RLGT 10-K & 10-Q changes, risk factors and insider trading

We sell our services through Company-owned locations operating under the Radiant brands and through a network of independently owned strategic operating partners throughout North America operating under the Airgroup, Adcom, DBA, and Service by Air brands. For theboth fiscal years ended June 30, 20252026 and 2024,2025, approximately 42% and 50% of our consolidated adjusted gross profit (this is a non-U.S. Generally Accepted Accounting Principles (“GAAP”) measure, see further discussion and reconciliation to a GAAP measure in Item 7) was derived through our strategic operating partners. We believe our strategic operating partners will remain a critical component to our success for the foreseeable future. Although the terms of our strategic operating partner agreements vary widely, they generally cover the manner and amount of payments, the services to be performed, the length of the contract, and provide us with certain protections such as strategic operating partner-funded reserves against potential bad debts, indemnification obligations, and in certain instances include a personal guaranty of the independent owner(s) of the strategic operating partners. Certain of our strategic operating partner agreements are for defined terms, while others are subject to “evergreen” terms, or contain automatic renewal provisions or are at-will on a month-to-month basis. Regardless of the stated term, in most situations the agreements can be terminated by the strategic operating partner with applicable contractual notice. As certain agreements expire, there can be no assurance that we will be able to enter into new agreements that provide for the same terms and economics as those previously agreed upon, if at all. Thus, we are subject to the risk of strategic operating partner terminations and the failure or refusal of certain of our strategic operating partners to renew their existing agreements. This risk is often accentuated upon the acquisition of a new agency-based network. We have a number of customers and strategic operating partner locations with significant volume and stature; however, no single customer or strategic operating partner location represents more than 10% of our consolidated revenue. We cannot be certain that we will be able to maintain and expand our existing strategic operating partner relationships or enter into new strategic operating partner relationships, or that new or renewed strategic operating partner relationships will be available on commercially reasonable terms. If we are unable to maintain and expand our existing strategic operating partner relationships, renew existing strategic operating partner relationships, or enter into new strategic operating partner relationships, we may lose customers, customer introductions and co-marketing benefits, and our operating results may be negatively impacted. We may also be restricted from growing in certain territories or with certain customers, except through our strategic operating partners.

We have been and may in the future be subject to cybersecurity attacks and other intentional hacking. ForWhile example,we ashave previouslyexperienced disclosed,cybersecurity events in the past, those incidents have been fully investigated, remediated, and resolved, and did not have a material effect on Decemberour 8,business 2021,strategy, we detected a ransomware incident impacting certainresults of our operational and information technology systems. Onoperations, or aboutfinancial March 14, 2024, through our information technology systems monitoring tools, we detected what was determined to be the initial stages of a cybersecurity incident related to our Canadian operations. Even though in both instances, we recovered our systems and returned our operations to full functionality, the incident did result in a modest loss of revenue as well as certain incremental costs.condition. Any failure to design or maintain our information technology systems so that they can prevent,prevent or at least identify and address such cybersecurity risks could result in corruption or loss of our data, service interruptions, operational difficulties, loss of revenues or market share, liability to customers or others for any potential loss of Personal Identifiable Information, diversion of resources, injury to our reputation and increased service and maintenance costs. Addressing such issues could prove to be impossible or very costly and responding to resulting claims or liability could similarly involve substantial cost. Additionally, the insurance coverage we have in place may not apply to particular loss or it may not be sufficient to cover all liabilities to which we may be subject.

We rely on commercial airfreight carriers and air charter operators, ocean freight carriers, trucking companies, major U.S. railroads, other transportation companies, draymen and longshoremen for the movement of our customers’ cargo. Consequently, our ability to provide services for our customers could be adversely impacted by, among other things: shortages in available cargo capacity; changes by carriers and transportation companies in policies and practices such as scheduling, pricing, payment terms and frequency of service, increases in the cost of fuel, taxes, and labor, changes in the financial stability or operating capabilities of carriers, and other factors not within our control. Reductions in trucking, airfreight, or ocean freight capacity could negatively impact our yields.margins. Material interruptions in service or stoppages in transportation, whether caused by supply chain irregularities, strike, work stoppage, lock-out, slowdown, other supply chain issues or otherwise, could adversely impact our business, results of operations and financial condition.

We have increased, and intend to further increase, our revenue through organic growth, adding strategic operating partners, and acquisitions. We believe that certain of our costs, such as those related to information technology, physical locations, senior management, and sales and general operations, and excluding non-cash amortization, should grow more slowly than our adjusted gross profit, which would lead to improved cash flow margins over time. Historically, our cash flow margins have fluctuated, and have not always improved as we have grown. To the extent we fail to manage our costs, including purchased transportation, strategic operating partner commissions, personnel expenses, and sales and general expenses, our profitability may not improve or may decrease. This could adversely impact our business, results of operation,operations, financial condition, and the trading price of our common stock.

