Filing delays overshadow Radiant Logistics (RLGT)’s impressive cash production

Radiant Logistics (RLGT) last night announced preliminary operating results for the second quarter of fiscal year 2023. Earnings and earnings declined 15% and 7% in the period to $283.5 million and 13 cents, lighter than analysts had expected of $345 million and 16 cents, but actually is better than my view, the company has previously communicated its expectation that business will return to more normalized levels and growth rates (from the high levels enjoyed during the pandemic) as the economy continues to slow. was

In particular, quarterly revenue figures include transportation and other service pass-through costs, which can fluctuate significantly from quarter to quarter due to the high variability of these costs (including fuel). I have. Excluding these charges, net revenue actually increased 5% to $75.2 million. Similarly, its earnings include amortization of intangible assets. This is a non-cash expense that is commonly excluded by most businesses. If RLGT followed the same rules, earnings are estimated to increase by approximately $2 million (4 cents per share) to 17 cents.

This modest cash-based operating result is evidenced by the fact that RLGT generated a whopping $42.3 million in cash from its operations during the quarter. And while there were clearly other factors that contributed to this unusually high level of cash production that weren’t disclosed in this bulletin, it’s unlikely the company will end the quarter with a net cash position. It does not change the fact that For the first time in its history.

That’s why the real reason these preliminary results haven’t lifted RLGT share is the latest 10-K annual report for fiscal 2022 and the subsequent 10-Q for the most recent two quarters. I believe this is due to continued delays in filing. You can formally submit these reports.

Importantly, however, based on the work done to date to resolve these accounting issues, the net impact of the restatement on earnings per share during the affected periods is not comparable. conservatively, RLGT expects to represent a decline of about 1 cent per share. in both his first nine months of fiscal year 2021 and fiscal year 2022. Therefore, the fact that fiscal 2022 was a record year is unlikely to have left RLGT with historically low leverage on its balance sheet and excellent financial flexibility to continue to execute on its strategy going forward. is. change. This is an optimistic view of stocks resuming their recent uptrend and rising to much higher levels.