Radiant Logistics (RLGT) 8 Feb 242024 Q2 Earnings call transcript

Good day, everyone. This afternoon, Bohn Crain, Radiant Logistics Founder and CEO; and Radiant's Chief Financial Officer, Todd Macomber will provide a general business update and discuss financial results for the company's second fiscal quarter and 6 months ended December 31, 2023. [Operator Instructions].

This conference is scheduled for 30 minutes. This conference may include forward-looking statements within the meaning of the Securities Act of 1933 and and the Securities Exchange Act of 1934. these future on events. based and current has about projections company forward-looking its statements expectations The that company's These and be expressed and company or unknown statements materially risks, cause forward-looking are results such uncertainties assumptions subject different from implied about or achievements by results or actual to the known may to the achievements the statements. forward-looking

the forth actual materially impossible factors website Such www.radiantdelivers.com. those that future the may company's set announcements, company's and the Radiant the from statements. to differ may SEC in in to all results other our at public identify is are achievements factors it that which on While the or forward-looking have the in those past filings identified cause include be in and available

results an future In indication not addition, necessarily of past performance. are

to Now the yours. and to CEO, floor Radiant's Crain. over Founder call is Sir, the I'd Bohn like pass

and in Good joining thank Thank for afternoon, you, everyone, Alex. you call. today's on

the results This XX, by the the for ended freight year-over-year prior only to experienced as as well negatively capacity results December industry for excess to period results. the current being impact to operations. of with record our XXXX, reflect difficult our demand weak markets entire but quarter continues Our also extended the freight combined comparison not continue our period. year

begin expect and positive back XXXX. to at results months for million cash the generated sustainable bottom tough near towards markets ended the year-over-year or $XX.X find from of X to we comparisons, operations are and of said, continue half in we December million that calendar deliver and $XX.X we the have cycle, we XX, that 'XX. meaningfully in levels With to and would the optimistic adjusted remain their EBITDA normalized Notwithstanding the more to way

credit facility. continue on the on cash with million addition, nothing our $XX hand drawn and a finishing strong sheet, quarter enjoy balance million $XXX In we to approximately of

discussed, these back previously time, to of as we combination navigate tuck-in focused through conditions. our As well growth thoughtfully more remain a we station on way At same delivering are and to market markets. positioned freight find conversions, of slower normalized believe through relevering a we we acquisition and and Asian balance our organic stock buybacks. sheet synergistic through initiatives acquisitions profitable combination the

agent location. Through this excited In our deliver serve. meaningful time, shareholders the combine the to recent in of XXXX end solidify industry proposition will look our ready value Radiant of of and these of transactions broader a benefit their they entrepreneurs built-in partnering entrepreneurs to transition company-owned who strategy agency our an are to would partners will the we approach, are support inherent we operating pipeline we and believe, logistics goal over in from from the unique Florida. in We strategic begin when our about offering partners station available agent-based value select the regard, and conversions continue the with for launched operating We customers very the X believe businesses Delray with to that our which and of acquisition our representative forward supporting we cruise in exit we this participating network, with line South are to in other opportunities network.

we'll some for our Macomber, said, over then walk our open I'll up it Q&A. CFO, Todd to through turn and detailed financial it results, that With to now us

the adjusted EBITDA we everyone. net for income our good X Thanks, including XX, will results, months Bohn, and financial ended afternoon, December X and and be XXXX. discussing adjusted Today,

to million diluted Logistics on basic Radiant revenues XX, [ and For net the share. reported X point $XXX,XXX months $XXX per or ended we XXXX, of attributable ] December $X.XX of income

million $X.XXX net million of months income XX, per $X.XXX a Logistics December on $XXX.X approximately or basic of the period. ended and net revenues X reported over X.X%. represents share. we XXXX, diluted decrease to of This the million income For of comparable attributable or $X.XX year REIT prior

XXX XX, income we of X For December XXXX, for months reported adjusted adjusted for months ended net XX, December to million $X. compared $XX.XXX X the the XXXX. net income, ended million

