Q3 2021 Radiant Logistics Inc Earnings Call
[music].
On it.
Okay.
This afternoon.
Bohn Crain, Radiant logistics, founder and CEO and Radiant Chief Financial Officer, Todd Macomber will discuss financial results for the company's third fiscal quarter and nine months ended March 31 2021.
Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes. This conference call May include forward looking statements within the meaning of the Securities Act of 1933, and the Securities Exchange Act of 1930 for the company has based these forward looking statements on its current expectations and projections of round about.
Future events.
These forward looking statements are subject to known and unknown risks uncertainties and assumptions about the company that may cause the company's actual results or achievements to be materially different from the results or achievements expressed or implied by such forward looking statements.
While it is impossible to identify all the factors that may cause the company's actual results or achievements to differ materially from those set forth and are forward looking statements.
Such factors include those that have in the past and may in the future be identified and the Companys SEC filings and other public announcements, which are available on the radiant website at www Dot radiant delivers dot Com and addition past results are not necessarily and indication of future performance now I would like to pass the call over to radio.
And its founder and CEO.
Bond Crane, Sir the floor is yours.
Thank you.
Good afternoon, everyone and thank you for joining in on today's call.
We're very pleased to report another quarter of solid financial results, including New records for the March quarter across a number of key financial metrics.
We posted record revenues of $236 5 million up $59 3 million or 33, 5%.
Record net revenues of $56 8 million up $9 million or 18, 8%.
Record net income of $5 million up for $9 million.
Record adjusted net income of $9 1 million up $5 1 million on 127, 5%.
And record adjusted EBITDA of $12 9 million up $6 8 million from 111, 5%.
In addition, we also saw improvement and our adjusted EBITDA margins, which increased to a record 22, 7% for the March quarter.
Up from 12, 7% for the comparable prior year period.
These results reflect the benefit of our scalable non asset based business model diversity of our service offerings and our ability to quickly respond to the changing market dynamics and.
In addition, we've been able to deliver these record results, while maintaining very low leverage on our balance sheet.
We are encouraged by our continued strong financial performance with trailing 12 month adjusted EBITDA through March 31 of $47 8 million.
At the same time, we also believe that our current share price does not accurately reflect radiance intrinsic value our long term growth prospects, particularly given our unlevered balance sheet.
And therefore represents an excellent investment opportunity for both the company and our shareholders.
With the diversity of our customers the strength of our balance sheet, the scalability of our technology the.
And the commitment of our employees.
And the eventual recovery of the business sectors that have been mostly adversely affected by COVID-19, we remain optimistic about the trajectory of the economy and the opportunities that it will present for radiant.
And the months ahead, we will continue to closely monitor how we and the economy are progressing and look forward to re engaging and acquisition opportunities and or a stock buyback activities as the opportunities present themselves.
With that I'll now turn it over to Todd May come for our Chief Financial Officer to walk us through our detailed financial results and then we'll open it up for some Q&A.
Thanks, Brian and good afternoon, everyone.
Today, we will be discussing financial results, including adjusted net income and adjusted EBITDA for the three and nine months ended March 31 2021.
For the three months ended March 31, 2021, we reported net income attributable to radiant logistics of $4 million $984000 on $236 5 million of revenues for 10 cents per basic and fully diluted share, which included a charge of $2 $5 million for change and <unk>.
<unk> consideration, partially offset by a gain of $1 4 million for forgiveness of debt.
Yeah.
For the three months ended March 31, and 2020, we reported net income attributable to radiant logistics of $53000 on $177 $2 million on revenues or zero cents per basic and fully diluted share. This represents an increase of approximately $4 million $931000 of net.
Income over the comparable prior year period.
For adjusted net income, we reported 9 million and $148000 for the three months ended March 31 and 2021.
For the three months ended March 31, 2020, we reported adjusted net income of 3 million and $965000.
Presents an increase of approximately $5 million $183000 for approximately 137%.
For adjusted EBITDA, we reported $12 million and $885000 for the three months ended March 31, 2021, compared to adjusted EBITDA of $6.057 million for the three months ended March 31 and 2020.
This represents an increase of $6 million $828000 or approximately 112, 7%.
Moving along and nine months for the nine months ended March 31, and 2021, and we reported net income attributable or radiant logistics of $11 million $884000 on $631 2 million of revenues or <unk> 24 per basic and <unk> 23.
And for fully diluted share, which included a $4 $4 million charge on change and contingent consideration, partially offset by a $1 $4 million gain on forgiveness of debt.
For the nine months ended March 31, and 2020, we reported net income attributable to radiant logistics of $5 $875000 on $579 $7 million and revenues are <unk> <unk> per basic and <unk> 11 per fully diluted share.
This represents an increase of approximately $6 million.
$9000 over the comparable prior year period or 102, 3%.
Adjusted net income for the nine months ended March 31, and 2021 was $24 million $308000.
For the nine months ended March 31, 2020, we reported adjusted net income of $16 million $747000. This represents an increase of approximately $7 million $561000 for approximately 45, 1%.
Okay.
We reported adjusted EBITDA of $34 million $640000 for the nine months ended March 31, and 2021 compared to adjusted EBITDA of 25 million and $110000 for the nine months ended March 31 and 2020.
This represents an increase of approximately $9 million $530000 for approximately 38%.
