02/08/2024 | Press release | Distributed by Public on 02/08/2024 21:16
Nevada
|
86-1005291
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
80 Eighth Avenue | ||
New York, New York
|
10011
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading symbols(s)
|
Name of each exchange
on which registered
|
||
None
|
None
|
None
|
Large accelerated filer ☐
|
Accelerated filer
|
☐ |
Non-accelerated filer ☐
|
Smaller reporting company
|
☒ |
Emerging growth company
|
☐ |
Page
|
|||
Part I - Financial Information
|
3
|
||
Item 1.
|
Financial Statements
|
3
|
|
Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and September 30, 2023
|
3
|
||
Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and 2023 (unaudited)
|
4
|
||
Condensed Consolidated Statement of Stockholders' Equity for the three and nine months ended June 30, 2024 and 2023 (unaudited)
|
5
|
||
Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2024 and 2023 (unaudited)
|
6
|
||
Notes to Condensed Consolidated Financial Statements (unaudited)
|
7
|
||
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
19
|
|
Item 4.
|
Controls and Procedures
|
28
|
|
Part II - Other Information
|
29
|
||
Item 1.
|
Legal Proceedings
|
29
|
|
Item 1A.
|
Risk Factors
|
29
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
29
|
|
Item 6.
|
Exhibit Index
|
29
|
|
Signatures
|
30
|
ITEM 1. |
FINANCIAL STATEMENTS
|
|
June 30,
2024
|
September 30,
2023
|
||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash
|
$
|
3,054
|
$
|
2,461
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
32,627
|
27,518
|
||||||
Inventory, net
|
4,556
|
4,850
|
||||||
Prepaid expenses and other current assets
|
4,477
|
4,459
|
||||||
Total current assets
|
44,714
|
39,288
|
||||||
Property and Equipment, net
|
5,296
|
4,922
|
||||||
Other Assets:
|
||||||||
Intangible assets, net
|
23,830
|
22,683
|
||||||
Goodwill
|
23,946
|
20,317
|
||||||
Restricted cash |
250 | - | ||||||
Investment in Rubicon at fair value | 831 | 1,573 | ||||||
Operating lease right of use asset
|
9,113
|
7,460
|
||||||
Security deposits and other long-term assets
|
586
|
591
|
||||||
Total other assets
|
58,556
|
52,624
|
||||||
Total assets
|
$
|
108,566
|
$
|
96,834
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Lines of credit
|
$
|
22,081
|
$
|
19,709
|
||||
Accounts payable - trade
|
32,058
|
25,447
|
||||||
Accrued expenses and other current liabilities
|
6,973
|
6,337
|
||||||
Dividends payable
|
2,271
|
2,029
|
||||||
Current portion of earnout
|
1,149
|
592
|
||||||
Current portion of long-term debt
|
716
|
715
|
||||||
Current portion of subordinated promissory notes-related party
|
1,683
|
1,988
|
||||||
Current portion of operating lease liabilities
|
2,445
|
2,020
|
||||||
Total current liabilities
|
69,376
|
58,837
|
||||||
Other Liabilities:
|
||||||||
Long-term debt
|
4,282
|
5,784
|
||||||
Long-term portion of earnout
|
2,011
|
1,738
|
||||||
Subordinated promissory notes-related party
|
3,790
|
3,424
|
||||||
Mandatorily redeemable non-controlling interest
|
965
|
565
|
||||||
Deferred income taxes
|
1,341
|
1,341
|
||||||
Long-term operating lease liabilities
|
7,034
|
5,689
|
||||||
Other liabilities
|
529
|
483
|
||||||
Total other liabilities
|
19,952
|
19,024
|
||||||
Total liabilities
|
89,328
|
77,861
|
||||||
Stockholders' Equity:
|
||||||||
Preferred Stock, $0.001 par value; 100,000 shares authorized
