Radiant Logistics Announces Results For First Quarter Ended September 30, 2012

BELLEVUE, Wash., Nov. 12, 2012 /PRNewswire/ -- Radiant Logistics, Inc. (NYSE: RLGT), a domestic and international logistics services company, today reported financial results for the three months ended September 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20110606/CL14193LOGO )

First Fiscal Quarter Ended September 30 Financial Highlights

For the three months ended September 30, 2012, Radiant reported net income attributable to shareholders of $403,000 on $79.1 million of revenues, or $0.01 per basic and fully diluted share, which included a loss of $50,000 on change in contingent consideration and $251,000 in non-recurring legal costs. For the three months ended September 30, 2011, Radiant reported net income attributable to shareholders of $655,000 on $71.8 million of revenues, or $0.02 per basic and fully diluted share, which included $283,000 in non-recurring transition costs.

The Company also reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $2,506,000 for the three months ended September 30, 2012, which included $251,000 in non-recurring legal costs, compared to adjusted EBITDA of $1,639,000 for the three months ended September 30, 2011, which included $283,000 in non-recurring transition costs, for an increase of $867,000. Excluding these non-recurring costs, the Company would have reported $2,757,000 in adjusted EBITDA for the quarter ended June 30, 2012, for an increase of $835,000, or an increase of 43.4% over the comparable prior year period. A reconciliation of the Company's adjusted EBITDA to the most directly comparable GAAP measure appears at the end of this release.

Network Expansion - Organic and Acquisitive Growth

The Company announced further organic expansion of its network in the quarter with new operations in Oakland, California. The Oakland location, operating under the Airgroup brand, is led by Jill Carter and Donna Johnson and services a diversified base of domestic and international customers.

On November 1, 2012, the Company completed the acquisition of the assets of its operating partner, Marvir Logistics, a privately held company based in Los Angeles, California that had operated under the Company's Airgroup brand since 2006. The Company structured the transaction similar to its previous transactions with a portion of the expected purchase price payable in subsequent periods based on the future performance of the acquired assets and operations. The transaction is expected to provide meaningful cost synergies as it is combined with existing Company owned operations in Los Angeles.

CEO Comments

"We continue to make steady progress in our organic growth and acquisition strategies and in the integration of our recent acquisitions, delivering another quarter of solid double-digit growth in adjusted EBITDA," said Bohn Crain, Chairman and CEO. "For our first fiscal quarter of 2013, we posted adjusted EBITDA of $2,506,000 an increase of $867,000 or 52.9% over the comparable prior year period. Our ability to leverage our personnel and general administrative costs as a function of our net revenues is what will really allow us to drive profitable growth. As a percentage of net revenues, our adjusted EBITDA increased from 7.8% to 11.2% compared to the same period last year. We are excited to see these metrics begin to come back into line with the DBA integration largely behind us."

"We are also very excited about the Marvir transaction which combines well with our existing Company-owned operation in Los Angeles and builds critical density in this strategic gateway location. The Marvir transaction and our long-standing partnership with Marvir founders Tom Bowling and Walter Benvenuto are significant in the evolution of Radiant Logistics. We launched Radiant in January of 2006 with the goal of bringing value to logistics entrepreneurs who would benefit from our unique value proposition with the immediate opportunity to become shareholders and share in the value that they were helping create in conjunction with the longer-term opportunity to take advantage of a built-in exit strategy available to all entrepreneurs participating in our network. Marvir was the first independent agent location to join the Radiant family after our initial platform acquisition of Airgroup back in 2006 and has consistently been one of the larger operating partners in our network. We are very proud to be able to support them in their transition and help them reach their individual goals. We believe the Marvir transaction showcases our broader opportunity to support other independent agent stations, both internal and external to our existing network. The Company's flexible offering of an outright purchase, or the opportunity to participate in the Radiant Network as an independent owner with the option to sell at a later date - like Tom and Walter have done make Radiant an attractive partner."

Mr. Crain continued, "Historically, potential network candidates have been receptive to Radiant's acquisition program because they are often too small to be identified as acquisition targets by larger public companies or to independently attempt their own public offerings. Radiant's value proposition has also been able to deliver consistent organic growth with many entrepreneurs choosing to join as an independent agent with the thought of selling at a later date. This allows them the unique opportunity to align themselves with a publicly-traded network enterprise, with access to Radiant's buying power, technology platform and international partner network to better support their customers - all while preserving their option for liquidity downstream. This remains a very exciting time in the evolution of Radiant, as our value proposition continues to gain traction within the forwarding community and we remain confident that our growth strategy will continue to bring value to our operating partners, shareholders and the end customers that we serve."

