margin reductions[82](index=82&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) - Exposure to claims for loss/damage to goods, accidents involving contracted carriers, and other lawsuits; insurance coverage may be inadequate or costly[91](index=91&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Increasing international business (**41% of adjusted gross profit in FY23**) exposes the company to currency exchange risk, foreign regulatory requirements, and geopolitical instability[112](index=112&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - Identified material weaknesses in internal control over financial reporting related to revenue transaction recording/processing and IT general controls (change management, user access rights)[117](index=117&type=chunk)[118](index=118&type=chunk) [Risks Related to our Acquisition Strategy](index=27&type=section&id=Risks%20Related%20to%20our%20Acquisition%20Strategy) - Scarcity of desirable acquisition targets and intense competition from larger, better-financed entities, potentially leading to unfavorable terms or inability to complete transactions[121](index=121&type=chunk) - Limited financial resources for acquisitions, requiring additional financing (debt/equity) which may be constrained by credit facility terms or market conditions[122](index=122&type=chunk) - Delayed SEC filings make the company currently ineligible to use a registration statement on Form S-3, which could adversely affect its ability to raise future capital or complete acquisitions[123](index=123&type=chunk) - Credit facilities place certain limits on acquisitions, requiring lender consent or satisfaction of specific conditions (e.g., financial covenants, minimum availability)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - Acquisitions result in non-cash charges relating to the amortization of intangible assets, which adversely affects GAAP net income and may cause stock price to decline, despite management's focus on adjusted EBITDA[127](index=127&type=chunk) - Difficulties in integrating operations, personnel, and assets of acquired businesses may disrupt business, dilute stockholder value, and adversely affect operating results[130](index=130&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk) - Risk of undiscovered or underestimated liabilities in acquisitions, for which seller indemnification may be insufficient[136](index=136&type=chunk) [Risks Related to our Common Stock](index=30&type=section&id=Risks%20Related%20to%20our%20Common%20Stock) - The market price of common stock may fluctuate significantly due to variations in earnings, financial performance, public reaction to announcements, analyst recommendations, economic conditions, and industry trends[139](index=139&type=chunk)[140](index=140&type=chunk)[143](index=143&type=chunk) - Provisions in the certificate of incorporation, bylaws, and Delaware law (e.g., director removal, bylaw amendments, preferred stock) could deter a contested takeover[145](index=145&type=chunk) - The Founder, Chairman, and CEO controls approximately **20% of outstanding common stock**, exerting substantial influence over corporate matters and potentially delaying or preventing changes of control[146](index=146&type=chunk) - Limited trading in common stock on the NYSE American may make it difficult for stockholders to resell shares at desired prices or volumes[149](index=149&type=chunk) - The influx of additional shares from acquisitions, earn-outs, or employee compensation may create downward pressure on the trading price and dilute existing stockholders' interests[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - The company does not anticipate paying cash dividends on its common stock in the foreseeable future, limiting income for investors[154](index=154&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=36&type=section&id=ITEM%201B%2E%20UNRESOLVED%20STAFF%20COMMENTS) This item states that there are no unresolved staff comments applicable to the company [ITEM 2. PROPERTIES](index=36&type=section&id=ITEM%202%2E%20PROPERTIES) The company's principal executive offices are in Renton, Washington, with over 100 leased operating locations globally, all deemed adequate and insured - Principal executive offices are located in Renton, Washington[158](index=158&type=chunk) - Network comprises over **100 operating locations**, including Company-owned offices and warehouses operating from leased locations in the United States, Canada, and other international locations (Shanghai, China; Cebu City, Philippines)[158](index=158&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Current offices and warehouses are adequately covered by insurance and sufficient to support operations for the foreseeable future[158](index=158&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=36&type=section&id=ITEM%203%2E%20LEGAL%20PROCEEDINGS) The company is involved in ordinary course legal actions, with no material proceedings as of June 30, 2023, but faces post-year-end counterclaims and ongoing ransomware-related risks - Involved in various claims and legal actions arising in the ordinary course of business, with accruals for estimated losses when probable and estimable[366](index=366&type=chunk) - No potentially material legal proceedings as of **June 30, 2023**[366](index=366&type=chunk) - Subsequent to year-end, the Company initiated claims against a former customer for unpaid accounts receivable, leading to counterclaims for alleged breach of contract, with a possible material impact on results of operations and cash flows[367](index=367&type=chunk) - A ransomware incident in **December 2021** resulted in revenue loss, incremental costs, and data extraction related to customers and employees, with ongoing potential for claims, legal or regulatory proceedings related to data privacy[368](index=368&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=36&type=section&id=ITEM%204%2E%20MINE%20SAFETY%20DISCLOSURES) This item states that mine safety disclosures are not applicable to the company [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=37&type=section&id=ITEM%205%2E%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on the NYSE American under "RLGT," with 73 stockholders of record as of September 5, 2023, and a share repurchase program in place [Market Information](index=37&type=section&id=Market%20Information) The company's common stock trades on the NYSE American under the symbol "RLGT" - Common stock trades on the NYSE American under the symbol "**RLGT**"[164](index=164&type=chunk) [Holders](index=37&type=section&id=Holders) As of September 5, 2023, there were 73 stockholders of record for the company's common stock - As of **September 5, 2023**, the number of stockholders of record of common stock was **73**[164](index=164&type=chunk) [Dividend Policy](index=37&type=section&id=Dividend%20Policy) The company has never paid cash dividends and does not anticipate doing so, with payments further restricted by credit facilities - The company has never declared or paid cash dividends on its common stock and does not anticipate doing so in the foreseeable future[165](index=165&type=chunk) - Ability to pay dividends is further limited by terms of existing credit facilities[165](index=165&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) [Issuer Purchases of Equity Securities](index=37&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased 944,385 shares of common stock in Q4 FY23 at an average price of $6.42 under an authorized program Issuer Purchases of Equity Securities (Q4 FY2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Number of Shares that May Yet Be Purchased under the Plans or Programs | | :--- | :--- | :--- | :--- | :--- | | April 1 − 30, 2023 | 544,910 | $6.45 | 544,910 | 2,863,167 | | May 1 − 31, 2023 | 269,819 | $6.34 | 269,819 | 2,593,348 | | June 1 − 30, 2023 | 129,656 | $6.44 | 129,656 | 2,463,692 | | **Total** | **944,385** | **$6.42** | **944,385** | **2,463,692** | - The board of directors authorized the repurchase of up to **5,000,000 shares of common stock** through **December 31, 2023**[166](index=166&type=chunk) [Comparative Stock Performance](index=38&type=section&id=Comparative%20Stock%20Performance) As of June 30, 2023, Radiant Logistics, Inc. achieved a cumulative total return of 172%, outperforming the Dow Jones Transportation Average Index and Russell 2000 Index over five fiscal years Cumulative Total Stockholder Return (as of June 30) | Index | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Radiant Logistics, Inc. | $100 | $157 | $101 | $177 | $190 | $172 | | Dow Jones Transportation Average Index | $100 | $101 | $89 | $144 | $127 | $150 | | Russell 2000 Index | $100 | $95 | $88 | $141 | $104 | $115 | [ITEM 6. [RESERVED]](index=38&type=section&id=ITEM%206%2E%20%5BRESERVED%5D) This item is reserved and contains no information [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=39&type=section&id=ITEM%207%2E%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial condition and operating results, covering performance metrics, accounting estimates, liquidity, and strategic initiatives [Overview](index=39&type=section&id=Overview) Radiant Logistics is a non-asset-based 3PL offering global transportation and logistics solutions, pursuing growth through organic expansion and strategic acquisitions - Operates as a third-party logistics company, providing technology-enabled global transportation and value-added logistics solutions primarily in the United States and Canada[173](index=173&type=chunk) - Offers domestic, international air and ocean freight forwarding, freight brokerage, and value-added logistics services (MM&D, CHB, GTM)[174](index=174&type=chunk) - Growth strategy includes organic growth (strengthening customer relationships, expanding strategic operating partner network) and acquisitions (complementary geographical and logistics service offerings)[175](index=175&type=chunk)[176](index=176&type=chunk) [Impact of Notable External Conditions](index=39&type=section&id=Impact%20of%20Notable%20External%20Conditions) Ongoing global economic uncertainties, including inflation, rising interest rates, and geopolitical conflicts, have led to softening demand and excess carrier capacity, potentially impacting financial results - Global economic and trade environments remain uncertain, with potential impacts from pandemics, higher inflation and oil prices, rising interest rates, and the conflict in Ukraine[177](index=177&type=chunk) - Softening demand, cleared port congestion, eased labor and equipment shortages, and excess carrier capacity over demand could impact financial results[177](index=177&type=chunk) [Performance Metrics](index=39&type=section&id=Performance%20Metrics) The company's income primarily derives from freight forwarding and brokerage, with adjusted gross profit, EBITDA, and adjusted EBITDA as key non-GAAP performance indicators, subject to seasonal fluctuations - Principal source of income is derived from freight forwarding and freight brokerage services[178](index=178&type=chunk) - Adjusted gross profit (revenue minus cost of transportation and other services, excluding depreciation and amortization) is the primary indicator of the ability to source, add value, and resell services[179](index=179&type=chunk)[181](index=181&type=chunk) - EBITDA and adjusted EBITDA are used as non-GAAP measures to analyze results, eliminating the effect of non-cash costs like depreciation and amortization, and other specific adjustments[182](index=182&type=chunk)[183](index=183&type=chunk) - Operating results are subject to seasonal trends, with first and fourth fiscal quarters traditionally weaker than second and third fiscal quarters[184](index=184&type=chunk) [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) The company's financial statements rely on critical accounting estimates for revenue recognition, fair value of acquired assets, goodwill, and contingent consideration, which are inherently uncertain - Critical accounting estimates include revenue recognition, fair value of acquired assets and liabilities, assessment of recoverability of