Economic recessionsrecessions, global unrest, and other factors that reduce freight volumes could have a material adverse impact on our business.

The transportation industry historically has experienced cyclical fluctuations in financial results due to economic recessions, downturns in business cycles of our customers, interest rate fluctuations, inflation pressures, geopolitical events, and other economic factors beyond our control. Deterioration in the economic environment subjects our business to various risks that may have a material impact on our operating results and cause us to not reach our long-term growth goals, and which may include the following:

Carriers can be expected to charge higher prices if market conditions warrant, including increasedas costsa result of fuel,increased fuel costs, labor shortages, increasedand longer shipping times duecaused toby supply chain disruptions. Our adjusted gross profit and income from operations may decrease if we are unable to increase our pricing to our customers. Increased demand for truckload services and pending changes in regulations may reduce available capacity and increase carrier pricing.

Our failure to comply with, or the costs of complying with, government regulation could negatively affect our results of operation.operations.

We use both internally developed and purchased technology in conducting our business. Whether internally developed or purchased, it is possible that the useruse of these technologies could be claimed to infringe upon or violate the intellectual property rights of third-parties. In the event that a claim is made against us by a third-party for the infringement of intellectual property rights, any settlement or adverse judgment against us either in the form of increased costs of licensing or a cease and desist order in using the technology could have an adverse effect on us and our results of operations.

We intendseek to grow rapidlyour and substantially,operations, including by expanding our internal resources, by making acquisitions and entering into new markets. We may experience difficulties and higher-than-expected expenses in executing this strategy as a result of unfamiliarity with new markets and change in revenue and business models.

The Revolving Credit Facility includes a $75$100 million accordion feature to support future acquisition opportunities. For general borrowings under the Revolving Credit Facility, the Company is subject to the maximum consolidated net leverage ratio of 3.00 and minimum consolidated interest coverage ratio of 3.00. Additional minimum availability requirements and financial covenants apply in the event the Company seeks to use advances under the Revolving Credit Facility to pursue acquisitions or repurchase its common stock.

Our compliance with the financial covenants of our creditRevolving facilityCredit Facility is particularly important given the materiality of such facility to our day-to-day operations and overall acquisition strategy. If we fail to comply with these covenants and are unable to secure a waiver or other relief, our financial condition would be materially weakened and our ability to fund day-to-day operations would be materially and adversely affected. Accordingly, we employ EBITDA and adjusted EBITDA as management tools to measure our historical financial performance and as a benchmark for future financial flexibility.

Although asAs of June 30, 2025,2026, we only had $20.0$25.0 million of indebtedness outstanding under our Revolving Credit Facility,Facility. In the future, we may in the future incur substantial indebtedness,indebtedness if needed to support our operations, to support our growth strategy, or for whatever other purpose is deemed necessary or appropriate at the time. If incurred, substantial indebtedness could have adverse consequences, such as:

wars, strikes, civil unrest, acts of terrorism, and other conflicts, such as the conflict that has led to the imposition of economic sanctions by the United States and the European Union (“EU”) against Russia;Russia, and more recently, the global unrest stemming from conflicts in the Middle East.

We generate a significant portion of revenues from our international operations, including a substantial amount in Canada. For the fiscal years ended June 30, 20252026 and 2024,2025, international services accounted for 45%46% and 40%45% of our adjusted gross profit, respectively. Revenue from our international operations may increase in recognition of our acquisition of a controlling interest in a Mexican logistics business effective September 1, 2025. Our international operations are sensitive to currency exchange risks. We have currency exposure arising from both sales and purchases denominated in foreign currencies, as well as intercompany transactions. Significant changes in exchange rates between foreign currencies in which we transact business and the U.S. dollar may adversely affect our results of operations and financial condition. Historically,Currently, we have not entered into any foreign currency hedging activities,arrangements, and, to the extent that we continue not to do so in the future,so, we may be vulnerable to the effects of currency exchange rate fluctuations.

The imposition of furthernew or increased tariffs by the U.S. and retaliatory trade measures taken by other countries in response to tariffs imposed by the U.S.response, could causereduce freight volumesvolumes, todisrupt declineestablished furthertrade lanes, and/or increase costs for greaterour lengths of time,customers, which could adversely affect our results of operations. Since early 2025, U.S. trade policy has been subject to frequent and substantial change. As a material portion of our volumes derives from the movement of goods into and out of the United States, these trends, if they continue for more than the short-term, may have a material adverse effect on our business and results of operations. The impact of these trade measures on our business operations and financial results remains uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, and the amount, scope, or nature of such trade measures, and our ability to execute strategies to mitigate the negative impacts.