Reconciliation of Non-GAAP Financial Measures

We believe that supplemental disclosure of our adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization adjusted for stock-based compensation, unusual items and other non-cash costs is a useful measure for investors because it eliminates the effect of certain non-cash costs and provides an important metric for our business. A reconciliation of adjusted EBITDA amounts to net income, the most directly comparable GAAP measure is as follows:

(Amounts in 000's) THREE MONTHS ENDED SEPTEMBER 30, ------------- 2012 2011 ---- ---- Net income $403 $655 Income tax expense 340 401 Interest expense, net 491 88 Depreciation and amortization 1,120 390 ----- --- EBITDA 2,354 1,534 Share-based compensation 102 24 Change in change in contingent consideration 50 - Transaction & severance costs - 81 --- --- Adjusted EBITDA (1) $2,506 $1,639 ====== ======

((1) )(For the three months ended September 30, 2012, adjusted EBITDA included $251,000 in nonrecurring legal expenses and $283,000 in nonrecurring transition costs associated with the Company's acquisition of DBA for quarter September 30, 2011. Excluding these non-recurring costs, the Company would have reported $2,757,000 in adjusted EBITDA for the quarter ended September 30, 2012, and $1,922,000 for the quarter ending September 30, 2011, for an increase of $835,000, or 43.4%.)

This supplemental financial information is presented for informational purposes only and is not a substitute for the historical financial information presented in accordance with accounting principles generally accepted in the United States.

Investor Conference Call

Radiant will host a conference call for shareholders and the investing community on Tuesday, November 13, 2012 at 8:00 am, ET to discuss the contents of this release. The call can be accessed by dialing (877) 407-8031, or (201) 689-8031 for international participants, and is expected to last approximately 30 minutes. Callers are requested to dial in 5 minutes before the start of the call. An audio replay will be available for one week after the teleconference by dialing (877) 660-6853, or (201) 612-7415 for international callers, and using account number 286 and conference ID number 400815.

About Radiant Logistics (NYSE: RLGT)

Radiant Logistics (www.radiantdelivers.com) is a non-asset based transportation and logistics company providing domestic and international freight forwarding and fulfillment services through a network of company-owned and independent agent offices across North America. The company operates under the Radiant, Airgroup, Adcom, and DBA brands servicing a diversified account base including manufacturers, distributors and retailers using a network of independent carriers and international agents positioned strategically around the world.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to trends in the domestic and global economy, our ability to attract new and retain existing agency relationships, acquisitions and integration of acquired entities, availability of capital to support our acquisition strategy, our ability to maintain and improve back office infrastructure and transportation and accounting information systems in a manner sufficient to service our revenues and network of operating locations, outcomes of legal proceedings, competition, management of growth, potential fluctuations in operating results, and government regulation. More information about factors that potentially could affect Radiant Logistics, Inc. financial results is included Radiant Logistics, Inc.'s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings.

RADIANT LOGISTICS, INC. Consolidated Balance Sheets (unaudited) September 30, June 30, 2012 2012 ---- ---- ASSETS Current assets Cash and cash equivalents $676,477 $66,888 Accounts receivable, net of allowance of $1,469,245 and $1,311,670, respectively 53,803,171 51,939,016 Current portion of employee and other receivables 264,721 201,451 Income tax deposit - 11,248 Prepaid expenses and other current assets 3,770,884 2,573,531 Deferred tax asset 734,136 684,231 ------- ------- Total current assets 59,249,389 55,476,365 ---------- ---------- Furniture and equipment, net 1,773,197 1,735,157 --------- --------- Acquired intangibles, net 10,765,717 11,722,812 Goodwill 14,951,217 14,951,217 Employee and other receivables, net of current portion 149,880 162,088 Deposits and other assets 422,500 422,500 Deferred tax asset 357,422 33,259 Total long-term assets 26,646,736 27,291,876 ---------- ---------- Total assets $87,669,322 $84,503,398 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued transportation costs $36,684,523 $37,131,212 Commissions payable 3,323,547 2,929,449 Other accrued costs 2,095,881 2,041,596 Income taxes payable 240,079 - Current portion of notes payable to former shareholders of DBA 767,092 767,092 Amounts due to former shareholders of acquired operations 2,664,224 2,664,224 Other current liabilities 65,289 64,392 ------ ------ Total current liabilities 45,840,635 45,597,965 ---------- ---------- Notes payable and other long-term debt, net of current portion and debt discount 22,886,367 20,532,934 Contingent consideration 6,250,000 6,200,000 Deferred rent liability 682,090 680,521 Other long-term liabilities 73,224 89,887 ------ ------ Total long-term liabilities 29,891,681 27,503,342 ---------- ---------- Total liabilities 75,732,316 73,101,307 ---------- ---------- Stockholders' equity Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued or outstanding - - Common stock, $0.001 par value, 50,000,000 shares authorized; 33,041,430 and 33,025,865 issued and outstanding, respectively 14,497 14,481 Additional paid-in capital 13,123,506 13,003,987 Deferred compensation (18,034) - Retained deficit (1,310,775) (1,713,928) ---------- ---------- Total Radiant Logistics, Inc. stockholders' equity 11,809,194 11,304,540 ---------- ---------- Non-controlling interest 127,812 97,551 ------- ------ Total stockholders' equity 11,937,006 11,402,091 ---------- ---------- Total liabilities and stockholders' equity $87,669,322 $84,503,398 =========== ===========

