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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Janel Corporation (PK) | USOTC:JANL | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 43.73 | 32.03 | 175.00 | 0.00 | 21:18:57 |
Nevada
|
86-1005291
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
303 Merrick Road - Suite 400
|
||
Lynbrook, New York
|
11563
|
|
(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
|
|||
Item 1.
|
Financial Statements:
|
||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
Item 2.
|
25
|
||
Item 4.
|
35
|
||
Part II - Other Information
|
|||
Item 1.
|
36
|
||
Item 1A.
|
36
|
||
Item 2.
|
36
|
||
Item 6.
|
37
|
||
38
|
ITEM 1. |
FINANCIAL STATEMENTS
|
December 31,
2018
(unaudited)
|
September 30,
2018
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash
|
$
|
721
|
$
|
585
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
25,905
|
19,726
|
||||||
Inventory
|
2,465
|
2,391
|
||||||
Prepaid expenses and other current assets
|
429
|
354
|
||||||
Total current assets
|
29,520
|
23,056
|
||||||
Property and Equipment, net
|
3,908
|
3,787
|
||||||
Other Assets:
|
||||||||
Intangible assets, net
|
13,194
|
12,347
|
||||||
Goodwill
|
12,061
|
11,458
|
||||||
Security deposits and other long term assets
|
267
|
263
|
||||||
Total other assets
|
25,522
|
24,068
|
||||||
Total assets
|
$
|
58,950
|
$
|
50,911
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Line of credit
|
$
|
11,338
|
$
|
9,730
|
||||
Accounts payable - trade
|
21,277
|
16,798
|
||||||
Accrued expenses and other current liabilities
|
2,693
|
1,748
|
||||||
Dividends payable
|
592
|
470
|
||||||
Current portion of long-term debt
|
1,199
|
897
|
||||||
Total current liabilities
|
37,099
|
29,643
|
||||||
Other Liabilities:
|
||||||||
Long-term debt
|
3,566
|
3,831
|
||||||
Subordinated promissory notes
|
658
|
344
|
||||||
Mandatorily redeemable non-controlling interest
|
681
|
681
|
||||||
Deferred income taxes
|
1,319
|
1,131
|
||||||
Other liabilities
|
283
|
254
|
||||||
Total other liabilities
|
6,507
|
6,241
|
||||||
Total liabilities
|
|
43,606
|
|
35,884
|
||||
Stockholders’ Equity:
|
||||||||
Preferred Stock, $0.001 par value; 100,000 shares authorized
|
||||||||
Series B 5,700 shares authorized and 1,271 shares issued and outstanding
|
-
|
-
|
||||||
Series C 20,000 shares authorized and 20,000 shares issued and outstanding at December 31, 2018 and September 30, 2018, liquidation value of $12,092 and $11,966 at December 31, 2018 and
September 30, 2018, respectively
|
-
|
-
|
||||||
Common stock, $0.001 par value; 4,500,000 shares authorized, 839,451 issued and 819,451 outstanding as of December 31, 2018 and 837,951 issued and 817,951 outstanding as of September 30, 2018
|
1
|
1
|
||||||
Paid-in capital
|
15,613
|
15,872
|
||||||
Treasury stock, at cost, 20,000 shares
|
(240
|
)
|
(240
|
)
|
||||
Accumulated earnings (deficit)
|
(30
|
)
|
(606
|
)
|
||||
Total stockholders’ equity
|
15,344
|
15,027
|
||||||
Total liabilities and stockholders’ equity
|
$
|
58,950
|
$
|
50,911
|
Three Months Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Revenue
|
$
|
22,327
|
$
|
14,780
|
||||