We previously identified material weaknesses in our internal control over financial reporting which have been remediated, and ifIf we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. For example, in the course of preparing our financial statements for fiscal 2021, fiscal 2022, fiscal 2023, and fiscal 2024, we identified a material weakness in our internal control over financial reporting regarding the lack of effective internal control over the recording and processing of revenue.revenue which material weakness was not remediated until our financial statements for the year ended June 30, 2025. To address this material weakness, we made changes to our internal control framework and controls, as set forth in further detail in Part II, Item 9A “Controls and Procedures” and remediated this material weakness.

The motor carriers and other transportation providers we contract with are subject to increasingly restrictive environmental regulations, including those targeting greenhouse gas emissions and climateclimate-related change,regulations whichthat may increase their operating costs and could directly or indirectly have a material adverse effect on our business.

We are permitted to make additional acquisitions without the consent of the lenders only if certain conditions are satisfied. These conditions include the following: (i) no default shall have occurred or would result from such acquisition, (ii) the property acquired is used or useful in the same or a similar line of business, (iii) in the case of an acquisition of the equity interests, the board of directors of the target business shall have duly approved such Acquisition, (iv) we shall be in compliance with the financial covenants after giving effect to such acquisition and the consolidated net leverage ratio shall be less than 3.25 to 1.00 for acquisitions valued above $25 million and 2.75 to 1.00 for any other acquisitions, (v) the representations and warranties made by us in each loan document shall be true and correct, (vi) if such transaction involves the purchase of an interest in a partnership between us as a general partner and entities unaffiliated with the borrower as the other partners, such transaction shall be effected by having such equity interest acquired by a corporate holding company directly or indirectly wholly-owned by the Company newly formed for the sole purpose of effecting such transaction, and (vii) immediately after giving effect to such acquisition, there shall be at least $25 million of availability under the Revolving Credit Facility.

Under applicable SEC rules, our Founder, Chairman and Chief Executive Officer, Bohn H. Crain, beneficially owns approximately 20% of our outstanding common stock as of June 30, 2025.2026. Accordingly, Mr. Crain can exert substantial influence over our management and affairs and matters requiring stockholder approval, including the election of directors and the approval of significant corporate transactions, such as mergers, consolidations or the sale of substantially all of our assets. Consequently, this concentration of ownership may have the effect of delaying or preventing a change of control, including a merger, consolidation, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change of control would benefit our other stockholders. Further, this concentration of share ownership may adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in companies with concentrated stockholders.

The following discussion and analysis of our financial condition and resultresults of operations should be read in conjunction with the consolidated financial statements and the related notes and other information included elsewhere in this report.

WeRadiant operateLogistics, asInc., and its consolidated subsidiaries (the “Company,” “we” or “us”), is a leading third-party logistics company, providing technology-enabled global transportation and value-added logistics services primarily in the United StatesStates, Canada, and Canada.Mexico. We service a large, broad, and diversified account base consisting of consumer goods, food and beverage, electronics and high-tech, aviation and automotive, military and government, and manufacturing and retail customers, which is supported by an extensive network of operating locations across North AmericaAmerica, as well as an integrated international service partner network located in other key markets around the globe.world. The Company provides these services through a multi-brand network, which includes over 100 operating locations. Included in these operating locations are a number of independent agents, who are also referred to as “strategic operating partners,” that operate exclusively on the Company's behalf, and approximately 30 Company-owned locations. As the operator of a third-party logistics business, the Company has access to a vast carrierbroad network of asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines in its carrier network.lines. We believe shippers value our services because we are able to objectively arrange the most efficient and cost-effective means, type and provider of transportation service without undue influence caused by the ownership of transportation assets. In addition, our minimal investment in physical assets affords us the opportunity for a higher return on invested capital and generally stronger net cash flows than our asset-based competitors.

Through our operating locations across North America, we offer domestic and international air and ocean freight forwarding and freight brokerage services, including air, ocean, truckload, LTL,less than truckload ("LTL"), and intermodal, which is the movement of freight in trailers or containers by combination of truck and rail. Our primary business operations involve arranging shipments, on behalf of our customers, of materials, products, equipment and other goods that are generally larger than shipments handled by integrated carriers of primarily small parcels, such as FedEx, DHL and UPS. Our services include arranging and monitoring all aspects of material flow activity utilizing advanced information technology systems. We also provide other value-added logistics services, including MM&D,materials CHBmanagement and distribution ("MM&D"), customs house brokerage ("CHB"), global trade management ("GTM"), solutionsand related technology services to complement our core transportation service offering.