|
||||||||
Series C 30,000shares authorized and 11,368shares issued and outstanding at June 30, 2024and September 30, 2023, liquidation value of $7,955and $7,713at June 30, 2024 and September 30, 2023, respectively
|
- | - | ||||||
Common stock, $0.001par value; 4,500,000shares authorized, 1,206,354issued and 1,186,354outstanding as of June 30, 2024 and September 30, 2023, respectively
|
1
|
1
|
||||||
Paid-in capital
|
17,068
|
17,107
|
||||||
Common treasury stock, at cost, 20,000 shares
|
(240
|
)
|
(240
|
)
|
||||
Accumulated earnings
|
2,409
|
2,105
|
||||||
Total stockholders' equity
|
19,238
|
18,973
|
||||||
Total liabilities and stockholders' equity
|
$
|
108,566
|
$
|
96,834
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Revenues
|
$
|
46,724
|
$
|
42,557
|
$
|
129,881
|
$
|
144,979
|
||||||||
Forwarding expenses and cost of revenues
|
31,633
|
28,898
|
86,822
|
102,654
|
||||||||||||
Gross profit
|
15,091
|
13,659
|
43,059
|
42,325
|
||||||||||||
Cost and Expenses:
|
||||||||||||||||
Selling, general and administrative
|
13,358
|
12,948
|
38,664
|
38,261
|
||||||||||||
Amortization of intangible assets
|
555
|
524
|
1,635
|
1,593
|
||||||||||||
Total Costs and Expenses
|
13,913
|
13,472
|
40,299
|
39,854
|
||||||||||||
Income from Operations
|
1,178
|
187
|
2,760
|
2,471
|
||||||||||||
Other Items:
|
||||||||||||||||
Interest expense
|
(589
|
)
|
(528
|
)
|
(1,663
|
)
|
(1,476
|
)
|
||||||||
Other expense
|
(437
|
)
|
(269
|
)
|
(381 | ) | (779 | ) | ||||||||
Income (Loss) Before Income Taxes
|
152
|
(610
|
)
|
716
|
216
|
|||||||||||
Income tax benefit (expense)
|
(343
|
)
|
180
|
(412
|
)
|
(68
|
)
|
|||||||||
Net Income (Loss)
|
(191
|
)
|
(430
|
)
|
304
|
148
|
||||||||||
Preferred stock dividends
|
(85
|
)
|
(70
|
)
|
(242
|
)
|
(212
|
)
|
||||||||
Net Income (Loss) Available to Common Stockholders
|
$
|
(276
|
)
|
$
|
(500
|
)
|
$
|
62
|
$
|
(64
|
)
|
|||||
Net income (loss) per share
|
||||||||||||||||
Basic
|
$
|
(0.16
|
)
|
$
|
(0.36
|
)
|
$
|
0.25
|
$
|
0.12
|
||||||
Diluted
|
$
|
(0.16
|
)
|
$
|
(0.36
|
)
|
$
|
0.25
|
$
|
0.12
|
||||||
Net income (loss) per share attributable to common stockholders:
|
||||||||||||||||
Basic
|
$
|
(0.23
|
)
|
$
|
(0.42
|
)
|
$
|
0.05
|
$
|
(0.05
|
)
|
|||||
Diluted
|
$
|
(0.23
|
)
|
$
|
(0.42
|
)
|
$
|
0.05
|
$
|
(0.05
|
)
|
|||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
|
1,186.4
|
1,186.4
|
1,186.4
|
1,186.4
|
||||||||||||
Diluted
|
1,186.4
|
1,186.4
|
1,205.9
|
1,186.4
|
PREFERRED
STOCK
|
COMMON STOCK
|
PAID-IN
CAPITAL
|
COMMON TREASURY
STOCK
|
ACCUMULATED
EARNINGS
|
TOTAL
EQUITY
|
|||||||||||||||||||||||||||||||
SHARES
|
$ |
SHARES
|
$ |
$ |
SHARES
|
$ | $ |
$ |
||||||||||||||||||||||||||||
Balance - September 30, 2023
|
11,368
|
$
|
-
|
1,206,354
|
$
|
1
|
$
|
17,107
|
20,000
|
$
|
(240
|
)
|
$
|
2,105
|
$
|
18,973
|
||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
276
|
276
|
|||||||||||||||||||||||||||
Dividends to preferred stockholders
|
-
|
-
|
-
|
-
|
(72
|
)
|
-
|
-
|
-
|
(72
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
68
|
-
|
-
|
-
|
68
|
|||||||||||||||||||||||||||
Balance - December 31, 2023
|
11,368
|
$
|
-
|
1,206,354
|
$
|
1
|
$
|
17,103
|
20,000
|
$
|
(240
|
)
|
$
|
2,381
|
$
|
19,245
|
||||||||||||||||||||
Net Income
|
- | - | - | - | - | - | - | 219 | 219 | |||||||||||||||||||||||||||