Forwarding expenses and cost of revenues
|
15,840
|
10,191
|
||||||
Gross profit
|
6,487
|
4,589
|
||||||
Cost and Expenses:
|
||||||||
Selling, general and administrative
|
5,389
|
4,098
|
||||||
Amortization of intangible assets
|
208
|
193
|
||||||
Total Costs and Expenses
|
5,597
|
4,291
|
||||||
Income From Operations
|
890
|
298
|
||||||
Other Items:
|
||||||||
Interest expense net of interest income
|
(162
|
)
|
(117
|
)
|
||||
Income Before Income Taxes
|
728
|
181
|
||||||
Income tax expense
|
(184
|
)
|
(1
|
)
|
||||
Net Income
|
544
|
180
|
||||||
Preferred stock dividends
|
(122
|
)
|
(106
|
)
|
||||
Gain on extinguishment of Preferred Stock Series C dividends
|
-
|
1,312
|
||||||
Net Income Available to Common Stockholders
|
$
|
422
|
$
|
1,386
|
||||
Net Income per share
|
||||||||
Basic
|
$
|
0.64
|
$
|
0.32
|
||||
Diluted
|
$
|
0.58
|
$
|
0.22
|
||||
Net income per share attributable to common stockholders:
|
||||||||
Basic
|
$
|
0.50
|
$
|
2.46
|
||||
Diluted
|
$
|
0.45
|
$
|
1.70
|
||||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
847,458
|
562,285
|
||||||
Diluted
|
936,314
|
817,074
|
PREFERRED STOCK
|
COMMON STOCK
|
PAID-IN CAPITAL
|
TREASURY STOCK
|
RETAINED EARNINGS
|
TOTAL EQUITY
|
|||||||||||||||||||||||||||||||
SHARES
|
$
|
SHARES
|
$
|
$
|
SHARES
|
$
|
$
|
$
|
||||||||||||||||||||||||||||
Balance - September 30, 2018
|
21,271
|
$
|
-
|
837,951
|
$
|
1
|
$
|
15,872
|
20,000
|
$
|
(240
|
)
|
$
|
(606
|
)
|
$
|
15,027
|
|||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
544
|
544
|
|||||||||||||||||||||||||||
Cumulative effect of change in accounting principle
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
32
|
32
|
|||||||||||||||||||||||||||
Dividends to preferred stockholders
|
-
|
-
|
-
|
-
|
(122
|
)
|
-
|
-
|
-
|
(122
|
)
|
|||||||||||||||||||||||||
Vested restricted stock unissued
|
-
|
-
|
-
|
-
|
(236
|
)
|
-
|
-
|
-
|
(236
|
)
|
|||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
-
|
-
|
94
|
-
|
-
|
-
|
94
|
|||||||||||||||||||||||||||
Stock option exercise
|
-
|
-
|
1,500
|
-
|
5
|
-
|
-
|
-
|
5
|
|||||||||||||||||||||||||||
Balance - December 31, 2018
|
21,271
|
$
|
-
|
839,451
|
$
|
1
|
$
|
15,613
|
20,000
|
$
|
(240
|
)
|
$
|
(30
|
)
|
$
|
15,344
|
PREFERRED STOCK
|
COMMON STOCK
|
PAID-IN CAPITAL
|
TREASURY STOCK
|
RETAINED EARNINGS
|
TOTAL EQUITY
|
|||||||||||||||||||||||||||||||
SHARES
|
$
|
SHARES
|
$
|
$
|
SHARES
|
$
|
$
|
$
|
||||||||||||||||||||||||||||
Balance - September 30, 2017
|
35,476
|
$
|
-
|
573,951
|
$
|
1
|
$
|
12,312
|
20,000
|
$
|
(240
|
)
|
$
|
(854
|
)
|
$
|
11,219
|
|||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
180
|
180
|
|||||||||||||||||||||||||||
Dividends to preferred stockholders
|
-
|
-
|
-
|
-
|
(106
|
)
|
-
|
-
|
-
|
(106
|
)
|
|||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
-
|
-
|
171
|
-
|
-
|
-
|
171
|
|||||||||||||||||||||||||||
Balance - December 31, 2017
|
35,476
|
$
|
-
|
573,951
|
$
|
1
|
$
|
12,377
|
20,000
|
$
|
(240
|
)
|
$
|
(674
|
)
|
$
|
11,464
|
Three Months Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net income
|
$
|
544
|
$
|
180
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for uncollectible accounts