RADIANT LOGISTICS, INC. Consolidated Statements of Operations (unaudited) THREE MONTHS ENDED SEPTEMBER 30, ------------- 2012 2011 ---- ---- Revenue $79,148,458 $71,833,044 Cost of transportation 56,910,016 50,594,124 ---------- ---------- Net revenues 22,238,442 21,238,920 Agent commissions 13,295,325 13,892,425 Personnel costs 3,757,372 2,893,738 Selling, general and administrative expenses 2,900,237 2,661,126 Depreciation and amortization 1,119,804 390,393 Transition costs associated with DBA acquisition - 282,636 Change in contingent consideration 50,000 - Total operating expenses 21,122,738 20,120,318 ---------- ---------- Income from operations 1,115,704 1,118,602 Other income (expense): Interest income 4,073 4,934 Interest expense (495,331) (92,088) Other 148,972 72,729 Total other expense (342,286) (14,425) -------- ------- Income before income tax expense 773,418 1,104,177 Income tax expense (340,004) (401,469) -------- -------- Net income 433,414 702,708 Less: Net income attributable to non-controlling interest (30,261) (47,681) ------- ------- Net income attributable to Radiant Logistics, Inc. $403,153 $655,027 ======== ======== Net income per common share - basic and diluted $0.01 $0.02 ===== ===== Weighted average shares outstanding: Basic shares 33,031,110 31,676,438 Diluted shares 35,602,281 34,609,965

RADIANT LOGISTICS, INC. Reconciliation of Adjusted EBITDA to Net Income and Net Cash Provided By Operating Activities (unaudited)

As used in this report, adjusted EBITDA means earnings before interest, income taxes, depreciation and amortization adjusted for stock-based compensation and other non-cash charges. We believe that adjusted EBITDA, as presented, represents a useful method of assessing the performance of our operating activities, as it reflects our earnings trends without the impact of certain non-cash charges. Adjusted EBITDA is also used by our creditors in assessing debt covenant compliance. We understand that although securities analysts frequently use EBITDA in their evaluation of companies, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. EBITDA is not intended as an alternative to cash flow provided by operating activities as a measure of liquidity, as an alternative to net income as an indicator of our operating performance, nor as an alternative to any other measure of performance in conformity with accounting principles generally accepted in the United States of America.

The following is a reconciliation of adjusted EBITDA to both net income and cash flow provided by operating activities:

THREE MONTHS ENDED SEPTEMBER 30, ------------- 2012 2011 ---- ---- Adjusted EBITDA $2,505,720 $1,639,024 Transaction related costs - (80,737) Share-based compensation (101,501) (24,244) Change in contingent consideration (50,000) - ------- --- EBITDA 2,354,219 1,534,043 Depreciation and amortization (1,119,804) (390,393) Interest expense, net (491,258) (87,154) Income tax expense (340,004) (401,469) -------- -------- Net income 403,153 655,027 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES: Share-based compensation expense 101,501 24,244 Amortization of intangibles 957,095 290,755 Depreciation and leasehold amortization 162,709 99,638 Deferred income tax benefit (374,068) (151,744) Amortization of loan fees and original issue discount 66,008 - Change in contingent consideration 50,000 - Change in non-controlling interest of subsidiaries 30,261 47,681 Provision for doubtful accounts 157,575 150,586 CHANGE IN OPERATING ASSETS AND LIABILITIES: Accounts receivable (2,021,730) (1,144,808) Employee and other receivables (51,062) 26,557 Income tax deposit and income taxes payable 251,327 (844,582) Prepaid expenses, deposits and other assets (1,197,353) (1,370,143) Accounts payable and accrued transportation costs (446,689) 2,622,130 Commissions payable 394,098 39,761 Other accrued costs 54,285 (104,210) Other liabilities (15,766) (14,917) Deferred rent liability 1,569 (1,162) Total adjustments (1,880,240) (330,214) ---------- -------- Net cash provided by (used for) operating activities $(1,477,087) $324,813 =========== ========

CONTACT: Stuart Hanson, +1-253-677-5337, shanson@radiantdelivers.com

Web site: http://www.radiantdelivers.com/