Dividends to preferred stockholders
|
- | - | - | - | (85 | ) | - | - | - | (85 | ) | |||||||||||||||||||||||||
Stock based compensation
|
- | - | - | - | 68 | - | - | - | 68 | |||||||||||||||||||||||||||
Balance - March 31, 2024
|
11,368 | $ | - | 1,206,354 | $ | 1 | $ | 17,086 | 20,000 | $ | (240 | ) | $ | 2,600 | $ | 19,447 | ||||||||||||||||||||
Net Loss |
- | - | - | - | - | - | - | (191 | ) | (191 | ) | |||||||||||||||||||||||||
Dividends to preferred stockholders |
- | - | - | - | (85 | ) | - | - | - | (85 | ) | |||||||||||||||||||||||||
Stock based compensation |
- | - | - | - | 67 | - | - | - | 67 | |||||||||||||||||||||||||||
Balance - June 30, 2024 |
11,368 | $ | - | 1,206,354 | $ | 1 | $ | 17,068 | 20,000 | $ | (240 | ) | $ | 2,409 | $ | 19,238 |
PREFERRED
STOCK
|
COMMON STOCK
|
PAID-IN
CAPITAL
|
COMMON TREASURY
STOCK
|
ACCUMULATED
EARNINGS
|
TOTAL
EQUITY
|
|||||||||||||||||||||||||||||||
SHARES
|
$ |
SHARES
|
$ |
$ |
SHARES
|
$ |
$ |
$ |
||||||||||||||||||||||||||||
Balance - September 30, 2022
|
11,368
|
$
|
-
|
1,206,354
|
$
|
1
|
$
|
17,184
|
20,000
|
$
|
(240
|
)
|
$
|
1,382
|
$
|
18,327
|
||||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
360
|
360
|
|||||||||||||||||||||||||||
Dividends to preferred stockholders
|
-
|
-
|
-
|
-
|
(72
|
)
|
-
|
-
|
-
|
(72
|
)
|
|||||||||||||||||||||||||
Stock-based compensation |
-
|
-
|
-
|
-
|
51
|
-
|
-
|
-
|
51
|
|||||||||||||||||||||||||||
Balance - December 31, 2022
|
11,368
|
$
|
-
|
1,206,354
|
$
|
1
|
$
|
17,163
|
20,000
|
$
|
(240
|
)
|
$
|
1,742
|
$
|
18,666
|
||||||||||||||||||||
Net Income
|
- | - | - | - | - | - | - | 218 | 218 | |||||||||||||||||||||||||||
Dividends to preferred stockholders
|
- | - | - | - | (70 | ) | - | - | - | (70 | ) | |||||||||||||||||||||||||
Stock based compensation
|
- | - | - | - | 53 | - | - | - | 53 | |||||||||||||||||||||||||||
Balance - March 31, 2023
|
11,368 | $ | - | 1,206,354 | $ | 1 | $ | 17,146 | 20,000 | $ | (240 | ) | $ | 1,960 | $ | 18,867 | ||||||||||||||||||||
Net Loss |
- | - | - | - | - | - | - | (430 | ) | (430 | ) | |||||||||||||||||||||||||
Dividends to preferred stockholders |
- | - | - | - | (70 | ) | - | - | - | (70 | ) | |||||||||||||||||||||||||
Stock based compensation |
- | - | - | - | 51 | - | - | - | 51 | |||||||||||||||||||||||||||
Balance - June 30, 2023 |
11,368 | $ | - | 1,206,354 | $ | 1 | $ | 17,127 | 20,000 | $ | (240 | ) | $ | 1,530 | $ | 18,418 |
Nine Months Ended
June 30,
|
||||||||
2024
|
2023
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
304
|
$
|
148
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Recovery of uncollectible accounts
|
(71
|
)
|
(292
|
)
|
||||
Depreciation
|
404
|
373
|
||||||
Deferred income tax provision
|
-
|
(8
|
)
|
|||||
Amortization of intangible assets
|
1,635
|
1,593
|
||||||
Amortization of acquired inventory valuation
|
264
|
320
|
||||||
Amortization of loan costs
|
72
|
63
|
||||||
Stock-based compensation
|
214
|
185
|
||||||
Unrealized loss on marketable securities
|
742 |
779 |
||||||
Change in fair value of mandatorily redeemable noncontrolling interest
|
400
|
-
|
||||||
Fair value adjustments of contingent earnout liabilities
|
553 | - | ||||||
Gain on extinguishment of debt
|
(21 | ) | - | |||||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
(3,292
|
)
|
27,056
|
|||||
Inventory
|
38
|
(106
|
)
|
|||||