|
94
|
34
|
||||||
Depreciation
|
76
|
25
|
||||||
Deferred income tax
|
220
|
(13
|
)
|
|||||
Amortization of intangible assets
|
208
|
193
|
||||||
Amortization of acquired inventory valuation
|
62
|
-
|
||||||
Amortization of loan costs
|
3
|
2
|
||||||
Stock based compensation
|
129
|
178
|
||||||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
(4,790
|
)
|
2,266
|
|||||
Inventory
|
(137
|
)
|
(8
|
)
|
||||
Prepaid expenses and sundry current assets
|
(61
|
)
|
(22
|
)
|
||||
Security deposits and other long term assets
|
(3
|
)
|
(20
|
)
|
||||
Accounts payable and accrued expenses
|
4,373
|
(2,126
|
)
|
|||||
Other liabilities
|
30
|
-
|
||||||
Net cash provided by operating activities
|
748
|
689
|
||||||
Cash Flows From Investing Activities:
|
||||||||
Acquisition of property and equipment, net of $13 in disposals
|
(182
|
)
|
(37
|
)
|
||||
Acquisitions
|
(1,935
|
)
|
-
|
|||||
Net cash used in investing activities
|
(2,117
|
)
|
(37
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Dividends Paid
|
-
|
(4
|
)
|
|||||
Repayments of term loan
|
(106
|
)
|
(500
|
)
|
||||
Proceeds from stock option exercise
|
5
|
-
|
||||||
Line of credit, proceeds (repayments), net
|
1,606
|
(465
|
)
|
|||||
Repayment of notes payable - related party
|
-
|
(262
|
)
|
|||||
Net cash provided by (used in) in financing activities
|
1,505
|
(1,231
|
)
|
|||||
Net increase (decrease) in cash
|
136
|
(579
|
)
|
|||||
Cash at beginning of the period
|
585
|
988
|
||||||
Cash at end of period
|
$
|
721
|
$
|
409
|
||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
169
|
$
|
115
|
||||
Income taxes
|
$
|
21
|
$
|
70
|
||||
Non-cash investing activities:
|
||||||||
Subordinated Promissory notes of Honor
|
$
|
456
|
$
|
-
|
||||
Contingent earn-out acquisition
|
$
|
50
|
$
|
-
|
||||
Non-cash financing activities:
|
||||||||
Dividends to preferred stockholders
|
$
|
122
|
$
|
102
|
||||
Vested restricted stock unissued
|
$
|
236
|
-
|
1. |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
Three Months Ended
December 31,
|
||||
Service Type
|
2018
|
|||
Ocean import and export
|
$
|
7,761
|
||
Freight forwarding
|
4,593
|
|||
Custom brokerage
|
2,289
|
|||
Air import and export
|
4,162
|
|||
Total
|
$
|
18,805
|
2. |
ACQUISITIONS
|
3. |
PROPERTY AND EQUIPMENT
|
|
December 31,
2018
|
September 30,
2018
|
Life
|
||||||
Building and Improvements
|
$
|
2,483
|
$
|
2,366
|
15-30 Years
|
||||
Land and Improvements
|
823
|
823
|
Indefinite
|
||||||
Furniture & Fixtures
|
225
|
211
|
3-7 Years
|
||||||
Computer Equipment
|
332
|
323
|
3-5 Years
|
||||||
Machinery & Equipment
|
809
|
764
|
3-15 Years
|
||||||
Leasehold Improvements
|
180
|
181
|
Shorter of Lease Term or Asset Life
|
||||||
|
4,852
|
4,668
|
|
||||||
Less: Accumulated Depreciation
|
(944
|
)
|
(881
|
)
|
|
||||
|
3,908
|
$
|
3,787
|
|
4.
|
INVENTORY
|
|
December 31,
2018
|
September 30,
2018
|
||||||
Finished Goods
|
$
|
1,208
|
$
|
1,241
|
||||
Work-in-Process
|
285
|
286
|
||||||
Raw Materials
|
999
|
888
|
||||||
Less - Reserve for Inventory Valuation
|
(27
|
)
|
(24
|
)
|
||||
Inventory Net
|
$
|
2,465
|
$
|
2,391
|
5.
