Unique Logistics International Reports Financial Results for Fiscal Quarter ended November 30, 2022

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Unique Logistics International, Inc.

Jan 17, 2023, 17:00 ET

NEW YORK, Jan. 17, 2023 /PRNewswire/ -- Unique Logistics International, Inc. (OTCMKTS: UNQL) ("Unique" or the "Company"), a global logistics and freight forwarding company, today announced results for its second fiscal quarter ended November 30, 2022.

Financial Highlights

	For the Three Months Ended November 30		For the Six Months Ended November 30
	2022	2021	2022	2021


Revenue	$ 88.8	$ 405.4	$ 225.3	$ 595.2
Net Income	3.3	4.5	6.6	6.5
Adjusted EBITDA	$ 5.2	$ 8.9	$ 10.2	$ 12.3

	As of
	November 30, 2022	May 31, 2022

Total Assets	$ 93.5	$ 124.9
Total Stockholders' Equity	$ 12.4	$ 5.8

The current quarter and year to date reflect changes in market conditions in the post covid economy. The volume and price surge from the comparative period of 2021 has dissipated and the logistics market has returned to conditions more similar to 2019, prior to the covid pandemic.
While revenue declined in comparison with the boom experienced in the corresponding period in the prior year, the Company successfully increased its margins on the business as reflected in net income declining by 27% for the quarter (and increasing 2% year to date) in comparison with revenue declining by 78% for the quarter (and 62% year to date). In relation to Revenue our Net Income margin increased from 1% to 4% in the current quarter compared to the corresponding quarter in the prior year and our adjusted EBITDA margin from 2% to 6% in the same period.

CEO Sunandan Ray commented on the financial results, "Market activity in the current quarter and year to date reflects the normalization of logistics following the boom in 2021 when markets returned post-Covid. There is still some short term concern about excessive inventory level held by retailers. However, the consistent pace of consumer demand we are seeing will soon require increased shipping to meet demand. The decline in shipping costs and volumes compared with 2021 has restored relative stability to the logistics market in terms of capacity supply and demand and this has helped with increased margin in our business. We are seeing encouraging signs on the sales front with an increase in our total number of customers and the increased shipping volumes of our top 25 customers."

Business Outlook

Mr. Ray stated, "We continue to approach the remainder of the fiscal year optimistic about the Company's progress and growth prospects. We remain confident in our sales efforts as our customer count has grown, and management will continue implementing processes to increase profitability and EBITDA by building on the value additions in our service and operational efficiency. Lastly, we are now close to completing the acquisitions we planned."

About Unique Logistics International, Inc.

Unique Logistics International, Inc. (OTC Markets: UNQL) through its wholly owned operating subsidiaries, is a global logistics and freight forwarding company providing a range of international logistics services that enable its customers to outsource to the Company sections of their supply chain process. The services provided are seamlessly managed by its network of trained employees and integrated information systems. We enable our customers to share data regarding their international vendors and purchase orders with us, execute the flow of goods and information under their operating instructions, provide visibility to the flow of goods from factory to distribution center or store and when required, update their inventory records.

For more information on UNQL and its businesses, please visit www.unique-usa.com.

About Non-GAAP Financial Measures (Adjusted EBITDA)

We define adjusted EBITDA to be earnings before interest, taxes, depreciation and amortization and other non-recurring income or expenses.

Adjusted EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other companies. We present adjusted EBITDA because we believe that adjusted EBITDA is a useful supplement to net income from operations as an indicator of operating performance. For this reason, we believe adjusted EBITDA will also be useful to others, including our stockholders, as a valuable financial metric.

We believe that adjusted EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between net income from continuing operations and adjusted EBITDA has been provided in ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS as part of our form 10-Q. Adjusted EBITDA should not be considered as an alternative to income from operations or net income from operations as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity. In addition, adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. We do not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP. These non-GAAP measures should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.

Cautionary Note Regarding Forward-Looking Statements

This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

Although we believe that the expectations reflected in these forward-looking statements such as the growth in revenues, along with the statements under the heading Business Outlook are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, statements about our future financial performance, including our revenue, cash flows, costs of revenue and operating expenses; our anticipated growth; our predictions about our industry; the impact of the COVID-19 pandemic on our business and our ability to attract, retain and cross-sell to clients. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission ("SEC"), including in our Annual Report on Form 10-K for the fiscal year ended May 31, 2022. The forward-looking statements in this press release speak only as of the date on which the statements are made. We undertake no obligation to update, and expressly disclaim the obligation to update, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

UNIQUE LOGISTICS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(Unaudited)

	For the		For the		For the		For the
	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	30-Nov-22		30-Nov-21		30-Nov-22		30-Nov-21
Revenues:
Airfreight services	$	21,581,667	$	275,070,204	$	51,515,704	$	327,232,845
Ocean freight and ocean services		47,930,347		115,421,970		136,185,077		238,722,728
Contract logistics		975,711		1,211,056		1,744,425		1,933,720
Customs brokerage and other services		18,349,508		13,727,459		35,900,899		27,313,256
Total revenues		88,837,233		405,430,689		225,346,105		595,202,549

