Actuals vs. estimates
No consensus comparison available for this event.
Verdict
- No consensus estimate was available for the period. Revenue fell 2.4% to $185.8 million from $190.4 million, and the net loss widened 36.6% to $20.9 million from $15.3 million, or $(0.47) a share from $(0.37).
- The decline is a mix shift, not lost customers: transportation revenue dropped $18.4 million, or 14.5%, as customers arranged their own outbound shipping, while warehousing revenue rose $13.9 million, or 21.9%, on the Texas and Illinois ramps and higher-fee Temu and TikTok volumes. Active customers rose to 525 from 505.
- Gross margin turned positive at 0.2% from negative 1.6%, but the swing came from freight costs falling $18.2 million, or 16.1%, faster than revenue; temporary labor rose $13.1 million, or 75.1%, against a $1.1 million decline in salaries.
- The cost of empty warehouse space moved rather than disappeared: general and administrative expenses rose 49.7% to $22.0 million, with rental expense inside that line up $6.2 million, or 233.3%, on leased capacity that stayed underutilized.
- The one thing that matters: the first positive gross margin in two years came from customers taking shipping in-house, and nothing in the filing shows the warehousing revenue replacing it covering $110.6 million of lease liabilities against $6.5 million of cash.
Key metrics
| Metric | Reported | Prior year | Change |
|---|---|---|---|
| Total revenue | $185.8 million | $190.4 million | -2.4% |
| Transportation services revenue | 108,620,049 | 127,013,393 | -14.5% |
| Warehousing services revenue | 77,145,355 | 63,285,107 | +21.9% |
| Gross profit (loss) margin | 0.2% | -1.6% | — |
| Net loss | $20.9 million | $15.3 million | +36.6% |
| Cash and cash equivalents and restricted cash | $6.5 million | $13.6 million | — |
Guidance changes
No financial guidance change disclosed.
Quality of earnings
- The margin turn is mix, not operating leverage. Gross profit of $424,836 on $185.8 million of revenue came from freight costs down $18.2 million while temporary labor added $13.1 million, so the warehousing line now carries labor the resold-freight line never needed.
- The loss is cash, not accruals. Operating cash flow swung to $5.1 million used from $1.5 million provided as the net loss widened $5.6 million, non-cash add-backs fell to $9.3 million from $11.0 million, and the prior year's $1,563,409 income tax recovery did not repeat.
- Dilution funded the balance sheet, not earnings. The 3,192,145 shares issued in September 2025 at $1.29 and $1.19 settled $3.8 million of convertible notes and took shares outstanding to 45,443,079 from 42,250,934, while equity fell to $8.0 million from $25.1 million.
Gotchas & watch items
- The auditor flagged substantial doubt about going concern: $20.9 million net loss, $5.1 million of cash used in operations, negative working capital of $25.6 million, accumulated deficit of $12.5 million, and cash and restricted cash down to $6.5 million from $13.6 million.
- The lease book dwarfs liquidity: $141.7 million of minimum lease payments and $110.6 million of lease liabilities, with $36.0 million due in fiscal 2027 against $6.5 million of cash on hand.
- Internal control over financial reporting was not effective, and the material weakness in control documentation is unremediated because the third-party ICFR audit firm has not been engaged, attributed to funding constraints from operating at a loss.
- Receivables quality deteriorated behind the revenue line: the credit loss allowance more than doubled to $1,273,113 from $594,869 and credit loss expense rose 407.5% to $1.4 million, while the two largest customers still supply 21.8% and 14.4% of revenue.