|
INTANGIBLE ASSETS
|
December 31,
2018
|
September 30,
2018
|
Life
|
|||||||
Customer Relationships
|
$
|
13,032
|
$
|
12,052
|
15-20 Years
|
||||
Trademarks / Names
|
2,141
|
2,118
|
20 Years
|
||||||
Other
|
708
|
656
|
2-5 Years
|
||||||
15,881
|
14,826
|
|
|||||||
Less: Accumulated Amortization
|
(2,687
|
)
|
(2,479
|
)
|
|
||||
$
|
13,194
|
$
|
12,347
|
|
6.
|
NOTES PAYABLE - BANKS
|
(A)
|
Presidential Financial Corporation Facility
|
(B)
|
Santander Bank Facility
|
(C)
|
First Merchants Bank Credit Facility
|
(D)
|
First Northern Bank of Dixon
|
7.
|
SUBORDINATED PROMISSORY NOTES
|
8.
|
STOCKHOLDERS’ EQUITY
|
(A)
|
Preferred Stock
|
(B)
|
Equity Incentive Plan
|
9.
|
STOCK-BASED COMPENSATION
|
•
|
Risk-free interest rate - We determine the risk-free interest rate by using a weighted average assumption equivalent to the expected term based on the U.S. Treasury constant maturity rate.
|
•
|
Expected term - We estimate the expected term of our options on the average of the vesting date and term of the option.
|
•
|
Expected volatility - We estimate expected volatility using daily historical trading data of a peer group.
|
•
|
Dividend yield - We have never paid dividends on our common stock and currently have no plans to do so; therefore, no dividend yield is applied.
|
Three Months Ended
December 31,
2018
|
||||
Risk-free Interest Rate
|
3.04
|
%
|
||
Expected Option Term in Years
|
5.5-6.5
|
|||
Expected Volatility
|
95.4% - 98.8
|
%
|
||
Dividend Yield
|
0
|
%
|
||
Weighted Average Grant Date Fair Value
|
$
|
7.75
|
Number of
Options
|
Weighted Average
Exercise Price
|
Weighted Average
Remaining Contractual
Term (in years)
|
Aggregate Intrinsic
Value (in thousands)
|
|||||||||||||
Outstanding Balance at September 30, 2018
|
112,798
|
$
|
5.09
|
6.9
|
$
|
357.10
|
||||||||||
Granted
|
7,500
|
$
|
7.75
|
9.8
|
$
|
10.13
|
||||||||||
Exercised
|
(1,500
|
)
|
$
|
3.25
|
-
|
$
|
-
|
|||||||||
Outstanding Balance at December 31, 2018
|
118,798
|
$
|
5.28
|
6.8
|
$
|
454.06
|
||||||||||
Exercisable on December 31, 2018
|
91,502
|
$
|
4.76
|
6.3
|
$
|
396.66
|
Three Months Ended
December 31,
2018
|
||||
Risk-free Interest Rate
|
2.59% - 3.04
|
%
|
||
Expected Option Term in Years
|
8.0-9.0
|
|||
Expected Volatility
|
97.0% - 98.8
|
%
|
||
Dividend Yield
|
0
|
%
|
||
Weighted Average Grant Date Fair Value
|
$
|
4.13 - $8.04
|
Number of
Options
|
Weighted Average
Exercise Price
|
Weighted Average
Remaining Contractual
Term (in years)
|
Aggregate Intrinsic
Value (in thousands)
|
|||||||||||||
Outstanding Balance at September 30, 2018
|
51,053
|
$
|
7.58
|
8.8
|
$
|
31.84
|
||||||||||
Granted
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||
Outstanding Balance at December 31, 2018
|
51,053
|
$
|
7.58
|
8.6
|
$
|
77.78
|
||||||||||
Exercisable on December 31, 2018
|
19,036
|
$
|
7.21
|
8.5
|
$
|
35.96
|
Three Months Ended
December 31,