The Company expects to grow its business organically and by completing acquisitions of other companies with complementary geographical and logistics service offerings. The Company’s organic growth strategy will continue to focus on strengthening existing and expanding new customer relationships leveraging the benefit of the Company’s technology platform, while continuing its efforts on the organic build-out of the Company’s network of strategic operating partner locations. In addition, as the Company continues to grow and scale its business, the Company believes that it is creating density in its trade lanes, which createsenhances opportunitiesour for the Companyability to more efficiently source and manage its transportation capacity.

In addition to its focus on organic growth, the Company willplans to continue to search for acquisition candidates that bring critical mass from a geographic and purchasing power standpoint, along with providing complementary service offerings to the current platform. As the Company continues to grow and scale its business, it also remains focused on leveraging its back-office infrastructure and technology systems to drive productivity improvement across the organization.

Our transportation revenue represents the total dollar value of services we sell to our customers. Our cost of transportation includes direct costs of transportation, including motor carrier, air, ocean, and rail services. Our adjusted gross profit, a non-GAAP financial measure, is gross revenue less the direct cost of transportation and other services (excluding depreciation and amortization, which are reported separately), and is theused primaryas an indicator of our ability to source, add value, and resell services provided by third-parties, and is considered by management to be a key performance measure. Adjusted gross profit percentage is adjusted gross profit as a percentage of our total revenue. In addition, management believes measuring its operating costs as a function of adjusted gross profit provides a useful metric, as our ability to control costs as a function of adjusted gross profit directly impacts operating results. We believe that these metrics provide investors with meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

EBITDA is a non-GAAP financial measure of income and does not include the effects of interest, income taxes, and the “non-cash” effects of depreciation and amortization on long-term assets. Companies have some discretion as to which elements of depreciation and amortization are excluded in the EBITDA calculation. We exclude all depreciation charges related to property, technology, and equipment and all amortization charges (including amortization of leasehold improvements). We then further adjust EBITDA to exclude share-based compensation, costs unrelated to our core operations (primarily acquisition and litigation costs), allocation of earnings attributable to noncontrolling interests in subsidiaries, and other non-cash charges. While management considers EBITDA and adjusted EBITDA useful in analyzing our results, it is not intended to replace any presentation included in our consolidated financial statements. The Company’s financial covenants with its lenders define an adjusted EBITDA as a key component of its covenant calculations. The Company’s ability to grow adjusted EBITDA is closely monitored by management as it’s directly tied to financial borrowing capacity and also is a frequent point of discussion with its investors as well as the Company’s earnings calls.

As a non-asset-based carrier, we do not generally own transportation assets. We do, however, own certain trailers and refrigerated trailers that we use in our business. We generate the majority of our transportation revenues by purchasing transportation services from direct (asset-based) carriers and reselling those services to our customers. We recognize revenue and the corresponding related costs in a manner that depicts the transfer of promised goods or services to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods and services. Our performance obligation is satisfied over time and recognized upon the transfer of control of the services over the requisite transit period as customers’ goods move from point of origin to point of destination. We determine the period to recognize revenue and the corresponding related costs based upon the actual departure date and delivery date, if available, or estimated delivery date if delivery has not occurred as of the reporting date. Certain shipments may require us to estimate revenue, in which case the average revenue per shipment, per mode of transportation is used. Determination of the estimated revenue, transit period and the percentage of completion of the shipment as of the reporting date requires management to make judgments that affect the timing and amount of revenue recognition. Macroeconomic conditions impacting the supply chain such as portcarrier delays, thecapacity, labor force,availability, as well asand inflationary cost pressures can impact the actual results compared to our estimates. Revenue from CHB services is recognized upon completion of the service.

Transportation revenue was $854.4$882.8 million and $753.2$854.4 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. The increase of $101.2$28.4 million, or 13.4%,3.3%, is primarily attributable to incremental revenues generated from current and prior year acquisitions, partially offset by meaningful project charter revenues ofin $58.5the millionprior and additional incremental revenues generated from acquisitions of $57.7 million.year. Adjusted transportation gross profit was $211.4$214.6 million and $208.9$211.4 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Net transportation margins decreased slightly from 27.7%24.7% to 24.7%, primarily due to project charter revenues and increases in ocean revenues, which have lower gross profit margin characteristics than other service levels.24.3%.

Value-added services revenue was $48.3$51.6 million and $49.2$48.3 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. The increase is driven by higher volumes and incremental revenue from expanded warehouse operations primarily in our Canadian segment compared to the prior year. Adjusted value-added services gross profit was $28.0$31.4 million and $27.6$28.0 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Adjusted value-added services gross profit percentage increased from 56.1%58.0% to 58.0%.60.9%.