Prepaid expenses and other current assets
|
102
|
(1,151
|
)
|
|||||
Security deposits and other long-term assets
|
4
|
(82
|
)
|
|||||
Accounts payable and accrued expenses
|
4,844
|
(17,996
|
)
|
|||||
Other liabilities
|
162
|
174
|
||||||
Net cash provided by operating activities
|
6,354
|
11,056
|
||||||
Cash flows from investing activities:
|
||||||||
Acquisition of property and equipment, net of disposals
|
(658
|
)
|
(267
|
)
|
||||
Earnout payment
|
(740 | ) | (1,693 | ) | ||||
Acquisitions, net of cash acquired
|
(3,795
|
)
|
(4,401
|
)
|
||||
Net cash used in investing activities
|
(5,193
|
)
|
(6,361
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayments of term loan
|
(1,573
|
)
|
(1,113
|
)
|
||||
Proceeds from (Payments to) Lines of credit, net
|
2,372
|
(7,101
|
)
|
|||||
Repayment of subordinate promissory notes, net
|
(1,117
|
)
|
(299
|
)
|
||||
Net cash used in financing activities
|
(318
|
)
|
(8,513
|
)
|
||||
Net increase (decrease) in cash
|
843
|
(3,818
|
)
|
|||||
Cash at beginning of the period
|
2,461
|
6,591
|
||||||
Cash and restricted cash at end of period
|
3,304
|
2,773
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
1,442
|
$
|
1,208
|
||||
Income taxes
|
$
|
556
|
$
|
1,300
|
||||
Non-cash operating activities:
|
||||||||
Contingent earnout acquisition
|
$ | 64 | $ | 300 | ||||
Due to former owners
|
$ | 740 | $ | 455 | ||||
Non-cash investing activities:
|
||||||||
Airschott subordinated promissory note
|
$ | 1,200 | $ | - | ||||
Airschott contingent deferred consideration
|
$ | 952 | $ | - | ||||
Non-cash financing activities:
|
||||||||
Dividends declared to preferred stockholders
|
$
|
242
|
$
|
212
|
1. |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Service Type
|
||||||||||||||||
Trucking
|
$
|
18,689
|
$
|
19,314
|
$
|
55,040
|
$
|
61,671
|
||||||||
Ocean
|
10,443 | 7,502 | 25,204 | 34,908 | ||||||||||||
Air
|
6,733
|
5,638
|
19,261
|
17,096
|
||||||||||||
Customs Brokerage and Other |
4,812
|
5,030
|
12,486
|
15,487
|
||||||||||||
Total
|
$
|
40,677
|
$
|
37,484
|
$
|
111,991
|
$
|
129,162
|
2. |
ACQUISITIONS
|
3. |
INVENTORY
|
June 30,
2024
|
September 30,
2023
|
|||||||
Finished goods
|
$
|
1,998
|
$
|
2,095
|
||||
Work-in-process
|
800
|
969
|
||||||
Raw materials
|
1,789
|
1,811
|
||||||
Gross inventory
|
4,587
|
4,875
|
||||||
Less - reserve for inventory valuation
|
(31
|
)
|
(25
|
)
|
||||
Inventory net
|
$
|
4,556
|
$
|
4,850
|
4. |
INTANGIBLE ASSETS
|
June 30,
2024
|
September 30,
2023
|
Life
|
|||||||
Customer relationships
|
$
|
27,939
|
$
|
25,238
|
10-24 Years
|
||||
Trademarks/names
|
4,541
|
4,559
|
1-20 Years
|
||||||
Trademarks/names
|
541
|
521
|
Indefinite
|
||||||
Other
|
2,007
|
1,929
|
2-22 Years
|
||||||
|
35,028
|
32,247
|
|||||||
Less: Accumulated Amortization
|
(11,198
|
)
|
(9,564
|
)
|
|||||
Intangible assets, net
|
$
|
23,830
|
$
|
22,683
|
June 30,
2024
|
September 30,
2023
|
|||||||
Logistics
|
$
|
20,543
|
$
|
18,174
|
||||
Life Sciences | 6,785 | 6,373 | ||||||
Manufacturing
|
7,700
|
7,700
|
||||||
|
35,028
|
32,247
|
||||||
Less: Accumulated Amortization
|
(11,198
|
)
|
(9,564
|
)
|
||||
Intangible assets, net
|
$
|
23,830
|
$
|
22,683
|
5. |
GOODWILL
|
June 30,
2024
|
September 30,
2023
|
|||||||
Logistics
|
$
|
12,729
|
$
|
9,175
|
||||
Life Sciences | 6,171 | 6,096 | ||||||
Manufacturing
|
5,046
|
5,046
|