long-lived assets, goodwill and intangible assets, and fair value of contingent consideration[185](index=185&type=chunk) - Revenue recognition requires management judgments on transit period and percentage of completion, which can be impacted by macroeconomic conditions[186](index=186&type=chunk) - Goodwill is reviewed for impairment annually (April 1st) or more frequently if circumstances indicate the carrying amount may not be recoverable[187](index=187&type=chunk) - Contingent consideration is valued using projected future financial results based on recent and historical data, discounted using Level 3 inputs, with changes in fair value recognized quarterly[190](index=190&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) For fiscal year 2023, the company experienced significant declines in transportation revenue, adjusted gross profit, income from operations, and net income due to lower international rates and volumes [Fiscal year ended June 30, 2023, compared to fiscal year ended June 30, 2022](index=41&type=section&id=Fiscal%20year%20ended%20June%2030%2C%202023%2C%20compared%20to%20fiscal%20year%20ended%20June%2030%2C%202022) Revenue and Adjusted Gross Profit by Segment (FY2023 vs FY2022, in thousands) | Metric | Year Ended June 30, 2023 | Year Ended June 30, 2022 | Change (Amount) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Transportation Revenue | $1,032,879 | $1,416,050 | $(383,171) | -27.1% | | Value-added Services Revenue | $52,607 | $43,369 | $9,238 | +21.3% | | **Total Revenues** | **$1,085,486** | **$1,459,419** | **$(373,933)** | **-25.6%** | | Adjusted Transportation Gross Profit | $254,215 | $282,781 | $(28,566) | -10.1% | | Adjusted Transportation Gross Profit Percentage | 24.6% | 20.0% | +4.6 pp | +23.0% | | Adjusted Value-added Services Gross Profit | $29,625 | $23,504 | $6,121 | +26.0% | | Adjusted Value-added Services Gross Profit Percentage | 56.3% | 54.2% | +2.1 pp | +3.9% | | **Total Adjusted Gross Profit** | **$283,840** | **$306,285** | **$(22,445)** | **-7.3%** | Consolidated Operating Expenses (FY2023 vs FY2022, in thousands) | Expense Category | Year Ended June 30, 2023 | Year Ended June 30, 2022 | Change (Amount) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Partner Commissions | $115,605 | $121,937 | $(6,332) | -5.2% | | Personnel Costs | $79,512 | $72,242 | $7,270 | +10.1% | | Selling, General and Administrative Expenses | $38,518 | $34,000 | $4,518 | +13.3% | | Depreciation and Amortization | $22,700 | $18,716 | $3,984 | +21.3% | | Change in Fair Value of Contingent Consideration | $(646) (gain) | $767 (loss) | $(1,413) | N/A | Net Income and Adjusted EBITDA (FY2023 vs FY2022, in thousands) | Metric | Year Ended June 30, 2023 | Year Ended June 30, 2022 | Change (Amount) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to Radiant Logistics, Inc. | $20,595 | $44,464 | $(23,869) | -53.7% | | Adjusted EBITDA | $55,638 | $80,918 | $(25,280) | -31.2% | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily supported by operating cash flow and its $200 million Revolving Credit Facility, with $32.5 million in cash as of June 30, 2023 - Primary sources of liquidity are cash generated from operating activities and borrowings under the **$200 million Revolving Credit Facility**, which includes a **$75 million accordion feature** for future acquisition opportunities[206](index=206&type=chunk)[215](index=215&type=chunk) - As of **June 30, 2023**, the company had **$32.5 million in unrestricted cash** on hand[206](index=206&type=chunk) [Fiscal year ended June 30, 2023 compared to fiscal year ended June 30, 2022](index=44&type=section&id=Fiscal%20year%20ended%20June%2030%2C%202023%20compared%20to%20fiscal%20year%20ended%20June%2030%2C%202022) Net Cash Flow Activities (FY2023 vs FY2022, in thousands) | Cash Flow Category | Year Ended June 30, 2023 | Year Ended June 30, 2022 | Change (Amount) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $97,895 | $24,877 | $73,018 | | Net cash used for investing activities | $(10,712) | $(45,678) | $34,966 | | Net cash provided by (used for) financing activities | $(80,207) | $28,934 | $(109,141) | - Increase in operating cash flow primarily due to changes in accounts receivable, contract assets, accounts payable, income taxes, and accrued expenses[207](index=207&type=chunk) - Decrease in cash used for investing activities primarily due to lower cash paid for acquisitions (**$3.3 million in FY23 vs. $38.4 million in FY22**)[208](index=208&type=chunk) - Shift to cash used for financing activities primarily due to net repayments of the Revolving Credit Facility (**$62.5 million in FY23 vs. $47.5 million net proceeds in FY22**) and common stock repurchases[209](index=209&type=chunk) [Working Capital](index=45&type=section&id=Working%20Capital) The company believes its current working capital, anticipated operating cash flow, and Revolving Credit Facility access are sufficient for the next twelve months - Current working capital, anticipated cash flow from operations, and access to financing through the Revolving Credit Facility are adequate for funding existing operations for the next twelve months[210](index=210&type=chunk) [Acquisitions](index=45&type=section&id=Acquisitions) In FY2023, the company acquired Cascade Enterprises for $3.3 million, and in FY2022, Navegate for $38.9 million, enhancing its GTM platform and supply chain management capabilities - On **October 1, 2022 (FY2023)**, acquired Cascade Enterprises of Minnesota, Inc. for **$3.3 million in cash**, integrating it to leverage the Global Trade Management (GTM) platform[213](index=213&type=chunk) - On **December 3, 2021 (FY2022)**, acquired Navegate, Inc. for **$38.9 million in cash**, enhancing technology-enabled supply chain management and third-party logistics services[212](index=212&type=chunk) [Technology](index=45&type=section&id=Technology) The company continuously enhances its technology platform, capitalizing $0.6 million in FY23 and planning $2.0-$3.0 million for FY24 to improve customer, vendor, and user-facing tools - A primary