Costs and operating expenses:
Airfreight services		19,950,949		269,019,226		47,500,790		320,645,001
Ocean freight and ocean services		41,145,915		107,173,955		123,083,775		223,761,697
Contract logistics		318,089		679,426		630,981		1,069,826
Customs brokerage and other services		16,731,183		12,393,603		33,375,926		25,318,695
Salaries and related costs		3,675,597		2,817,938		6,959,979		5,569,318
Professional fees		411,421		184,459		1,174,725		478,326
Rent and occupancy		613,572		489,770		1,142,682		969,979
Selling and promotion		461,578		2,659,490		562,432		3,692,618
Depreciation and amortization		201,966		194,875		402,640		388,672
Other		336,814		1,154,945		669,761		1,423,067
Total costs and operating expenses		83,847,084		396,767,687		215,503,691		583,317,199

Income from operations		4,990,149		8,663,002		9,842,414		11,858,350

Other income (expenses)
Interest expense		(972,300)		(1,881,201)		(2,329,985)		(3,198,480)
Amortization of debt discount		-		(391,035)		-		(776,515)
Gain on forgiveness of promissory note		-		-		-		358,236
Change in fair value of derivative liabilities		125,708		-		744,656		-
Gain on extinguishment of convertible note		-		-		-		780,050
Total other income (expenses)		(846,592)		(2,272,236)		(1,585,329)		(2,836,709)

Net income before income taxes		4,143,557		6,390,766		8,257,085		9,048,641

Income tax expense		871,860		1,902,541		1,664,047		2,537,000

Net income	$	3,271,697	$	4,488,225	$	6,593,038	$	6,511,641

UNIQUE LOGISTICS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	30-Nov-22		31-May-22
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,244,044	$	1,422,393
Accounts receivable, net		51,348,532		74,746,036
Contract assets		13,804,866		30,970,581
Other prepaid expenses and current assets		2,260,969		1,404,021
Total current assets		68,658,411		108,543,031

Property and equipment, net		223,757		188,889

Other long-term assets:
Goodwill		4,463,129		4,463,129
Intangible assets, net		6,984,131		7,337,704
Operating lease right-of-use assets, net		10,579,787		2,408,098
Deferred tax asset, net		987,648		942,748
Deposits		1,596,926		1,028,336
Total other long-term assets		24,611,621		16,180,015
Total assets	$	93,493,789	$	124,911,935

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	30,955,523	$	49,028,862
Accrued expenses and other current liabilities		4,898,633		5,666,159
Accrued freight		1,195,946		9,240,650
Contract Liabilities		-		468,209
Revolving credit facility		20,691,815		38,141,451
Current portion of notes payable, net of discount		304,167		608,333
Current portion of long-term debt due to related parties		349,631		301,308
Current portion of operating lease liability		1,796,663		912,618
Total current liabilities		60,192,378		104,367,590

Other long-term liabilities		141,330		282,666
Long-term-debt due to related parties, net of current portion		150,655		397,968
Derivative liabilities		11,693,338		12,437,994
Operating lease liability, net of current portion		8,891,206		1,593,873
Total long-term liabilities		20,876,529		14,712,501

Total liabilities		81,068,907		119,080,091

Commitments and contingencies		-		-

Stockholders' Equity:
Preferred Stock, $0.001 par value: 5,000,000 shares authorized
Series A Convertible Preferred stock, $0.001 par value; 120,065 and 130,000, issued and outstanding as of November 30, 2022 and May 31, 2022, respectively. Liquidation preference $120 on November 30, 2022.		120		130
Series B Convertible Preferred stock, $0.001 par value; 820,800 shares issued and outstanding as of November 30, 2022 and May 31, 2022. Liquidation preference $821 on November 30, 2022.		821		821
Series C Convertible Preferred stock, $0.001 par value; 195 shares, issued and outstanding as of November 30, 2022 and May 31, 2022 Liquidation preference $30.1 million on November 30, 2022		-		-
Series D Convertible Preferred stock, $0.001 par value; 180 and 187, issued and outstanding as of November 30, 2022 and May 31, 2022, respectively. Liquidation preference $28.3 million on November 30, 2022		-		-
Preferred stock, value		-		-
Common stock $0.001 par value; 800,000,000 shares authorized.		799,142		687,197
799,141,770 and 687,196,478 common shares issued and outstanding as of November 30, 2022 and May 31, 2022, respectively		799,142		687,197

Additional paid-in capital		180,220		292,155
Retained earnings		11,444,579		4,851,541
Total Stockholders' Equity		12,424,882		5,831,844
Total Liabilities and Stockholders' Equity	$	93,493,789	$	124,911,935

UNIQUE LOGISTICS INTERNATIONAL, INC.
Adjusted EBITDA

	For the		For the
	Three Months Ended		Three Months ended
	November 30, 2022		November 30, 2021
Net income available to common shareholders	$	3,271,697	$	4,488,225

Add Back:
Income tax expense		871,860		1,902,541
Depreciation and amortization		201,966		194,875
Change in fair value of derivative liability		(125,708)		-
Interest expense (including accretion of debt discount)		972,300		2,272,236

Adjusted EBITDA	$	5,192,115	$	8,857,877




	For the		For the
	Six Months Ended		Six Months Ended
	November 30, 2022		November 30, 2021
Net income available to common shareholders	$	6,593,038	$	6,511,641

Add Back:
Income tax expense		1,664,047		2,537,000
Depreciation and amortization		402,640		388,672
Gain on forgiveness of promissory notes		-		(358,236)
Gain on extinguishment of convertible notes		-		(780,050)
Change in fair value of derivative liability		(744,656)		-
Interest expense (including accretion of debt discount)		2,329,985		3,974,995

Adjusted EBITDA	$	10,245,054	$	12,274,022