||||||
Total |
$
|
23,946
|
$
|
20,317
|
6. |
NOTES PAYABLE - BANKS
|
(A) |
Santander Bank Facility
|
(B) |
First Merchants Bank Credit Facility
|
(in thousands) |
June 30,
2024
|
September 30,
2023
|
||||||
Total Debt
|
$
|
4,998
|
$
|
6,499
|
||||
Less Current Portion
|
(716
|
)
|
(715
|
)
|
||||
Long-term Portion |
$
|
4,282
|
$
|
5,784
|
7. |
SUBORDINATED PROMISSORY NOTES - RELATED PARTY
|
(A)
|
ICT Subordinated Promissory Note
|
(B)
|
ELFS Subordinated Promissory Notes
|
(C)
|
Airschott Subordinated Promissory Note
|
(in thousands) |
June 30,
2024
|
September 30,
2023
|
||||||
Total subordinated promissory notes
|
$
|
5,473
|
$
|
5,412
|
||||
Less current portion of subordinated promissory notes
|
(1,683
|
)
|
(1,988
|
)
|
||||
Long-term portion of subordinated promissory notes
|
$
|
3,790
|
$
|
3,424
|
8. |
STOCKHOLDERS' EQUITY
|
9. |
STOCK-BASED COMPENSATION
|
Number
of Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term (in years)
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||||||||||
Outstanding balance at September 30, 2023
|
40,993
|
$
|
22.53
|
6.6
|
$
|
962.27
|
||||||||||
Granted
|
12,500
|
$
|
28.25
|
9.3
|
$
|
193.50
|
||||||||||
Expired | (3,500 | ) |
$ |
3.25 | - | $ | - | |||||||||
Outstanding balance at June 30, 2024
|
49,993
|
$
|
25.31
|
7.1
|
$
|
1,014.09
|
||||||||||
Exercisable at June 30, 2024
|
24,162
|
$
|
12.63
|
5.5
|
$
|
751.52
|
10. |
INCOME PER COMMON SHARE
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
(in thousands, except per share data)
|
2024 |
2023
|
2024 |
2023
|
||||||||||||
Income:
|
||||||||||||||||
Net income (loss)
|
$
|
(191
|
)
|
$
|
(430
|
)
|
$
|
304
|
$
|
148
|
||||||
Preferred stock dividends
|
(85
|
)
|
(70
|
)
|
(242
|
)
|
(212
|
)
|
||||||||
Net income (loss) available to common stockholders
|
$
|
(276
|
)
|
$
|
(500
|
)
|
$
|
62
|
$
|
(64
|
)
|
|||||
Common Shares:
|
||||||||||||||||
Basic - weighted average common shares
|
1,186.4
|
1,186.4
|
1,186.4
|
1,186.4
|
||||||||||||
Effect of dilutive securities: |
||||||||||||||||
Stock options
|
-
|
-
|
19.5
|
-
|
||||||||||||
Diluted - weighted average common stock
|
1,186.4
|
1,186.4
|
1,205.9
|
1,186.4
|
||||||||||||
Income per Common Share:
|
||||||||||||||||
Basic -
|
||||||||||||||||
Net income (loss)
|
$
|
(0.16
|
)
|
$
|
(0.36
|
)
|
$
|
0.25
|
$
|
0.12
|
||||||
Preferred stock dividends
|
(0.07
|
)
|
(0.06
|
)
|
(0.20
|
)
|
(0.17
|
)
|
||||||||
Net income (loss) available to common stockholders
|
$
|
(0.23
|
)
|
$
|
(0.42
|
)
|
$
|
0.05
|
$
|
(0.05
|
)
|
|||||
Diluted -
|
||||||||||||||||
Net income (loss)
|
$
|
(0.16
|
)
|
$
|
(0.36
|
)
|
$
|
0.25
|
$
|
0.12
|
||||||
Preferred stock dividends
|
(0.07
|
)
|
(0.06
|
)
|
(0.20
|
)
|
(0.17
|
)
|
||||||||
Net income (loss) available to common stockholders
|
$
|
(0.23
|
)
|
$
|
(0.42
|
)
|
$
|
0.05
|
$
|
(0.05
|
)
|
11. |
INCOME TAXES
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
|
2024 |
2023
|
2024 |
2023
|
||||||||||||
Federal taxes at statutory rates
|
$
|
(32
|
)
|
$
|
129
|
$
|
(150
|
)
|
$
|
(45
|
)
|
|||||
Permanent differences and other
|
(184
|
)
|
31
|
(91
|
)
|
(5
|
)
|
|||||||||
State and local taxes, net of Federal benefit
|
(127 | ) | 20 | (171 | ) | (18 | ) | |||||||||
Total
|
$
|
(343
|
)
|
$
|
180
|
$
|
(412
|
)
|
$
|
(68
|
)
|
12. |
BUSINESS SEGMENT INFORMATION
|
For the three months endedJune 30, 2024
(in thousands)
