Radiant(US:RLGT)2025-05-12 20:55PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents unaudited condensed consolidated financial statements, including Balance Sheets, Income, and Cash Flows, reflecting growth in assets, liabilities, revenue, and net income Condensed Consolidated Balance Sheets Total assets increased to $414.5 million from $371.2 million, driven by acquisitions, while total liabilities grew to $196.2 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | June 30, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $19,041 | $24,874 | | Accounts receivable, net | $134,730 | $118,016 | | Goodwill | $115,385 | $93,043 | | Intangible assets, net | $47,785 | $34,943 | | Total assets | $414,502 | $371,185 | | Liabilities & Equity | | | | Accounts payable | $74,051 | $73,558 | | Notes payable | $15,000 | $0 | | Contingent consideration (current & long-term) | $19,813 | $5,165 | | Total liabilities | $196,185 | $161,676 | | Total equity | $218,317 | $209,509 | Condensed Consolidated Statements of Comprehensive Income Q3 2025 net income reached $2.5 million on $214.0 million revenue, a turnaround from a prior-year loss, with nine-month net income surging to $12.5 million Financial Performance Highlights (in thousands, except per share data) | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $214,007 | $184,559 | $682,116 | $596,438 | | Income (loss) from operations | $3,334 | $(906) | $15,860 | $4,419 | | Net income (loss) | $2,572 | $(615) | $12,505 | $3,351 | | Diluted EPS | $0.05 | $(0.02) | $0.25 | $0.06 | Condensed Consolidated Statements of Cash Flows Operating cash flow decreased to $10.2 million, while investing activities used $29.8 million for acquisitions, and financing provided $13.9 million from credit facility proceeds Cash Flow Summary (in thousands) | Activity | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $10,153 | $15,996 | | Net cash used for investing activities | $(29,792) | $(8,875) | | Net cash provided by (used for) financing activities | $13,937 | $(8,257) | | Net decrease in cash | $(5,833) | $(1,236) | Notes to the Condensed Consolidated Financial Statements Provides detailed accounting policies, revenue recognition, acquisition details, segment performance, credit facility status, and discloses a material weakness in revenue recognition internal controls - The company operates as a third-party logistics provider in the U.S. and Canada, utilizing a network of over 100 operating locations, including independent agents and company-owned sites17 - For the nine months ended March 31, 2025, U.S. operations generated $599.6 million in revenue, while Canadian operations generated $82.7 million69 - Goodwill increased from $93.0 million to $115.4 million due to $23.3 million in acquisitions during the nine months ended March 31, 202576 - The company has a $200 million syndicated revolving credit facility maturing in August 2027, with $15.0 million outstanding as of March 31, 20257881 - During the nine months ended March 31, 2025, the company completed four acquisitions: Foundation Logistics & Services, Focus Logistics, TCB Transportation, and Transcon Shipping111112113114 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, highlighting revenue growth from acquisitions and project charters, strong Adjusted EBITDA, and solid liquidity with $19.0 million cash and a $200 million credit facility Results of Operations Q3 2025 revenue grew 16.7% to $214.0 million, with nine-month revenue up 15.6% to $682.1 million, driven by acquisitions and project charters, leading to significant net income increases Q3 Performance Comparison (in millions) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $214.0 | $184.6 | +16.0% | | Adjusted Gross Profit | $58.2 | $53.1 | +9.5% | | Net Income (Loss) | $2.5 | $(0.7) | N/A | | Adjusted EBITDA | $9.4 | $5.2 | +80.6% | Nine-Month Performance Comparison (in millions) | Metric | 9M 2025 | 9M 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $682.1 | $596.4 | +14.4% | | Adjusted Gross Profit | $179.0 | $175.9 | +1.8% | | Net Income | $12.4 | $2.9 | +327.6% | | Adjusted EBITDA | $30.9 | $22.1 | +39.8% | - The decrease in operating partner commissions as a percentage of adjusted gross profit is due to the conversion of strategic operating partners to company-owned locations and a higher percentage of gross profit from these locations140155 Liquidity and Capital Resources Primary liquidity sources are cash from operations and a $200 million revolving credit facility, with $19.0 million cash and $15.0 million outstanding, supporting acquisitions and working capital - Primary liquidity sources are cash from operations and a $200 million revolving credit facility162167 - As of March 31, 2025, the company had $19.0 million in cash and $15.0 million outstanding on its credit facility162170 - During the nine months ended March 31, 2025, the company used $25.7 million for acquisitions and $0.7 million for common stock repurchases164166 Item 3. Quantitative and Qualitative Disclosures about Market Risk The company faces market risks from foreign exchange rate fluctuations, primarily USD/CAD, and interest rate changes on its revolving credit facility, impacting net income and interest expense - The company has foreign exchange risk from its Canadian operations; a 1.0% change in exchange rates would affect net income by approximately $0.02 million for the nine months ended March 31, 2025171 - The company is subject to interest rate risk on its Revolving Credit Facility; a 1.0% increase in interest rates would increase annual interest expense by approximately $0.01 million for every $1.0 million borrowed172 Item 4. Controls and Procedures Disclosure controls and procedures were ineffective due to a material weakness in revenue recognition internal controls, with ongoing remediation efforts aiming for resolution in fiscal year 2025 - The CEO and CFO concluded that disclosure controls and procedures were ineffective as of March 31, 2025174 - A material weakness exists in internal controls over financial reporting related to the recording and processing of revenues, specifically regarding the completeness and accuracy of revenue179 - Management is implementing enhanced controls, including transaction testing, variance analysis, and improved accrual procedures, with the goal of resolving the material weakness in fiscal year 2025180181184 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not aware of any pending or threatened material legal proceedings outside the ordinary course of business - The company states that it is not involved in any material legal proceedings outside the ordinary course of business186 Item 1A. Risk Factors Highlights material changes to risk factors, including adverse impacts from U.S. trade policy changes and the unreliability of period-to-period comparisons due to economic volatility and acquisitions - A new risk factor highlights that changes in U.S. trade policy and the imposition of tariffs may have a material adverse effect on the company's business and freight volumes188189 - A revised risk factor warns that period-to-period comparisons of operating results are not necessarily meaningful indicators of future performance due to economic volatility, supply chain issues, and the impact of acquisitions191 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details the stock repurchase program, noting no shares were repurchased in Q3 2025, with 4,676,592 shares remaining available under the program through December 2025 - The company did not repurchase any common stock during the three months ended March 31, 2025192 - As of March 31, 2025, 4,676,592 shares may still be purchased under the current stock repurchase program, which runs through December 31, 2025192 Item 5. Other Information Reports no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q3 fiscal 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the quarter ended March 31, 2025193 Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files Signatures The report was signed on May 12, 2025, by Bohn H. Crain, CEO, and Todd E. Macomber, CFO - The report is signed by Bohn H. Crain (CEO) and Todd E. Macomber (CFO) on May 12, 2025198