Operating partner commissions decreasedincreased $14.2$3.9 million, or 15.3%,5.0%, to $78.5$82.4 million for the fiscal year ended June 30, 2025.2026. The decreaseincrease in commissions is primarily due to aan reductionincrease of adjustedin gross profit generated from our strategic operating partners, andpartially offset by the conversions of strategic operating partners to Company-owned locations who earned commissions in the prior year. As a percentage of adjusted gross profit, operating partner commissions decreasedincreased 64073 basis points to 32.8%33.5% from 39.2%32.8% for the fiscal years ended June 30, 20252026 and 2024,2025, respectively, as a result of a higher percentage of gross margin generated from Company-owned locations.respectively.

Personnel costs increased $3.3$7.0 million, or 4.2%,8.6%, to $81.5$88.5 million for the fiscal year ended June 30, 2025.2026. The increase is primarily due to an increase in headcount from acquisitions,acquisitions offsetin bythe current and prior year, and the share-based compensation expense in the current period compared to a benefit in the period.prior year. As a percentage of adjusted gross profit, personnel costs increased 90193 basis points to 34.0%36.0% from 33.1%34.0% for the fiscal years ended June 30, 20252026 and 2024,2025, respectively.

Selling, general and administrative (“SG&A”) expenses increaseddecreased $3.8$0.2 million, or 9.7%,0.4%, to $42.5$42.3 million for the fiscal year ended June 30, 2025.2026. The increasedecrease is primarily due to increasedlower technology spending,spending facilitiesby costsconsolidating fromtransportation acquisitions,management travelsystems, costs, and $1.5$1.1 million of lease termination costs in the prior year due to relocating from an existing warehouse facility prior to the conclusion of the lease term to a new and larger facility to expand existing operations, and lower travel and entertainment costs, partially offset by loweran increase to bad debt expense, the allowance for credit losses, and professional service fees. As a percentage of adjusted gross profit, SG&A decreased 54 basis points to 17.2% from 17.7% for the fiscal years ended June 30, 2026 and 2025, respectively.

Depreciation and amortization costs increaseddecreased $0.3$4.1 million, or 1.6%,22.0%, to $18.4$14.3 million for the fiscal year ended June 30, 2025.2026. The decrease is primarily attributable to amortization of intangible assets from acquisitions that are now fully amortized, partially offset by amortization of intangibles from acquisitions that have occurred since the prior year. As a percentage of adjusted gross profit, depreciation and amortization remaineddecreased at185 basis points to 5.8% from 7.7% for boththe fiscal years ended June 30, 20252026 and 2024.2025.

Our future financial results may be impacted by amortization of intangible assets resulting from acquisitionsacquisitions, and gains or losses from changes in fair value of contingent consideration, which are difficult to predict.

Fiscal year ended June 30, 20252026 compared to fiscal year ended June 30, 20242025 Net cash provided by operating activities was $13.3$17.5 million and $17.3$13.3 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. The cash provided primarily consisted of net income adjusted for depreciation and amortization and changes in fair value of contingent consideration, accounts receivable, contract assets, prepaid expenses, accountsoperating partner commissions payable, income taxes, and accrued expenses and other liabilities. Cash flow from operating activities for the fiscal year ended June 30, 2026 increased by $4.2 million, compared with fiscal year 2025, primarily due to increased net income, offset by net changes in operating assets and liabilities.

Net cash used for investing activities was $33.5$8.9 million and $15.2$33.5 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Cash paid for acquisitions were $28.5$5.2 million and $6.8$28.5 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Cash paid for purchases of property, technology, and equipment were $5.1$4.3 million and $8.6$5.1 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Proceeds from sale of property, technology, and equipment were $0.5 million and $0.2 million for the fiscal years ended June 30, 2026 and 2025, respectively.

Net cash used for financing activities was $5.7 million and net cash provided by financing activities was $18.2 million and net cash used for financing activities was $10.2 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Net proceeds from the Revolving Credit Facility were $20.0 million for the fiscal year ended June 30, 2025. There were no proceeds or repayments for the year ended June 30, 2024. Repayments of notes payable and finance lease liabilities were $0.9$5.0 million and $4.8$20.0 million for the fiscal years ended June 30, 20252026 and 2024,2025. respectively. RepurchasesRepayments of commonfinance stocklease liabilities were $0.8$0.3 million and $4.1$0.9 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. PaymentsRepurchases of contingentcommon considerationstock were $0.5$3.5 million and $0.3$0.8 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. DistributionsPayments toof noncontrollingcontingent interestconsideration were $0.2$6.8 million and $0.6$0.5 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Distributions to noncontrolling interest were less than $0.1 million and $0.2 million for the fiscal years ended June 30, 2026 and 2025, respectively. Proceeds from exercises of stock options were $1.2$0.3 million and less than $0.1$1.2 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively. Payments of employee tax withholdings related to restricted stock units and stock options were $0.6$0.5 million and $0.4$0.6 million for the fiscal years ended June 30, 20252026 and 2024,2025, respectively.