2018
|
||||
Risk-free Interest Rate
|
3.04
|
%
|
||
Expected Option Term in Years
|
5.5-6.5
|
|||
Expected Volatility
|
95.4% - 98.8
|
%
|
||
Dividend Yield
|
0
|
%
|
||
Weighted Average Grant Date Fair Value
|
$
|
12.13
|
Number of
Options
|
Weighted Average
Exercise Price
|
Weighted Average
Remaining Contractual
Term (in years)
|
Aggregate Intrinsic
Value (in thousands)
|
|||||||||||||
Outstanding Balance at September 30, 2018
|
25,321
|
$
|
7.97
|
7.9
|
$
|
105.36
|
||||||||||
Granted
|
6,812
|
$
|
12.13
|
9.8
|
$
|
-
|
||||||||||
Outstanding Balance at December 31, 2018
|
32,133
|
$
|
8.85
|
8.1
|
$
|
105.36
|
||||||||||
Exercisable on December 31, 2018
|
12,384
|
$
|
6.48
|
7.3
|
$
|
69.97
|
Restricted Stock
(in thousands)
|
Weighted Average
Grant Date Fair Value
|
|||||||
Unvested at September 30, 2018
|
10,000
|
$
|
8.01
|
|||||
Vested
|
(5,000
|
)
|
$
|
8.01
|
||||
Unvested at December 31, 2018
|
5,000
|
$
|
8.01
|
Restricted Stock
(in thousands)
|
Weighted Average
Grant Date Fair Value
|
|||||||
Unvested at September 30, 2018
|
30,000
|
$
|
8.03
|
|||||
Vested
|
(3,333
|
)
|
$
|
8.01
|
||||
Unvested at December 31, 2018
|
26,667
|
$
|
8.04
|
10.
|
INCOME PER COMMON SHARE
|
For the Three Months Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Income:
|
||||||||
Net income
|
$
|
544
|
$
|
180
|
||||
Gain on extinguishment of Preferred stock Series C dividends
|
-
|
1,312
|
||||||
Preferred stock dividends
|
(122
|
)
|
(106
|
)
|
||||
Net Income availible to common stockholders
|
$
|
422
|
$
|
1,386
|
||||
Common Shares:
|
||||||||
Basic - weighted average common shares
|
847,458
|
562,285
|
||||||
Effect of dilutive securities:
|
||||||||
Stock options
|
58,191
|
70,425
|
||||||
Restricted stock
|
17,955
|
8,383
|
||||||
Warrants
|
-
|
143,276
|
||||||
Convertible preferred stock
|
12,710
|
32,705
|
||||||
Diluted - weighted average common stock
|
936,314
|
817,074
|
||||||
Income per Common Share:
|
||||||||
Basic -
|
||||||||
Net income
|
$
|
0.64
|
$
|
0.32
|
||||
Gain on extinguishment of Preferred stock dividends Series C
|
-
|
2.33
|
||||||
Preferred stock dividends
|
(0.14
|
)
|
(0.19
|
)
|
||||
Net Income availible to common stockholders
|
$
|
0.50
|
$
|
2.46
|
||||
Diluted -
|
||||||||
Net income
|
$
|
0.58
|
$
|
0.22
|
||||
Gain on extinguishment of Preferred stock dividends Series C
|
-
|
1.61
|
||||||
Preferred stock dividends
|
(0.13
|
)
|
(0.13
|
)
|
||||
Net income availible to common stockholders
|
$
|
0.45
|
$
|
1.70
|
|
December 31,
|
|||||||
|
2018
|
2017
|
||||||
Employee Stock Options
|
118,798
|
124,923
|
||||||
Non-employee Stock Options
|
51,053
|
51,053
|
||||||
Employee Restricted Stocks
|
5,000
|
10,000
|
||||||
Non-employee Restricted Stock
|
26,667
|
41,666
|
||||||
Warrants
|
-
|
250,000
|
||||||
Convertible Preferred Stock
|
12,710
|
12,710
|
||||||
|
214,228
|
490,352
|
11.
|
INCOME TAXES
|
12.