|
Consolidated
|
Logistics
|
Life Sciences
|
Manufacturing
|
Corporate
|
|||||||||||||||
Revenues
|
$
|
46,724
|
$
|
40,677
|
$
|
3,208
|
$
|
2,839
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
31,633
|
29,725
|
609
|
1,299
|
-
|
|||||||||||||||
Gross profit
|
15,091
|
10,952
|
2,599
|
1,540
|
-
|
|||||||||||||||
Selling, general and administrative
|
13,358
|
9,444
|
1,812
|
793
|
1,309
|
|||||||||||||||
Amortization of intangible assets
|
555
|
-
|
-
|
-
|
555
|
|||||||||||||||
Income (loss) from operations
|
1,178
|
1,508
|
787
|
747
|
(1,864
|
)
|
||||||||||||||
Interest expense
|
589
|
426
|
97
|
66
|
-
|
|||||||||||||||
Identifiable assets
|
108,566
|
42,025
|
12,075
|
4,374
|
50,092
|
|||||||||||||||
Capital expenditures, net of disposals
|
331
|
21
|
302
|
8
|
-
|
For the ninemonths ended June 30, 2024
(in thousands)
|
Consolidated
|
Logistics
|
Life Sciences
|
Manufacturing
|
Corporate
|
|||||||||||||||
Revenues
|
$
|
129,881
|
$
|
111,991
|
$
|
10,213
|
$
|
7,677
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
86,822
|
81,232
|
2,065
|
3,525
|
-
|
|||||||||||||||
Gross profit
|
43,059
|
30,759
|
8,148
|
4,152
|
-
|
|||||||||||||||
Selling, general and administrative
|
38,664
|
27,186
|
5,307
|
2,364
|
3,807
|
|||||||||||||||
Amortization of intangible assets
|
1,635
|
-
|
-
|
-
|
1,635
|
|||||||||||||||
Income (loss) from operations
|
2,760
|
3,573
|
2,841
|
1,788
|
(5,442
|
)
|
||||||||||||||
Interest expense
|
1,663
|
1,188
|
245
|
230
|
-
|
|||||||||||||||
Identifiable assets
|
108,566
|
42,025
|
12,075
|
4,374
|
50,092
|
|||||||||||||||
Capital expenditures, net of disposals
|
658
|
|
47
|
603
|
8
|
-
|
For the three months ended June 30, 2023
(in thousands)
|
Consolidated
|
Logistics
|
Life Sciences
|
Manufacturing
|
Corporate
|
|||||||||||||||
Revenues
|
$
|
42,557
|
$
|
37,484
|
$
|
2,811
|
$
|
2,262
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
28,898
|
27,241
|
575
|
1,082
|
-
|
|||||||||||||||
Gross profit
|
13,659
|
10,243
|
2,236
|
1,180
|
-
|
|||||||||||||||
Selling, general and administrative
|
12,948
|
9,629
|
1,512
|
717
|
1,090
|
|||||||||||||||
Amortization of intangible assets
|
524
|
-
|
-
|
-
|
524
|
|||||||||||||||
Income (loss) from operations
|
187
|
614
|
724
|
463
|
(1,614
|
)
|
||||||||||||||
Interest expense
|
528
|
347
|
86
|
95
|
-
|
|||||||||||||||
Identifiable assets
|
99,566
|
38,066
|
11,025
|
4,228
|
46,247
|
|||||||||||||||
Capital expenditures, net of disposals
|
89
|
89
|
-
|
-
|
-
|
For the ninemonths ended June 30, 2023
(in thousands)
|
Consolidated
|
Logistics
|
Life Sciences
|
Manufacturing
|
Corporate
|
|||||||||||||||
Revenues
|
$
|
144,979
|
$
|
129,162
|
$
|
8,717
|
$
|
7,100
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
102,654
|
97,339
|
1,930
|
3,385
|
-
|
|||||||||||||||
Gross profit
|
42,325
|
31,823
|
6,787
|
3,715
|
-
|
|||||||||||||||
Selling, general and administrative
|
38,261
|
27,891
|
4,592
|
2,267
|
3,511
|
|||||||||||||||
Amortization of intangible assets
|
1,593
|
-
|
-
|
-
|
1,593
|
|||||||||||||||
Income (loss) from operations
|
2,471
|
3,932
|
2,195
|
1,448
|
(5,104
|
)
|
||||||||||||||
Interest expense
|
1,476
|
1,006
|
165
|
305
|
-
|
|||||||||||||||
Identifiable assets
|
99,566
|
38,066
|
11,025
|
4,228
|
46,247
|
|||||||||||||||
Capital expenditures, net of disposals
|
267
|
214
|
51
|
2
|
-
|
13.