This approximately approximately decrease of a or $X.XXX represents million XX.X%.

approximately For XX, EBITDA, for adjusted ended XX, approximately ended for million represents XX.X%. XXXX. we adjusted $XX.XXX compared $X. months This $X.XXX million million months reported the or decrease December X to of a XXXX, the December X of XXX EBITDA

along the Moving to results. X-month

months per of XX, $X.XXX million million we XXXX, and net of or to Logistics per X diluted December share. the ended $X.XX For $X.XX basic revenues Radiant $XXX.X on reported income full attributable

For $XX.XXX million months to share. fully of per revenues XX, of December Logistics XXXX, basic ended the reported from attributable we and Reading diluted $X.XX income X million or $XXX.X net

This prior of period represents a $X.XXX approximately decrease over the million XX.X%. comparable or year

of reported million for December adjusted December income, months million ended the income months $XX.XXX net $XX.XX This XX.X%. approximately a we XX, $XX.XXX represents adjusted XX, for million, decrease to For approximately net the XXXX. XXXX, or compared of X X ended

for EBITDA for reported the months ended X approximately the XX, $XX.XXX ended XXXX, December XX, of approximately $XX.XXX million EBITDA, or December XX.X%. a X compared This of million $XX.XXX million months adjusted decrease XXXX. For we represents to adjusted

to call from moderator With our back facilitate the I Q&A our to that, callers. will turn any over

Jason [Operator Seidl first from with Cowen. coming TD Instructions] is question Our

the If of least couple there an through the is cost stick any from be for basis? to EBITDA expect the current ramp-up Can us acquisitions. talk me, guys. questions what that quarter? onboarded to company going of And I outside private A to at on sort for you you

talked that is some based continue strategies demographics of a the stations agency the our to different $X of just expect maybe anywhere question, to is EBITDA the the million this inherent we've accelerate continuum likely with as couple our guess as about point ultimately which vary Bohn. with be familiar EBITDA And that the Historically, ways. agency kind So along time when at of itself the are I an kind gross answer in line mechanics incremental the the To occurring, buy in to aren't to seek network. that from station, divided their can we they we exit reminder to as agency rate to the And upon from at of million manifests defined folks kind by profile. $X a some bottom expression typical a would is of margin. that of brush in margin and agency size stations painting

local an convert and commissions station the really get difference cost, existing our labor that SG&A and that a company-owned gestation revenues store, just don't that their effectively So we and profitability is of have margins to when that we increase. eliminated, It's gross increase, our agent the we don't business level onboard onboarded.

of in infrastructure onboarding in acquisition. there's early no able contrary, cost days bit our the And acquiring redundant and se the networks, costs when capture. in there per So of that other to to little incremental talked we about we were we agent-based past, some the were the calls terms a this back-office really in was

that was the cost synergy. so And

network. We have node slightly the a the similar but different at level opportunity of

As facilities. example, facilities, be costs, X we various redundant agency in acquire stations, of as an there'll our

we're them make the available it point wouldn't there kind do level next strategies at brand So network they're we thing a their do in excess we're me of support ready promise good synergies node month, supporting going us where of these to on that folks to the as one be cost not occurs. were the to kind agent over but it type surprise to as X some or time. so as approaching here that are wouldn't just if our quarter process ring stations over And of and that of network . and to our bell. to should we continue incremental year our on the here

forwarding side, that been How do current see that sense. when results? a back Or and the was thought was and here on That broader before that sorry, in going you and I'm how the at side. an step X market you on makes you results quarter? look Bohn, impacting impacting both take I not. is geopolitical the macro from one lot's the agent a

Well, I slow for is December. was it it's the through general everyone. I narrative think, certainly And think slowed down, it -- obviously

anything going way got slow back some as we've And I'm sequential see of that you will any through to then and to after number optimistic we'll to and continue it be we certainly kind quarter. relatively on political that find normalcy, things of of think I the kind alluded rates improvement geopolitical March all. start to but of our sense kind of interest or

of There's any the to think fortunate like to think hopeful I of cash where for balance believe seen number of but the improvement headwinds, we're it, kind kind I in of half sheet. of of and I us, are individually, I'm count the as pretty And have and would worst the we debt on for of us back terms we free, on year. be kind