The Company entered into a $200 million syndicated, revolving credit facility (the “Revolving Credit Facility”) pursuant to aan Amended and Restated Credit Agreement as of August 7, 2026 that amended and restated the Credit Agreement dated as of August 5, 2022, and amended as of September 27, 2023.amended. The Revolving Credit Facility is segregated into two tranches, a $150 million tranche that may be loaneddrawn in U.S. DollarsDollars, andwith a $50 million tranchesublimit thatavailable mayfor be loanedborrowings in either U.S.Canadian Dollars (or Canadianother Dollars.approved alternative currencies), a $25 million letter of credit sublimit, and a $25 million swingline loan sublimit, each of which is part of, and not in addition to, the overall Revolving Credit Facility. The Revolving Credit Facility includes a $75$100 million accordion feature to support future acquisition opportunities. The Revolving Credit Facility was entered into with Bank of America, N.A. and BMO Capital Markets Corp. as joint book runners and joint lead arrangers, Bank of America, N.A. as Administrative Agent, Swingline LenderLender, and Letter of Credit Issuer, Bank of Montreal asand syndicationPNC agent, KeyBankBank, National AssociationAssociation, as Co-syndication agents, BOFA Securities, Inc., Bank of Montreal and MUFG UnionPNC Bank, N.A.National Association, as co-documentationjoint agentslead arrangers and joint bookrunners, and Bank of America, N.A., Bank of Montreal, PNC Bank, National Association, and KeyBank National Association, MUFG Union Bank, N.A. and Washington Federal Bank, National Association as lenders (such named lenders are collectively referred to herein as “Lenders”).

The Revolving Credit Facility hasmatures aon termAugust of7, five years2031 and is collateralized by a first-priority security interest in thesubstantially accountsall receivablepersonal and other assetsproperty of the Company and ourits subsidiaries, including, withoutaccounts limitation,receivable all ofand the capital stock of ourthe Company’s U.S. and Canadian subsidiaries. Borrowings in U.S. Dollars accrue interest (at the Company’s option) at a) the Lenders’ base rate plus 0.50%0.475% to 1.50%1.225%; b) Term Secured Overnight Financing Rate (“SOFR”) plus 1.40%1.375% to 2.40%2.125%; or c) Term SOFR Daily Floating Rate plus 1.40%1.375% to 2.40%.2.125%. Borrowings in Canadian Dollars accrue interest (at the Company’s option) at a) Term Canadian Overnight Repo Rate Average (“CORRA”) plus 0.29547% to 0.32138% depending on the term, plus 1.40% to 2.40%; or b) Daily Simple CORRA plus 0.29547% plus 1.40% to 2.40%. Rates are adjusted based on the Company’s consolidated net leverage ratio. The Company’s U.S. and Canadian subsidiaries are guarantors of the Revolving Credit Facility.

Global economic and trade conditions remain uncertain,highly dueuncertain. to inflationaryInflationary pressures, tariff and trade policy uncertainty, and geopolitical tensions,tensions – including the ongoing conflict in the Middle East and shiftsits effects on global energy markets, freight capacity, and shipping costs – continue to create volatility in consumershipment demand,volumes, pricing dynamics, and operating margins. Elevated fuel prices, airspace restrictions, and conflict-related rerouting have added cost pressures across air and ocean freight markets, which may adversely affect shipment volumes, pricing dynamics and operating margins, and our overall business and financial results.

Three months ended DecemberMarch 31, 20252026 and 20242025 (unaudited)

The following table summarizes revenues, cost of transportation and other services, and adjusted gross profit by reportable operating segments for the three months ended DecemberMarch 31, 20252026 and 20242025:

Transportation revenue was $217.8$202.4 million for each of the three months ended March 31, 2026 and 2025, respectively. Adjusted transportation gross profit was $49.6 million and $252.1$51.4 million for the three months ended DecemberMarch 31, 20252026 and 2024, respectively. The decrease of $34.3 million, or 13.6% is primarily attributable to meaningful project charter revenues in the prior year period, offset by incremental revenues generated from current and prior year acquisitions. Adjusted transportation gross profit was $54.2 million and $56.4 million for the three months ended December 31, 2025 and 2024,2025, respectively. Net transportation margins increaseddecreased from 22.4%25.4% to 24.9%,24.5%, primarily due to project charter revenueschange in theproduct prior year period, which have lower gross profit margin characteristics than other service levels.mix.

Value-added services revenue was $14.3$11.7 million and $12.5$11.6 million for the three months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. The increase is driven by higher volumes and incremental revenue from expanded warehouse operations in Canada. Adjusted value-added services gross profit was $9.2$6.7 million for the three months ended DecemberMarch 31, 2025,2026, compared to $6.9$6.8 million for the comparable prior year period. Adjusted value-added services gross profit percentage increaseddecreased from 55.2%58.1% to 64.7%.57.2%.

