Radiant(US:RLGT)2024-05-09 20:55Part I: Financial Information Financial Statements (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 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 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 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 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 offices23 - 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 202478 - The company has a $200 million revolving credit facility with no outstanding borrowings as of March 31, 20249092 - A cybersecurity incident related to Canadian operations was detected in March 2024, but is not expected to materially impact financial condition or results of operations122123 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) 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 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 period152166 Liquidity and Capital Resources 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 capital176 - A $200 million revolving credit facility is available, with no borrowings outstanding as of March 31, 2024181183 - 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 2023177 Quantitative and Qualitative Disclosures about Market Risk 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 debt189 - 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, 2024189 - 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 million190 Controls and Procedures 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, 2024192 - 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 accruals193194 - Material weaknesses exist in IT General Controls (ITGCs) related to change management and user access rights for key Transportation Management and ERP systems195198 Part II: Other Information Legal Proceedings 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 uncertain121201 Risk Factors 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, 2023202 Unregistered Sale of Equity Securities and Use of Proceeds 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, 2025203 - No shares were repurchased in the quarter ended March 31, 2024, leaving the full 5,000,000 shares available for repurchase203 Other Information No other material information was reported under this item for the current reporting period - No information was reported under this item204 Exhibits 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 files205