Monday, July 22, 2024

Radiant Logistics completes restatement of financials

Radiant Logistics announced on Monday full quarterly results for the first time since May 2022. The Renton, Washington-based 3PL has been mired in a financial restatement process tied to revenue and expense recognition for in-transit shipments.

The process delayed the financial filing for multiple periods as prior-year results were being reviewed. The company was resolute all along that the net impact from the restatement process would be minimal.

“Why in the world would the company pay its accountants and lawyers millions of dollars, run the risk of being delisted and undergo the organizational brain damage to restate our financial statements for what amounted to 1 penny per share, particularly in light of the fact that the company was doing so well?” Bohn Crain, founder and CEO, said on a call with analysts Monday after the close. “Not by choice I can assure you.”

He described the requirement from auditors as “very subjective.”

Table: Radiant’s key performance indicators

For the first half of its 2023 fiscal year, ended Dec. 31, Radiant (NYSE: RLGT) reported revenue of $609 million, a 4% year-over-year (y/y) decline. Net revenue was up 11% as purchased transportation expense declined 330 basis points as a percentage of revenue. Adjusted earnings per share of 48 cents was 3 cents higher than the prior-year period.

“These results reflect the benefit of our scalable non-asset-based business model, our diversity of service offerings, and our ability to quickly respond to changing market dynamics and support our customers in this capacity constrained market,” Crain stated in a news release.

Adjusted earnings before interest, taxes, depreciation and amortization in the period was nearly $2 million higher at $33.9 million. Adjusted EBITDA for the most recent 12-month period was $82.8 million.

Citing a slowdown in the macro environment, management is forecasting a normalized annual adjusted EBITDA run rate of $55 million to $60 million. For calendar 2023, it expects a larger percentage of EBITDA to be generated in the back half.

“As we have previously discussed, while we remain very optimistic about our prospects for fiscal year 2023 and beyond, we are definitely seeing signs of a slowing economy and expect operations to return to more normalized levels and growth rates in coming quarters,” Crain added.

Crain said its domestic forwarding, Canadian contract logistics and time-definite (trade show and cruise line freight) offerings continue to do well while brokerage (intermodal and truck) and international trade (air and ocean) are struggling.

The company generated $65.5 million in cash flow from operations in the recent six-month period, ending the year in a net cash position for the first time in company history.

Radiant will continue to use free cash flow to make acquisitions and repurchase stock. It repurchased $5 million in stock during the first half of fiscal 2023.

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