|
FAIR VALUE MEASUREMENTS
|
Assets
|
June 30,
2024 |
September 30,
2023
|
||||||
Level 1 Investment in Rubicon at fair value
|
$
|
831
|
|
1,573
|
June 30,
2024
|
September 30,
2023
|
|||||||
Balance beginning of period
|
$
|
1,573
|
$
|
2,371
|
||||
Fair value adjustment to Rubicon investment
|
(742
|
)
|
(798
|
)
|
||||
Balance end of period
|
$
|
831
|
$
|
1,573
|
Contingent earnout liabilities
|
June 30,
2024
|
September 30,
2023
|
||||||
Level 1 Contingent earnout liabilities
|
$ | 2,070 | $ | - | ||||
Level 3 Contingent earnout liabilities
|
1,090 | 2,330 | ||||||
Total |
$
|
3,160
|
$
|
2,330
|
June 30,
2024
|
September 30,
2023
|
|||||||
Balance beginning of period
|
$
|
2,330
|
$
|
4,580
|
||||
Fair value of contingent consideration recorded in connection with business combinations
|
1,017
|
300
|
||||||
Earnout payment | (740 | ) | (1,693 | ) | ||||
Adjustments to earnout | 435 | - | ||||||
Fair value adjustment of contingent earnout liabilities | 118 | (857 | ) | |||||
Balance end of period
|
$
|
3,160
|
$
|
2,330
|
14. |
LEASES
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
|
2024 |
2023
|
2024 |
2023
|
||||||||||||
Operating lease cost
|
$
|
644
|
$
|
523
|
$
|
1,857
|
$
|
1,540
|
||||||||
Short-term lease cost
|
38 | 150 | 125 | 283 | ||||||||||||
Total lease cost
|
$
|
682
|
$
|
673
|
$
|
1,982
|
$
|
1,823
|
2025
|
$
|
2,906
|
||
2026
|
2,543
|
|||
2027
|
1,812
|
|||
2028 |
1,540
|
|||
2029
|
769
|
|||
Thereafter |
1,656 | |||
Total undiscounted lease payments
|
11,226
|
|||
Less imputed interest
|
(1,747
|
)
|
||
Total lease obligations
|
$
|
9,479
|
ITEM 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
(in thousands)
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
Revenues
|
$
|
46,724
|
$
|
42,557
|
$
|
129,881
|
$
|
144,979
|
||||||||
Forwarding expenses and cost of revenues
|
31,633
|
28,898
|
86,822
|
102,654
|
||||||||||||
Gross profit
|
15,091
|
13,659
|
43,059
|
42,325
|
||||||||||||
Total costs and expenses
|
13,913
|
13,472
|
40,299
|
39,854
|
||||||||||||
Income from operations
|
1,178
|
187
|
2,760
|
2,471
|
||||||||||||
Net income (loss)
|
(191
|
)
|
(430
|
)
|
304
|
148
|
||||||||||
Adjusted operating income
|
$
|
1,897
|
$
|
876
|
$
|
4,873
|
$
|
4,569
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
(in thousands)
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
Income from operations
|
$
|
1,178
|
$
|
187
|
$
|
2,760
|
$
|
2,471
|
||||||||
Amortization of intangible assets
|
555
|
524
|
1,635
|
1,593
|
||||||||||||
Stock-based compensation
|
71
|
62
|
214
|
185
|
||||||||||||
Cost recognized on sale of acquired inventory
|
93
|
103
|
264
|
320
|
||||||||||||
Adjusted operating income
|
$
|
1,897
|
$
|
876
|
$
|
4,873
|
$
|
4,569
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Revenues
|
$
|
40,677
|
$
|
37,484
|
$
|
111,991
|
$
|
129,162
|
||||||||
Forwarding expenses
|
29,725
|
27,241
|
81,232
|
97,339
|
||||||||||||
Gross profit
|
10,952
|
10,243
|
30,759
|
31,823
|
||||||||||||
Gross profit margin
|
26.9
|
%
|
27.3
|
%
|
27.5
|
%
|
24.6
|
%
|
||||||||
Selling, general and administrative expenses
|
9,444
|
9,629
|
27,186
|
27,891
|
||||||||||||
Income from operations
|
$
|
1,508
|
$
|
614
|
$
|
3,573
|
$
|
3,932
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Revenues
|
$
|
3,208
|
$
|
2,811
|
$
|
10,213
|
$
|
8,717
|
||||||||
Cost of sales
|
521
|
472
|
1,801
|
1,610
|
||||||||||||
Cost recognized upon sale of acquired inventory
|
88
|
103
|
264
|
320
|
||||||||||||
Gross profit
|
2,599
|
2,236
|
8,148
|
6,787
|
||||||||||||
Gross profit margin
|
81.0
|
%
|
79.5
|
%
|
79.8
|
%
|
77.9
|
%
|
||||||||
Selling, general and administrative expenses
|
1,812
|
1,512
|
5,307