So intending speak. execute kind these through combination acquisitions, conversions tuck-in of core so to through net-net, just continue stock kind to and we're strategy And of our of storm, the right the buybacks. to

thing. that is this Todd, Okay. I appreciate quick color. Maybe, you. One for

at you to should you guys looks under forward? going good current Just like to to back expect see we levels, continue buying shares stock. support did it you -- It

Our Lake Capital. coming Argento with is next question from Mark Street

out guessing agent look on that at envision out? really walk And out? through know quarter, maybe just over through of need how core us scenario, kind I'm you say, walk don't agent playing I And anything this point. how of station just of X conversation, just you you this outside but you what of the how at kind capital envision time, that could that over those? out. have I you kind here do M&A enough pace to opportunity to And the there? mentioned market point from the you What's following time, to this realistic continue Todd, accelerate? can up does on us should stations many just quickly, you there Maybe buy a deploy

here our Yes. frame think of We're have Well, line agent them. support with to time the or time I or kind recognizing on suits stations acknowledging. to we that begin

support of we're trying stand but partners, their compel to our So we to not twisting them kind arms out ready sell. to

us deciding they're a So right? support said, some with hand of none where And and are conversations. we to back ultimately to we'll they're younger, kind and demographics, move kind be kind just coming any to naturally on depend forward . have when ready, of to their folks getting those raise of point the so it are With them. of will of here that

So in we have roughly network. the agent XX stations

accelerate won't when to actively So the there's is rate kind happens could time. say a of network kind do anecdotally wouldn't but mean, It's we stations one would kind and right it And to terms, than back market, that we quarter, can feels but big my hard those I of guess, that our will tell now in of of terms talking the kind of comes what than right, within that I is us which addressable a i company. frequency the we're in of demographics it I you infinitely, happen, stations more continue. expect of kind in exactly support are to banker we over where but history more now to have the of our just ever think I of, at

positions? That's that just post structure changed hit out earn in the just it's the their of rest bogeys maybe terms and an at all, part and they terms upfront of remind but in helpful. us if as And of also performance kind typical

a EBITDA Typically XX% and earnout. the Obviously, upfront typically do we'll the then targets. X-year targets,

Thompson is Our from question with Kevin Davis. Gainey next coming

acquired of actually, guys quantifiable for like EBITDA piece of contribution to Todd, have up maybe all you continue those that to. And and guys, the theoretically, of a went if it kind add would you M&A kind Do agencies.

Not in call we at the off then better about that to future at a can to the talk [indiscernible]. I'll be homework position today. head. that top our disclosures, top we're disclose of maybe something or take of But that's least work and nothing as kind a our would of prepared we No. talk and assignment, some on at

for opportunity you I want from that size standpoint. the guys Yes. the just of

to know where don't what acquisition. right? going we looking know their just their margins what us know position that gross costs operating the costs but at We are. with not in don't until don't We a their We we what we're -- operating are, get share are they're

picture. So part complete not the it but of known, is

look to cost margin. we But on at to And to stations. will least that you. that operating answer of least our that agency begin can convert our line go the right? manifest expansion, stations as cost, at will to gross Yes. item partner least right, at face them place is as as function agency of commissions, EBITDA statement of we at single . There's our you away buy a that dimensionalize biggest the That's right? itself as And in nonanswer then that margin income

we Also, conditions talk the lead second that to you're or thinking can you would maybe second factors how about pickup. calendar half? if would about think What

consumer start -- we're Greater little We to right? I confidence a pricing part think is start bit. see of ocean starting it, to up, to up pick volumes pick generically,

are of encouraging, just that's capacity some forced not the demand and to others that day geopolitical of on helping that's kind the of kind settle stuff and inland shipper remains to but going in continue Hopefully, in be inland So But for hands we of down. the piece, whether improve for or out, a But what rationalize supply things. yellow they guess, the end will call for seen. it's transportation need and at the kind will weaker ocean piece dynamics between better just the constructive side being demand the, in I that that's little the transportation destruction of the the balance again, and market market. of

question Vertical with from next Partners. Research Kauffman is Jeff Our Instructions] [Operator coming

strange. It's

comment? As these we're everybody's visibility the thicker consistent and a I to I great theme -- feel kind that right Would fog getting is with but outlook, now. all sit we close, here calls the disagree of listen you isn't think earnings little is forward and that and

No.