component of the business strategy is the continued development and enhancement of its technology platform to align with current and future business requirements[214](index=214&type=chunk) - Capitalized approximately **$0.6 million on technology enhancements** and software systems during fiscal year ended June 30, 2023[214](index=214&type=chunk) - Expects to spend between **$2.0 million and $3.0 million** during fiscal year 2024 to enhance its technology platform, including customer-facing, vendor-facing, and user-facing tools[214](index=214&type=chunk) [Revolving Credit Facility](index=45&type=section&id=Revolving%20Credit%20Facility) The company has a $200 million Revolving Credit Facility with a $75 million accordion feature, subject to financial covenants, and no outstanding borrowings as of June 30, 2023 - Entered into a **$200 million syndicated, revolving credit facility** on **August 5, 2022**, with a **$75 million accordion feature** to support future acquisition opportunities[215](index=215&type=chunk) - The facility has a five-year term, is collateralized by a first-priority security interest in accounts receivable and other assets, and accrues interest based on Lenders' base rate or Term SOFR plus a margin[216](index=216&type=chunk) - Subject to financial covenants including a maximum consolidated net leverage ratio of **3.00** and a minimum consolidated interest coverage ratio of **3.00**[217](index=217&type=chunk) - As of **June 30, 2023**, there were no borrowings outstanding on the Revolving Credit Facility[217](index=217&type=chunk) [Senior Secured Loan](index=46&type=section&id=Senior%20Secured%20Loan) The company holds two senior secured Canadian term loans from Fiera Private Debt Funds, totaling CAD$39 million, maturing in 2024 with a 6.65% interest rate - **CAD$29 million senior secured Canadian term loan** from FPD IV, maturing **April 1, 2024**, with a **6.65% per annum interest rate**; as of June 30, 2023, **$2,858 thousand was outstanding**[218](index=218&type=chunk)[338](index=338&type=chunk) - **CAD$10 million senior secured Canadian term loan** from FPD V, maturing **June 1, 2024**, with a **6.65% per annum fixed interest rate**; as of June 30, 2023, **$1,346 thousand was outstanding**[219](index=219&type=chunk)[339](index=339&type=chunk) - Both loans are guaranteed by the Company's U.S. and Canadian subsidiaries and are subject to the same covenants as the Revolving Credit Facility[218](index=218&type=chunk)[219](index=219&type=chunk)[341](index=341&type=chunk) [Off Balance Sheet Arrangements](index=46&type=section&id=Off%20Balance%20Sheet%20Arrangements) As of June 30, 2023, the company had no material off-balance sheet arrangements, thus avoiding related financing, liquidity, market, or credit risks - As of **June 30, 2023**, the company did not have any relationships with unconsolidated entities or financial partners for off-balance sheet arrangements[221](index=221&type=chunk) - Not materially exposed to any financing, liquidity, market, or credit risk that could arise from such relationships[221](index=221&type=chunk) [Recent Accounting Guidance](index=46&type=section&id=Recent%20Accounting%20Guidance) The company will adopt ASU 2016-13 (CECL model) for credit losses and prospectively apply ASU 2021-08 for business combinations starting July 1, 2023 - Will adopt ASU 2016-13 (CECL model) on **July 1, 2023**, using the modified retrospective approach, primarily impacting accounts receivable; no significant cumulative-effect adjustment to retained earnings is expected[319](index=319&type=chunk)[320](index=320&type=chunk) - Plans to apply ASU 2021-08 (Business Combinations) on a prospective basis to business combinations occurring on or after **July 1, 2023**, changing how contract assets and liabilities are recognized and measured[321](index=321&type=chunk) [ESG and Climate Change Effects](index=46&type=section&id=ESG%20and%20Climate%20Change%20Effects) Radiant Logistics integrates ESG into governance, anticipates no material financial impact from climate risks due to its asset-light model, and identifies revenue opportunities in eco-friendly logistics - Integrating ESG into corporate governance and aligning with the TCFD framework, with the Board of Directors overseeing climate-related risks and opportunities[223](index=223&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) - Due to its asset-light business model, the company does not anticipate material financial impact from climate change risks, as it is not exposed to rising emissions costs or decarbonization investment risks of carriers[225](index=225&type=chunk) - Identified potential climate-related revenue opportunities, including helping customers manage carbon taxes/emissions reporting and meeting demand for decarbonized logistics services[226](index=226&type=chunk)[230](index=230&type=chunk) - Began an initial carbon inventory to inform greenhouse gas (GHG) initiatives for Scope 1 & 2 emissions and intends to establish targets for reduction[230](index=230&type=chunk)[232](index=232&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=50&type=section&id=ITEM%207A%2E%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risks from foreign exchange rate fluctuations, particularly in Canadian operations, and interest rate risk on its variable-rate Revolving Credit Facility - Exposed to foreign exchange risk, particularly from international operations (**41% of adjusted gross profit in FY23**), and has not historically engaged in hedging activities[233](index=233&type=chunk) - A **1.0% change in foreign exchange rates** would change net income by approximately **$0.14 million**[233](index=233&type=chunk) - Subject to interest rate risk on its Revolving Credit Facility; a **1.0% increase in interest rates** would increase interest expense by approximately **$0.01 million per $1.0 million in borrowings**[234](index=234&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=51&type=section&id=ITEM%208%2E%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the audited consolidated financial statements