The following table provides a reconciliation for the three months ended DecemberMarch 31, 20252026 and 20242025 of adjusted gross profit to gross profit, the most directly comparable GAAP measure:

The following table compares condensed consolidated statements of comprehensive income data by reportable operating segments for the three months ended DecemberMarch 31, 20252026 and 20242025:

Operating partner commissions increaseddecreased $1.0$0.2 million, or 5.3%,0.6%, to $20.3$19.1 million for the three months ended DecemberMarch 31, 2025. The increase is primarily due to an increase of adjusted gross profit generated from our strategic operating partners, partially offset by the conversions of strategic operating partners to Company-owned locations who earned commissions in the prior year.2026. As a percentage of adjusted gross profit, operating partner commissions increased 15388 basis points to 32.0%34.0% from 30.5%33.1% for the three months ended DecemberMarch 31, 20252026 and 2024,2025, respectively, as a result of a higher mix of gross margin generated from strategic operating partners compared to Company-owned locations due to the project charter revenues in the prior year period.locations.

Personnel costs increased $3.0$1.0 million, or 15.5%,5.0%, to $22.6$21.5 million for the three months ended DecemberMarch 31, 2025.2026. The increase is primarily due to an increase in headcount from recent acquisitions and the share-based compensation expense in the period compared to a benefit in the prior year period, offset by decreases in sales commissions and bonus expenses.acquisitions. As a percentage of adjusted gross profit, personnel costs increased 471297 basis points to 35.6%38.1% from 30.9%35.2% for the three months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

Selling, general and administrative (“SG&A”) expenses decreased $2.4$0.6 million, or 19.9%,7.0%, to $9.6$9.3 million for the three months ended DecemberMarch 31, 2025.2026. The decrease is primarily due to $1.1 million of lease termination costs in the prior year period due to relocating from an existing warehouse facility prior to the conclusion of the lease term to a new and larger facility to expand existing operations, decreased technology spending,spending andby aconsolidating decreasetransportation management systems, partially offset by an increase in theprofessional allowanceservice for credit losses.fees. As a percentage of adjusted gross profit, SG&A decreased 38167 basis points to 15.1%16.4% from 19.0%17.1% for the three months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

Depreciation and amortization costs decreased $1.4$1.3 million, or 29.2%,26.8%, to $3.6 million for the three months ended DecemberMarch 31, 2025.2026. The decrease is primarily attributable to amortization of intangible assets from acquisitions that are now fully amortized, partially offset by amortization of intangible assets from acquisitions that have occurred since the prior year period. As a percentage of adjusted gross profit, depreciation and amortization costs decreased 234207 basis points to 5.6%6.4% from 8.0%8.5% for the three months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

Our decreaseincrease in net income is driven by increasedthe personnelgain costs,in offsetfair byvalue decreasesof tocontingent SG&A,consideration and decreased depreciation and amortization, partially offset by the decrease in adjusted gross profit and increased income tax expense.

The following table provides a reconciliation for the three months ended DecemberMarch 31, 20252026 and 20242025 of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure:

SixNine months ended DecemberMarch 31, 20252026 and 20242025 (unaudited)

The following table summarizes revenues, cost of transportation and other services, and adjusted gross profit by reportable operating segments for the sixnine months ended DecemberMarch 31, 20252026 and 20242025:

Transportation revenue was $430.9$633.3 million and $443.9$646.3 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. The decrease of $13.0 million, or 2.9%,2.0%, is primarily attributable to meaningful project charter revenues in the prior year period, offset by incremental revenues generated from current and prior year acquisitions. Adjusted transportation gross profit was $105.2$154.8 million and $107.2$158.6 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Net transportation margins increaseddecreased from 24.1%24.5% to 24.4%, primarily due to project charter revenues in the prior year period, which have lower gross profit margin characteristics than other service levels.24.4%.

Value-added services revenue was $27.9$39.6 million and $24.2$35.8 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. The increase is driven by higher volumes and incremental revenue from expanded warehouse operations primarily in our Canadian segment compared to the prior year period. Adjusted value-added services gross profit was $17.8$24.5 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to $13.7$20.4 million for the comparable prior year period. Adjusted value-added services gross profit percentage increased from 56.4%57.0% to 63.6%.61.7%.