I think that's very fair.

is like or the that Or we it starting of you trade network actually things maybe believe better? done. ISMs just Well, talk could here. to turning, things be see feel getting some we bottoming when on subindustries you destock leads know about is we more you be could inventory the parts We curve So flow, your in to that seeing some are

early ocean We're of of things kind indications ocean the -- the side on particular. seeing some in improving on

reasonably toughest So brokerage our at bad of business. core area, still news, for a is truck that's that's And our environment. the probably helpful. least the of I go this kind and a are good things international kind January, in lowest forwarding do piece kind It it's Canada would continues in say high do well. and off improve weekly to November levels. starting postings and early to as lift is us. intermodal level, continues modestly. tough but at Again, we're those December well. ocean slow was business going news, to of certainly watching of been in smallest late to reasonably of February, and starting

-- that and dynamic. would And obviously what that's some of think that But I that's in generally expect expect. so kind seasonality like revolutionary, kind right? That's hopefully, would there's we that, of we the of None

courtroom have any today, offer hard don't I kind So to but... of into the evidence

in the There today. things other were courtroom .

Exactly.

up following just So on that.

the little coming bit Coast shift into the are West to East goods Coast. We goods starting a see of to going into from a

Canal. of And Panama that's some of some SUEZ, that

bunch you've whole West coast nationwide other on. you traffic in traffic for in got coming on care I the Coast, know comes it on but mean, a it's in which of is you I different of coming East the Some operations, Coast? things. Do than

Historically, more the trade transpacific lane. we've much significant in had trade flows

we not -- but bigger exposure that the and So got we transpac certainly would side. both, we Transatlantic do on exposure don't like to more a have we've Transpac

those that number for trade positive will see we any as think us. I net reasons, for I of think So flows a improve be

then one here. odd And question last Okay. ball

but the to tariffs Chinese coming President Trump What in Just the had was Transpac happened affects of anything the that Do negatively just you we Court negatively? different given does and still time kind a the you? goods out of your Supreme on flow business of Or for Is goods. some infect that these last business way? that positively or that power, news today.

answer short the complicated can to the customers. the that value think global I more we trade Well, is provide more our gets

commodities get stuff, impact differently, certainly is might of trade flow but a right? but tariffs -- some things So kind of could types be So impacted. and there of that doesn't individual mean not we're that that things can happening, and those little stuff

of you commodity a being kind hit specific right? and So if we're it's really of And of If impacted. I'm know kind thinking something it battleship, my happens, that that's circumstances kind that what are of BXX, servicing -- right? tariffs be to the -- facts could they we particular impacted.

as alternative But come it brand same well. opportunities sourcing create as incremental could easily -- the could having solutions alternative that that or just helping with up be strategies,

Congratulations.

you. Thank

have closing in any Mr. As further back currently we no queue, call hand to for will comments. questions I Crain over the

you. Thank

opportunities about service Let balance American and continue we to through buybacks, growth synergistic for operating our extensive partners customers saying leverage the At multipronged continue to Radiant. age optimistic we a robust our Logistics. same -- on build conversions, tuck-in global technology, created and end of your and believe for sheet of our we acquisitions Thanks create we approach and stock footprint, of North and to at We me partners Radiant remain this here meaningful shareholders, we through of platform continue will prospects close thoughtfully by acquisitions we listening, we've and the that combination time, network to the to that great best-in-class as intend our organic value buybacks. support serve. delever station

This concludes today's conference. you. X Thank

you You disconnect may time, this and for lines your at your we participation. thank