for FY2023 and FY2022, including the auditor's report, balance sheets, income statements, cash flows, and detailed notes [Report of Independent Registered Public Accounting Firm](index=52&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Moss Adams LLP issued an unqualified opinion on the financial statements but an adverse opinion on internal controls due to material weaknesses in revenue and IT general controls - Issued an unqualified opinion on the consolidated financial statements for the years ended **June 30, 2023 and 2022**[241](index=241&type=chunk) - Issued an adverse opinion on the effectiveness of the Company's internal control over financial reporting as of **June 30, 2023**, due to material weaknesses[241](index=241&type=chunk) - Identified material weaknesses in internal controls over the recording and processing of revenues (lacking precision) and over the design and operation of information technology general controls (change management and user access rights)[245](index=245&type=chunk)[246](index=246&type=chunk) - The material weaknesses did not affect the opinion on the consolidated financial statements, but required increased audit effort[247](index=247&type=chunk)[255](index=255&type=chunk) [Consolidated Balance Sheets](index=55&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased by 20.8% to $393.74 million in 2023, driven by lower accounts receivable, while total liabilities decreased by 37.7% to $188.65 million, and total equity increased by 5.4% to $205.10 million Consolidated Balance Sheet Summary (in thousands) | Metric | June 30, 2023 | June 30, 2022 | Change (Amount) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $393,741 | $497,351 | $(103,610) | -20.8% | | Total Liabilities | $188,645 | $302,794 | $(114,149) | -37.7% | | Total Equity | $205,096 | $194,557 | $10,539 | +5.4% | - Significant decreases in Accounts receivable, net (from **$225.26 million to $126.73 million**) and Contract assets (from **$22.39 million to $6.18 million**)[260](index=260&type=chunk) - Major decreases in Accounts payable (from **$137.85 million to $84.56 million**) and Notes payable, net of current portion (from **$66.72 million to $0**)[260](index=260&type=chunk) [Consolidated Statements of Comprehensive Income](index=57&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) For fiscal year 2023, revenues decreased by 25.6% to $1,085.5 million, and net income attributable to Radiant Logistics, Inc. fell by 53.7% to $20.6 million, primarily due to increased operating expenses Consolidated Statements of Comprehensive Income (in thousands, except per share data) | Metric | Year Ended June 30, 2023 | Year Ended June 30, 2022 | Change (Amount) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,085,486 | $1,459,419 | $(373,933) | -25.6% | | Total operating expenses | $1,057,365 | $1,400,796 | $(343,431) | -24.5% | | Income from operations | $28,121 | $58,623 | $(30,502) | -52.0% | | Income before income taxes | $27,546 | $58,183 | $(30,637) | -52.7% | | Net income attributable to Radiant Logistics, Inc. | $20,595 | $44,464 | $(23,869) | -53.7% | | Basic EPS | $0.43 | $0.90 | $(0.47) | -52.2% | | Diluted EPS | $0.42 | $0.88 | $(0.46) | -52.3% | - Foreign currency translation loss improved from **$(1,937) thousand in FY22 to $(1,409) thousand in FY23**[263](index=263&type=chunk) [Consolidated Statements of Changes in Equity](index=59&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased from $194.56 million in 2022 to $205.10 million in 2023, driven by net income and share-based compensation, partially offset by stock repurchases Consolidated Statements of Changes in Equity (in thousands, except share data) | Metric | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Total Radiant Logistics, Inc. Stockholders' Equity | $204,870 | $194,377 | | Non-controlling interest | $226 | $180 | | **Total Equity** | **$205,096** | **$194,557** | | Net income attributable to Radiant Logistics, Inc. (FY23) | $20,595 | N/A | | Share-based compensation (FY23) | $2,503 | N/A | | Repurchase of common stock (FY23) | $(11,063) | N/A | | Other comprehensive loss (FY23) | $(1,409) | N/A | - Common stock outstanding decreased from **48,740,935 shares as of June 30, 2022, to 47,294,529 shares as of June 30, 2023**[266](index=266&type=chunk) [Consolidated Statements of Cash Flows](index=60&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to $97.90 million in FY23, while investing activities used less cash, and financing activities shifted to a net use of $80.21 million due to credit facility repayments Consolidated Statements of Cash Flows (in thousands) | Cash Flow Category | Year Ended June 30, 2023 | Year Ended June 30, 2022 | Change (Amount) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $97,895 | $24,877 | $73,018 | | Net cash used for investing activities | $(10,712) | $(45,678) | $34,966 | | Net cash provided by (used for) financing activities | $(80,207) | $28,934 | $(109,141) | | Net increase in cash, cash equivalents, and restricted cash | $7,995 | $10,723 | $(2,728) | - Operating activities saw a significant increase in cash provided, driven by changes in accounts receivable and contract assets[269](index=269&type=chunk) - Investing activities used less cash primarily due to lower cash paid for acquisitions[269](index=269&type=chunk) - Financing activities shifted from providing cash to using cash, mainly due to net repayments of the revolving credit facility[269](index=269&type=chunk) [Notes to the Consolidated Financial Statements](index=62&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed disclosures for the financial statements, covering organization, accounting policies, revenue, EPS, leases, assets, debt, equity, and subsequent events [NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS](index=62&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) Radiant Logistics, Inc. operates as a third-party logistics company, offering global transportation and value-added solutions through a multi-brand network in North America - Radiant Logistics, Inc. operates