The following table provides a reconciliation for the sixnine months ended DecemberMarch 31, 20252026 and 20242025 of adjusted gross profit to gross profit, the most directly comparable GAAP measure:

The following table compares condensed consolidated statements of comprehensive income data by reportable operating segments for the sixnine months ended DecemberMarch 31, 20252026 and 20242025:

Operating partner commissions increased $2.2$2.1 million, or 5.8%,3.6%, to $40.3$59.4 million for the sixnine months ended DecemberMarch 31, 2025.2026. The increase in commissions is primarily due to ana increasechange of adjustedin gross profit product mix generated from our strategic operating partners, partially offset by the conversions of strategic operating partners to Company-owned locations who earned commissions in the comparable prior year period. As a percentage of adjusted gross profit, operating partner commissions increased 127113 basis points to 32.8%33.2% from 31.5%32.0% for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively, as a result of a higher mix of adjusted gross profit generated from strategic operating partners compared to Company-owned locations due to the project charter revenues in the prior year period.

Personnel costs increased $5.0$6.0 million, or 12.7%,10.1%, to $44.2$65.6 million for the sixnine months ended DecemberMarch 31, 2025.2026. The increase is primarily due to an increase in headcount from acquisitions in the current and prior year and the share-based compensation expense in the current period compared to a benefit in the prior year period, offset by decreases in sales commissions and bonus expenses.period. As a percentage of adjusted gross profit, personnel costs increased 351331 basis points to 35.9%36.6% from 32.4%33.3% for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

SG&A expenses decreased $0.6$1.4 million, or 2.9%,4.1%, to $21.7$30.9 million for the sixnine months ended DecemberMarch 31, 2025.2026. The decrease is primarily due to $1.1 million of lease termination costs in the prior year period due to relocating from an existing warehouse facility prior to the conclusion of the lease term to a new and larger facility to expand existing operations, lower traveltechnology andspending entertainment,by consolidating transportation management systems, and lower professionaltravel serviceand fees,entertainment costs, partially offset by an increase to the allowance for credit losses and facilitiesprofessional costsservice from acquisitions.fees. As a percentage of adjusted gross profit, SG&A decreased 8376 basis points to 17.6%17.3% from 18.5%18.0% for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

Depreciation and amortization costs decreased $2.7$4.1 million, or 27.9%,27.6%, to $7.1$10.7 million for the sixnine months ended DecemberMarch 31, 2025.2026. The decrease is primarily attributable to amortization of intangible assets from acquisitions that are now fully amortized, partially offset by amortization of intangibles from acquisitions that have occurred since the prior year period. As a percentage of adjusted gross profit, depreciation and amortization costs decreased 237228 basis points to 5.8%6.0% from 8.1%8.3% for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

Our decrease in net income is driven principally by increased operating partner commissions and personnel costs, partially offset by a gain in fair value of contingent consideration and decreases to depreciation and amortization and income tax expense compared to the comparable prior year period.

The following table provides a reconciliation for the sixnine months ended DecemberMarch 31, 20252026 and 20242025 of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure:

Generally, our primary sources of liquidity are cash generated from operating activities and borrowings under our Revolving Credit Facility, as described below. These sources also fund a portion of our capital expenditures and contractual contingent consideration obligations. Our level of cash and financing capabilities along with cash flows from operations have historically been sufficient to meet our operating and capital needs. As of DecemberMarch 31, 2025,2026, we have $31.9$39.7 million in unrestricted cash and cash equivalents on hand available for working capital and general corporate purposes.

Net cash provided by operating activities was $14.8$29.4 million and $15.9$10.2 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. The cash provided primarily consisted of net income adjusted for depreciation and amortization and changes in fair value of contingent consideration, accounts receivable, prepaid expenses, accounts payable, operating partner commissions payable, and accrued expenses and other liabilities. Cash flow from operating activities for the sixnine months ended DecemberMarch 31, 20252026 decreasedincreased by $1.1$19.2 million, compared with the same period in fiscal year 2025, primarily due to decreased net income, offset by net changes in operating assets and liabilities.

Net cash used for investing activities was $6.9$8.1 million and $19.4$29.8 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Cash paid for acquisitions were $5.2 million and $15.9$25.7 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Cash paid for purchases of property, technology, and equipment were $2.2$3.5 million and $3.6$4.2 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Proceeds from sale of property, technology, and equipment were $0.5 million and $0.1 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

Net cash used for financing activities was $4.4 million and net cash provided by financing activities was $1.1 million and net cash used for financing activities was $1.4$13.9 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Net proceeds from the Revolving Credit Facility were $10.0$5.0 million and $0.0$15.0 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Repayments of notes payable and finance lease liabilities were $0.1$0.2 million and $0.4$0.6 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Repurchases of common stock were $3.5 million and $0.7 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Distributions to noncontrolling interest were less than $0.1 million and $0.2 million for each of the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Proceeds from exercise of stock options were $0.3 million and $0.4$1.2 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. Payments of employee tax withholdings related to restricted stock units and stock options were $0.5 million and $0.6 million for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.

As of DecemberMarch 31, 2025,2026, borrowings outstanding on the Revolving Credit Facility were $30.0$25.0 million. The Company was in compliance with its covenants.