|
4,592
|
||||||||||||
Income from operations
|
$
|
787
|
$
|
724
|
$
|
2,841
|
$
|
2,195
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Revenues
|
$
|
2,839
|
$
|
2,262
|
$
|
7,677
|
$
|
7,100
|
||||||||
Cost of sales
|
1,299
|
1,082
|
3,525
|
3,385
|
||||||||||||
Gross profit
|
1,540
|
1,180
|
4,152
|
3,715
|
||||||||||||
Gross profit margin
|
54.2
|
%
|
52.2
|
%
|
54.1
|
%
|
52.3
|
%
|
||||||||
Selling, general and administrative expenses
|
793
|
717
|
2,364
|
2,267
|
||||||||||||
Income from operations
|
$
|
747
|
$
|
463
|
$
|
1,788
|
$
|
1,448
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
(in thousands)
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
Total income from operations by segment
|
$
|
3,042
|
$
|
1,801
|
$
|
8,202
|
$
|
7,575
|
||||||||
Corporate expenses
|
(1,238
|
)
|
(1,028
|
)
|
(3,593
|
)
|
(3,326
|
)
|
||||||||
Amortization of intangible assets
|
(555
|
)
|
(524
|
)
|
(1,635
|
)
|
(1,593
|
)
|
||||||||
Stock-based compensation
|
(71
|
)
|
(62
|
)
|
(214
|
)
|
(185
|
)
|
||||||||
Total corporate expenses
|
(1,864
|
)
|
(1,614
|
)
|
(5,442
|
)
|
(5,104
|
)
|
||||||||
Interest expense
|
(589
|
)
|
(528
|
)
|
(1,663
|
)
|
(1,476
|
)
|
||||||||
Fair value adjustments to Rubicon investment (net of dividends)
|
(95
|
)
|
(269
|
)
|
481
|
(779
|
)
|
|||||||||
Fair value adjustments of contingent earnout liabilities
|
(88
|
)
|
-
|
(483
|
)
|
-
|
||||||||||
Gain on extinguishment
|
-
|
-
|
21
|
-
|
||||||||||||
Change in fair value of mandatorily redeemable non-controlling interest
|
(254
|
)
|
-
|
(400
|
)
|
-
|
||||||||||
Net income (loss) before taxes
|
152
|
(610
|
)
|
716
|
216
|
|||||||||||
Income tax benefit (expense)
|
(343
|
)
|
180
|
(412
|
)
|
(68
|
)
|
|||||||||
Net income (loss)
|
(191
|
)
|
(430
|
)
|
304
|
148
|
||||||||||
Preferred stock dividends
|
(85
|
)
|
(70
|
)
|
(242
|
)
|
(212
|
)
|
||||||||
Net income (loss) Available to Common Stockholders
|
$
|
(276
|
)
|
$
|
(500
|
)
|
$
|
62
|
$
|
(64
|
)
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 6. |
EXHIBIT INDEX
|
10.1
|
Consent, Joinder and Seventh Amendment to Amended and Restated Loan and Security Agreement, dated as of June 5, 2024, by and among Santander Bank, N.A., as lender, Janel Group, Inc., Expedited Logistics and Freight Services, LLC, ELFS Brokerage LLC, Janel Corporation, Expedited Logistics and Freight Services, LLC and Airschott, Inc. (filed herewith)
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (filed herewith)
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith)
|
32.1
|
Section 1350 Certification of Principal Executive Officer (filed herewith)
|
32.2
|
Section 1350 Certification of Chief Financial Officer (filed herewith)
|
101
|
Interactive data files providing financial information from the Company's Quarterly Report on Form 10-Q for the three and nine months ended June 30, 2024 and 2023 in Inline XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June 30, 2024 and September 30, 2023, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and 2023, (iii) Condensed Consolidated Statement of Changes in Stockholders' Equity for the three and nine months June 30, 2024 and 2023, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2024 and 2023, and (v) Notes to Condensed Consolidated Financial Statements.
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101) (filed herewith)
|
Dated: August 2, 2024
|
JANEL CORPORATION
|
Registrant
|
|
/s/ Darren C. Seirer
|
|
Darren C. Seirer
|
|
Chairman, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
Dated: August 2, 2024
|
JANEL CORPORATION
|
Registrant
|
|
/s/ Joseph R. Ferrara
|
|
Joseph R. Ferrara
|
|
Chief Financial Officer, Treasurer and Secretary
|