as a third-party logistics company, providing technology-enabled global transportation and value-added logistics solutions primarily in the United States and Canada[271](index=271&type=chunk) - Offers domestic and international air and ocean freight forwarding, freight brokerage, and value-added logistics services (MM&D, CHB) through a multi-brand network of over **100 operating locations**[271](index=271&type=chunk)[272](index=272&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=62&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company consolidates subsidiaries and a VIE, recognizes revenue over time or at a point in time, performs annual goodwill impairment tests, and accounts for acquisitions using the acquisition method - Consolidates wholly-owned subsidiaries and a variable interest entity (RLP), **60% owned by the CEO's entity**, due to primary beneficiary status[273](index=273&type=chunk)[348](index=348&type=chunk) - Revenue from transportation services is recognized over time as control of services transfers, while MM&D services are recognized over time as consumed, and CHB services are recognized at a point in time upon completion[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) - Performs an annual impairment test for goodwill as of **April 1st** and reviews long-lived assets for impairment when circumstances indicate carrying amounts may not be recoverable[187](index=187&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - Accounts for business acquisitions using the acquisition method, recording acquired assets and liabilities at fair value, and contingent consideration at fair value with subsequent changes recognized in comprehensive income[287](index=287&type=chunk)[289](index=289&type=chunk) - Will adopt ASU 2016-13 (CECL model) on **July 1, 2023**, for credit losses, and prospectively apply ASU 2021-08 for business combinations on or after **July 1, 2023**[319](index=319&type=chunk)[321](index=321&type=chunk) [NOTE 3 – REVENUE](index=68&type=section&id=NOTE%203%20%E2%80%93%20REVENUE) Total revenues decreased by 25.6% to $1,085.5 million in FY2023, with transportation services as the major component, and no single customer representing 10% or more of consolidated revenues Gross Revenues Disaggregated by Service Lines and Timing of Recognition (in thousands) | Category | Year Ended June 30, 2023 | Year Ended June 30, 2022 | | :--- | :--- | :--- | | **Total Revenues** | **$1,085,486** | **$1,459,419** | | *Major Service Lines:* | | | | Transportation services | $1,032,879 | $1,416,050 | | Value-added services | $52,607 | $43,369 | | *Timing of Revenue Recognition:* | | | | Services transferred over time | $1,080,450 | $1,451,838 | | Services transferred at a point in time | $5,036 | $7,581 | - No single customer represented **10% or more of consolidated revenues** for the fiscal years ended June 30, 2023 and 2022[322](index=322&type=chunk) [NOTE 4 – EARNINGS PER SHARE](index=69&type=section&id=NOTE%204%20%E2%80%93%20EARNINGS%20PER%20SHARE) Net income attributable to Radiant Logistics, Inc. decreased to $20.6 million in FY2023, resulting in basic EPS of $0.43 and diluted EPS of $0.42 Earnings Per Share Computation (in thousands, except share data) | Metric | Year Ended June 30, 2023 | Year Ended June 30, 2022 | | :--- | :--- | :--- | | Net income attributable to Radiant Logistics, Inc. | $20,595 | $44,464 | | Weighted average common shares outstanding, basic | 48,188,663 | 49,570,594 | | Dilutive effect of share-based awards | 1,362,725 | 1,165,988 | | Weighted average common shares outstanding, diluted | 49,551,388 | 50,736,582 | | Basic Income per Share | $0.43 | $0.90 | | Diluted Income per Share | $0.42 | $0.88 | [NOTE 5 – LEASES](index=69&type=section&id=NOTE%205%20%E2%80%93%20LEASES) The company's lease expenses for FY2023 included $13.8 million for operating leases and $0.8 million for finance leases, with operating lease right-of-use assets totaling $56.8 million Lease Expense (in thousands) | Metric | Year Ended June 30, 2023 | Year Ended June 30, 2022 | | :--- | :--- | :--- | | Operating lease cost | $13,818 | $10,202 | | Total finance lease cost | $776 | $729 | Supplemental Lease Information (in thousands) | Metric | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Operating lease right-of-use assets | $56,773 | $41,111 | | Total operating lease liabilities | $63,393 | $45,417 | | Weighted average remaining operating lease term | 6.2 years | 5.5 years | | Weighted average operating lease discount rate | 5.29% | 4.33% | - The company has finance leases for equipment and operating leases for office and warehouse space, with terms expiring through **November 2033**[325](index=325&type=chunk) [NOTE 6 – PROPERTY, TECHNOLOGY, AND EQUIPMENT](index=72&type=section&id=NOTE%206%20%E2%80%93%20PROPERTY%2C%20TECHNOLOGY%2C%20AND%20EQUIPMENT) Net property, technology, and equipment totaled $25.4 million as of June 30, 2023, with depreciation and amortization expenses of $7.4 million for the year Property, Technology, and Equipment, Net (in thousands) | Metric | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Property, technology, and equipment, net | $25,389 | $24,823 | | Depreciation and amortization expenses | $7,410 | $7,331 | - Computer software includes approximately **$548 thousand of software in development** as of June 30, 2023[328](index=328&type=chunk) [NOTE 7 – GOODWILL AND INTANGIBLE ASSETS](index=72&type=section&id=NOTE%207%20%E2%80%93%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill increased to $89.2 million and net intangible assets decreased to $36.6 million as of June 30, 2023, with amortization expense of $15.3 million for the year Goodwill and Intangible Assets (in thousands) | Metric | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Goodwill | $89,203 | $88,199 | | Intangible assets, net | $36,641 | $48,545 | | Amortization expense (intangible assets) | $15,290 | $11,385 | | Future amortization expense (FY2024) | $10,071 | N/A | - Definite-lived intangible assets include customer related, trade names and