|
BUSINESS SEGMENT INFORMATION
|
For the three months ended December 31, 2018
|
Consolidated
|
Global
Logistics
Services
|
Manufacturing
|
Life Sciences
|
Corporate
|
|||||||||||||||
Revenues
|
$
|
22,327
|
$
|
18,805
|
$
|
2,081
|
$
|
1,441
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
15,840
|
14,418
|
933
|
489
|
-
|
|||||||||||||||
Gross profit
|
6,487
|
4,387
|
1,148
|
952
|
-
|
|||||||||||||||
Selling, general and administrative
|
5,389
|
3,360
|
708
|
707
|
614
|
|||||||||||||||
Amortization of intangible assets
|
208
|
-
|
-
|
-
|
208
|
|||||||||||||||
Income from Operations
|
890
|
1,027
|
440
|
245
|
(822
|
)
|
||||||||||||||
Interest expense
|
162
|
98
|
40
|
27
|
(3
|
)
|
||||||||||||||
Identifiable assets
|
58,950
|
25,047
|
1,989
|
6,484
|
25,430
|
|||||||||||||||
Capital expenditures
|
182
|
14
|
41
|
127
|
-
|
For the three months ended December 31, 2017
|
Consolidated
|
Global
Logistics
Services
|
Manufacturing
|
Life Sciences
|
Corporate
|
|||||||||||||||
Revenues
|
$
|
14,780
|
$
|
12,855
|
$
|
1,925
|
$
|
-
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
10,191
|
9,463
|
728
|
-
|
-
|
|||||||||||||||
Gross profit
|
4,589
|
3,392
|
1,197
|
-
|
-
|
|||||||||||||||
Selling, general and administrative
|
4,098
|
2,756
|
771
|
-
|
571
|
|||||||||||||||
Amortization of intangible assets
|
193
|
-
|
-
|
-
|
193
|
|||||||||||||||
Income from operations
|
298
|
636
|
426
|
-
|
(764
|
)
|
||||||||||||||
Interest expense
|
117
|
67
|
50
|
-
|
-
|
|||||||||||||||
Identifiable assets
|
35,739
|
8,482
|
1,943
|
-
|
25,314
|
|||||||||||||||
Capital expenditures
|
37
|
-
|
37
|
-
|
-
|
13.
|
RISKS AND UNCERTAINTIES
|
(A)
|
Currency Risks
|
(B)
|
Concentration of Credit Risk
|
(C)
|
Legal Proceedings
|
14.
|
SUBSEQUENT EVENTS
|
|
• |
accounts receivable valuation;
|
|
• |
the useful lives of long-term assets;
|
|
• |
the accrual of costs related to ancillary services the Company provides;
|
|
• |
accrual of tax expense on an interim basis; and
|
|
• |
inventory valuation
|
Three Months Ended
December 31,
|
||||||||
(in thousands)
|
2018
|
2017
|
||||||
Operating income
|
$
|
890
|
$
|
298
|
||||
Amortization of intangible assets (1)
|
208
|
193
|
||||||
Stock-based compensation (2)
|
129
|
178
|
||||||
Amortization of acquired inventory valuation (3)
|
62
|
-
|
||||||
Adjusted operating income
|
$
|
1,289
|
$
|
669
|
|
(1) |
Amortization of intangible assets represents non-cash amortization expense or impairment expense, if any, attributable to acquisition-related intangible assets, including any portion that is allocated to
noncontrolling interests. Management believes that making this adjustment aids in comparing the Company’s operating results with other companies in our industry that have not engaged in acquisitions.
|
|
(2) |
The Company eliminates the impact of stock-based compensation because it does not consider such non-cash expenses to be indicative of the Company’s core operating performance. The exclusion of stock-based compensation expenses also
facilitates comparisons of the Company’s underlying operating performance on a period-to-period basis.
|
|
(3) |
The Company has excluded the impact of amortization of acquired inventory valuation in connection with acquisitions as such adjustments represent non-cash items, are not consistent in amount and frequency and
are significantly impacted by the timing and size of the Company’s acquisitions.
|
Three Months Ended
December 31,
|
||||||||
(in thousands)
|
2018
|
2017
|
||||||
Corporate expenses
|
$
|
452
|
$
|
383
|
||||
Amortization of intangible assets
|
208
|
193
|
||||||
Stock-based compensation
|
94
|
178
|
||||||
Merger and acquisition expenses
|
68
|
10
|
||||||
Total corporate expenses
|
$
|
822
|
$
|
764
|
Three Months Ended
December 31,
|
||||||||
(in thousands)
|
2018
|
2017
|
||||||
Revenue:
|
||||||||
Global Logistics Services
|
$
|
18,805
|
$
|
12,855
|
||||
Manufacturing
|
2,081
|
1,925
|
||||||
Life Sciences
|
1,441
|
-
|
||||||
Total Revenues
|
22,327
|
14,780
|
||||||
Gross Margin:
|
||||||||
Global Logistics Services
|
4,387
|
3,392
|
||||||
Manufacturing
|
1,148
|
1,197
|
||||||
Life Sciences
|
952
|
-
|
||||||
Total gross profit
|
6,487
|
4,589
|
||||||
Income From Operations:
|
||||||||
Global Logistics Services
|
1,027
|
636
|
||||||
Manufacturing
|
440
|
426
|
||||||
Life Sciences
|
245
|
-
|
||||||
Total income from operation by segment
|
1,712
|
1,062
|
||||||
Corporate administrative expense
|
(614
|
)
|
(571
|
)
|
||||
Amortization expense
|
(208
|
)
|
(193
|
)
|
||||
Interest expense
|
(162
|
)
|
(117
|
)
|
||||
Net income before taxes
|
728
|
181
|
||||||
Income taxes
|
(184
|
)
|
(1
|
)
|
||||
Net income
|
$
|
544
|
$
|
180
|
|
Three Months Ended
December 31,
|
|||||||
(in thousands)
|
2018
|
2017
|
||||||
Revenue
|
$
|
18,805
|
$
|
12,855
|
||||
Forwarding expense
|
14,418
|
9,463
|
||||||
Net Revenue
|
$
|
4,387
|
$
|
3,392
|
|
Three Months Ended
December 31,
|
|||||||
(in thousands)
|
2018
|
2017
|
||||||
Revenue
|
$
|
2,081
|
$
|
1,925
|
||||
Gross profit
|
$
|
1,148
|
$
|
1,197
|
||||
Gross profit margin
|
55
|
%
|
62
|
%
|
||||
Income from operations
|
$
|
440
|
$
|
426
|
(in thousands)
|
Three Months Ended
December 31,
2018
|
|||
Revenue
|
$
|
1,441
|
||
Gross profit
|
$
|
952
|
||
Gross profit margin
|
66
|
%
|
||
Income from operations
|
$
|
245
|
•
|
We did not maintain adequate controls over journal entry approval;
|
•
|
Management identified a number of deficiencies related over the design, implementation and effectiveness of certain information technology general controls, including segregation of duties, user access,
change management, data back-ups and hardware security, some of which have a direct impact on our financial reporting; and
|
•
|
We did not maintain adequate controls over inventory valuation as it relates to overhead costs.
|
Exhibit No.
|
|
Limited Waiver, Joinder and Second Amendment, dated November 20, 2018, to the Loan and Security Agreement, by and among Janel Group, Inc., The Janel Group of Georgia, Inc., Aves Labs, Inc., Honor Worldwide
Logistics LLC, HWL Brokerage LLC, Global Trading Resources, Inc., Janel Corporation and Santander Bank, N.A. (incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed November 26, 2018)
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (filed herewith)
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer (filed herewith)
|
|
Section 1350 Certification of Principal Executive Officer (filed herewith)
|
|
Section 1350 Certification of Principal Financial Officer (filed herewith)
|
|
101
|
Interactive data files providing financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2018 for the three months ended December 31, 2018
and 2017 in XBRL (Extensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of December 31, 2018 and September 30, 2018, (ii) Consolidated Statements of Operations for the three months
ended December 31, 2018 and 2017, (iii) Consolidated Statement of Changes in Stockholders’ Equity for the three months ended December 31, 2018 and 2017, (iv) Consolidated Statements of Cash Flows for the three months ended December 31, 2018
and 2017, and (v) Notes to Consolidated Financial Statements*
|
Dated: October 18, 2019
|
JANEL CORPORATION
|
Registrant
|
|
/s/ Dominique Schulte
|
|
Dominique Schulte
|
|
Chairman, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Dated: October 18, 2019
|
JANEL CORPORATION
|
Registrant
|
|
/s/ Vincent A. Verde
|
|
Vincent A. Verde
|
|
Principal Financial Officer, Treasurer and Secretary
|
1 Year Janel (PK) Chart |
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