trademarks, licenses, developed technology, and non-compete agreements, amortized over periods up to **15 years**[286](index=286&type=chunk)[330](index=330&type=chunk) - Rebranding of certain trade names resulted in a reduction of their useful lives and accelerated amortization expense from **June 2022 to December 2022**[331](index=331&type=chunk) [NOTE 8 – NOTES PAYABLE](index=73&type=section&id=NOTE%208%20%E2%80%93%20NOTES%20PAYABLE) As of June 30, 2023, the company had no outstanding borrowings on its $200 million Revolving Credit Facility but $4.2 million outstanding on senior secured Canadian term loans Notes Payable (in thousands) | Metric | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Revolving credit facility outstanding | $0 | $62,525 | | Senior secured loans outstanding | $4,204 | $8,902 | | Total notes payable, net of current portion | $0 | $66,719 | | Future maturities of notes payable (FY2024) | $4,204 | N/A | - The **$200 million Revolving Credit Facility** (established August 2022) had no outstanding borrowings as of **June 30, 2023**, and is subject to maximum consolidated net leverage ratio of **3.00** and minimum consolidated interest coverage ratio of **3.00**[334](index=334&type=chunk)[337](index=337&type=chunk) - Senior secured Canadian term loans from FPD IV (**CAD$29 million**) and FPD V (**CAD$10 million**) mature in **April 2024 and June 2024**, respectively, both accruing interest at **6.65% per annum**[338](index=338&type=chunk)[339](index=339&type=chunk) - As of **June 30, 2023**, the company was in compliance with all its covenants[341](index=341&type=chunk) [NOTE 9 – DERIVATIVES](index=75&type=section&id=NOTE%209%20%E2%80%93%20DERIVATIVES) The company uses $30 million in interest rate swap contracts to manage interest rate risk, with fair value changes recognized in comprehensive income - The company uses interest rate swap contracts with a total notional amount of **$30 million** to manage interest rate risk, effectively converting a portion of its Revolving Credit Facility from a floating to a fixed rate[342](index=342&type=chunk)[343](index=343&type=chunk) - Neither interest rate swap contract is designated as a hedge, and gains and losses from changes in fair value are recognized in the consolidated statements of comprehensive income[344](index=344&type=chunk) - The fair value of derivative instruments (interest rate swap contracts) was **$2,229 thousand (asset) as of June 30, 2023**, and **$1,846 thousand (asset) as of June 30, 2022**[343](index=343&type=chunk)[351](index=351&type=chunk) [NOTE 10 – STOCKHOLDERS' EQUITY](index=76&type=section&id=NOTE%2010%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) The company is authorized to issue 100 million common shares and 5 million preferred shares, and repurchased 1.78 million common shares for $11.06 million in FY2023 - Authorized to issue **100,000,000 shares of common stock** and **5,000,000 shares of preferred stock** (none outstanding)[345](index=345&type=chunk) Common Stock Repurchases (in thousands, except share data) | Fiscal Year Ended June 30 | Shares Purchased | Aggregate Cost | | :--- | :--- | :--- | | 2023 | 1,784,249 | $11,063 | | 2022 | 1,622,792 | $11,346 | - The board authorized the repurchase of up to **5,000,000 shares of common stock** through **December 31, 2023**[346](index=346&type=chunk) [NOTE 11 – VARIABLE INTEREST ENTITY AND RELATED PARTY TRANSACTIONS](index=76&type=section&id=NOTE%2011%20%E2%80%93%20VARIABLE%20INTEREST%20ENTITY%20AND%20RELATED%20PARTY%20TRANSACTIONS) Radiant Logistics Partners, LLC (RLP), a variable interest entity 60% owned by the CEO's entity, is consolidated into the financial statements - Radiant Logistics Partners, LLC (RLP) is a variable interest entity, **60% owned by an entity of the Company's CEO**, and is consolidated into the financial statements[273](index=273&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk) RLP Net Income and Non-Controlling Interest (in thousands) | Metric | Year Ended June 30, 2023 | Year Ended June 30, 2022 | | :--- | :--- | :--- | | RLP Net Income | $1,077 | $1,712 | | RCP's Distributable Share (Non-controlling interest) | $646 | $1,027 | [NOTE 12 – FAIR VALUE MEASUREMENT](index=78&type=section&id=NOTE%2012%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENT) Contingent consideration and interest rate swap contracts are measured at fair value on a recurring basis, with values of $(4.17) million and $2.23 million respectively as of June 30, 2023 Financial Assets (Liabilities) Measured at Fair Value on a Recurring Basis (in thousands) | Metric | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Contingent consideration (liability) | $(4,173) | $(5,530) | | Interest rate swap contracts (asset) | $2,229 | $1,846 | - Contingent consideration is measured quarterly at fair value using projected future financial results and discounted earn-out payments (Level 3 inputs), with changes recognized in comprehensive income[353](index=353&type=chunk)[354](index=354&type=chunk) - Fair market value of interest rate swaps is determined using Level 3 unobservable inputs from a proprietary pricing service[355](index=355&type=chunk) [NOTE 13 – INCOME TAXES](index=79&type=section&id=NOTE%2013%20%E2%80%93%20INCOME%20TAXES) Total income tax expense decreased to $6.3 million in FY2023, with the effective tax rate higher than the U.S. federal statutory rate due to state and foreign income taxes Income Tax Expense (Benefit) (in thousands) | Category | Year Ended June 30, 2023 | Year Ended June 30, 2022 | | :--- | :--- | :--- | | Total current income tax expense | $9,798 | $15,295 | | Total deferred income tax benefit | $(3,493) | $(2,603) | | **Income tax expense** | **$6,305** | **$12,692** | - The effective tax rate for FY2023 is higher than the U.S. federal statutory rate (**21%**) primarily due to state and foreign income taxes[358](index=358&type=chunk) - Net deferred tax liabilities decreased from **$6,482 thousand in FY22 to $2,944 thousand in FY23**[359](index=359&type=chunk) [NOTE 14 – SHARE-BASED COMPENSATION](index=80&type=section&id=NOTE%2014%20%E2%80%93%20SHARE-BASED%20COMPENSATION) The 2021 Omnibus Incentive Plan allows for various share-based awards, with total compensation expense of $2.5 million in FY2023 and unrecognized costs of $5.4 million - The 2021 Omnibus Incentive Plan permits granting share-based awards (restricted stock, restricted stock units, stock options) to eligible individuals[360](index=360&type=chunk) Share-Based Compensation Expense (in thousands) | Metric | Year Ended June 30, 2023 | Year Ended June 30, 2022 | | :--- | :--- | :--- | | Restricted Stock Units compensation expense | $2,432 | $1,728 | | Stock Options compensation expense | $71 | $70 | - As of **June 30, 2023**, total unrecognized share-based compensation cost was approximately **$5,172 thousand for restricted stock units** (weighted average period of **1.79 years**) and **$208 thousand for stock options** (weighted average period of **2.93 years**)[361](index=361&type=chunk)[363](index=363&type=chunk) [NOTE 15 – COMMITMENTS AND CONTINGENCIES](index=83&type=section&id=NOTE%2015%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) As of June 30, 2023, there were no material legal proceedings, but the company faces post-year-end counterclaims and ongoing risks from the 2021 ransomware incident - No potentially material legal proceedings as of **June 30, 2023**; subsequent to year-end, the company initiated claims against a former customer for unpaid receivables, facing counterclaims for alleged breach of contract[366](index=366&type=chunk)[367](index=367&type=chunk) - The **December 2021 ransomware incident** resulted in revenue loss, costs, and data extraction, with ongoing potential for claims related to data privacy[368](index=368&type=chunk) Estimated Discounted Earn-out Payments (in thousands) | Fiscal Year Ended June 30 | Cash | | :--- | :--- | | 2024 | $3,886 | | 2025 | $287 | | **Total** | **$4,173** | - As of **June 30, 2023**, the company has **$2,697 thousand in non-cancelable contractual commitments** related to warehouse equipment, tenant improvements, and furniture/fixtures for operating leases not yet commenced[371](index=371&type=chunk) [NOTE 16 – OPERATING AND GEOGRAPHIC SEGMENT INFORMATION](index=83&type=section&id=NOTE%2016%20%E2%80%93%20OPERATING%20AND%20GEOGRAPHIC%20SEGMENT%20INFORMATION) The company operates in two reportable segments, United States and Canada, with a Corporate/Eliminations segment for centralized costs - The company has two operating and reportable segments: United States and Canada, with a Corporate/Eliminations segment for executive, professional services, and corporate costs[372](index=372&type=chunk)[373](index=373&type=chunk) Segment Performance (FY2023, in thousands) | Metric | United States | Canada | Corporate/Eliminations | Total | | :--- | :--- | :--- | :--- | :--- | | Revenues | $937,497 | $148,374 | $(385) | $1,085,486 | | Income (loss) from operations | $41,619 | $14,605 | $(28,103) | $28,121 | | Total assets | $284,889 | $108,852 | $0 | $393,741 | | Goodwill | $68,823 | $20,380 | $0 | $89,203 | [NOTE 17 − BUSINESS COMBINATIONS](index=84&type=section&id=NOTE%2017%20%E2%88%92%20BUSINESS%20COMBINATIONS) In FY2023, the company acquired Cascade Enterprises for $3.25 million cash, and in FY2022, Navegate for $38.85 million cash, both contributing to goodwill and intangible assets - In FY2023, acquired Cascade Enterprises of Minnesota, Inc. for **$3,250 thousand cash** and **$1,789 thousand in contingent consideration**, resulting in **$1,598 thousand of goodwill** recorded in the U.S. segment[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) - In FY2022, acquired Navegate, Inc. for **$38,852 thousand cash**, resulting in **$16,424 thousand of goodwill** recorded in the U.S. operating segment and **$19,022 thousand in identifiable intangible assets**[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) - Fair values of intangible assets for both acquisitions were estimated using a discounted cash flow approach with Level 3 inputs[377](index=377&type=chunk)[382](index=382&type=chunk) [NOTE 18 − SUBSEQUENT EVENTS](index=87&type=section&id=NOTE%2018%20%E2%88%92%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2023, and through September 5, 2023, the company repurchased 2,030 shares of Common Stock for $13 thousand - Subsequent to **June 30, 2023**, and through **September 5, 2023**, the company repurchased **2,030 shares of Common Stock** for a total cost of **$13 thousand**[386](index=386&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=88&type=section&id=ITEM%209%2E%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) This item states that no changes in or disagreements with accountants on accounting and financial disclosure were reported [ITEM 9A. CONTROLS AND PROCEDURES](index=88&type=section&id=ITEM%209A%2E%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2023, due to material weaknesses in revenue transaction processing and IT general controls, with remediation ongoing [Disclosure Controls and Procedures](index=88&type=section&id=Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2023, due to material weaknesses, yet believes financial statements are fairly presented - CEO and CFO concluded that disclosure controls and procedures were ineffective as of **June 30, 2023**, due to material weaknesses in internal control over financial reporting[390](index=390&type=chunk) - Management believes that the consolidated financial statements fairly present, in all material respects, the financial position, results of operations, and cash flows, despite the material weaknesses[391](index=391&type=chunk) [Management's Report on Internal Control over Financial Reporting](index=88&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management is responsible for ICFR, but concluded it was not effective as of June 30, 2023, due to material weaknesses, acknowledging inherent limitations - Management is responsible for establishing and maintaining adequate internal control over financial reporting (ICFR)[392](index=392&type=chunk) - Concluded that ICFR wa