With that.
I will turn the call back over to our moderator to facilitate any Q&A from our callers.
Thank you ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time, we do ask if you are listening via speakerphone. Please pick up your handset for optimum sound quality.
And once again, if you have any questions or comments. Please press star one at this time.
These hold just a moment, while we poll for questions.
And our first question today is coming from Jason Seidl of Cowen Your line is live.
Thank you operator, Hey, Bonnie side are you guys doing.
Good how are you Jason doing great.
I'm hanging in there guys.
Question.
On the free cash going forward you said obviously.
Youre going to look at the acquisition front as well as stock buybacks talk a little bit about the opportunity for for acquisitions, because I know that market can be fickle at times and finding the right about and then maybe even converting some of your agents and also talk a little bit about when the right time is to pull the <unk>.
Trigger.
While on the stock buyback because you guys have had buybacks and the past line.
Where are you really haven't done much with him and he's done just a little bit.
Yes sure Jason.
So I guess.
To put this on a little bit of context.
As we were.
Kind of what.
I guess, what I'll characterize as before COVID-19 hit we had.
Begun to ramp back up our stock buyback program.
And had begun to actively reengage and M&A type conversations and try to kind of rebuild that pipeline.
Ultimately when COVID-19 COVID-19 hit.
Pushed the pause button on.
On some of those things.
But.
And at this time last year I think we were.
Two or $3 million into our stock buyback and we were kind of beginning that process.
I think as we've alluded to on a few of our earlier calls.
Until we kind of find our way through the.
PPP loan forgiveness process, we probably won't be active and the stock buyback or at least thats the key.
Current thinking.
But that in and of itself will probably.
Come to closure, hopefully and this June quarter, one way or the other and we remain optimistic that we will get a positive.
And the outcome of that process, but we just we just have to wait and see.
And how the powers that be interact with us around those concepts.
In terms of.
And kind of baseline plan I think our baseline plan remains to effectively take.
Half of our free cash flow and do smaller tuck in type acquisitions.
And the kind of the other half as appropriate.
Get active again on the stock buyback.
Yes.
Again, as you alluded to Jason there.
As we think about acquisitions and <unk>.
Can take a lot of different flavors, but we have.
Kind of the most.
And then.
Low hanging fruit, if you will or the most easily accomplished our conversions of agent based stations.
And I think it was a year ago February.
Was the last acquisition, we did do and it was where we bought in.
Agent stations.
On owner or partner with operations, and Washington, D C and Pittsburgh.
So that remains.
On area of interest, but we're really.
And taking of.
Our broad view of the opportunity set.
Again, as we've talked about on the past, we really think we have three functional platforms to support M&A opportunities.
On our traditional freight forwarding platform.
To our U S based truck brokerage.
Brokerage intermodal and truck brokerage platform and Chicago, that's the clipper business.
And third would be Canadian centric M&A.
Using that as a platform to integrate and on board the M&A opportunities.
And our out of the greater Toronto area, and Canada more broadly.
And I can tell you we have been.
Active and.
And exploring opportunities.
And that would be supported by each of those three groups.
And the past six months or so.
And it's hard to say, which ones of these will ultimately.
Come to fruition if any.
But it's not for lack of effort on out and engaging.
With folks.
And I would say it from.
And it remains a fairly.
And a robust market right now in terms of.
Buyers and sellers and the non asset based third party logistics space.
Yeah, and I was just a little bit surprised.
And you talked so much on the acquisition side, only and that what we've been hearing and the marketplaces that multiples are extremely high right now for a lot of companies and given that the multiple of your own stock is so much lower it would seem to be.
I guess.
A better value if you will.
Unless something specific came up.
Yeah, well again, just to kind of drill down on that a little bit further.
Historically, and even as we think about the opportunity set today.
More likely than not we will be looking at smaller tuck in type acquisitions, where kind of valuation multiples and structures are.
And more favorable than going out and trying to acquire 15% or $20 million EBITDA business.
Because to the extent that we.
And would do that we would run into the very challenges that you are alluding to.
The ones, we should expect would be smaller and then.
Yeah, I mean, I don't want to.
Leave listeners with that with the expectation, we would never do a larger deal because I never want to be.
We kind of limit ourselves, but it would have to be awfully strategic.
For us to ultimately conclude something like that.
But.
And certainly over the immediate term.
And we certainly wouldn't expect to be.
Paying multiples in excess of where our own stock trades.
Which is another.
Kind of another hopping off point to just kind of engaged a little bit and the conversation.
<unk>.
And certainly you and I think most of the folks on the on the call today.
And follow the transportation space pretty closely.
And.
No.
Most every public transport company.
On the planet is hitting two ex their all time highs.
And our own stock has really.
Not kept pace.
With that type of that type of growth on.
Although we have in fact and delivered pretty extraordinary results.
So we're hoping that that kind.
And kind of cumulative weight of the evidence and all we've been able to do and the fact that we're putting up these numbers and that we continue to have an under levered balance sheet.
And that.
We will.
So stop being the Rodney Dangerfield.
Third party logistics.
In terms of kind of how and how we're valued and the marketplace right now.
Well I hope the market takes notice tomorrow, and the health and that's for sure a final question and I'll turn it over to somebody else here.
Most of the companies that we follow have been talking about strength for the remainder of the year I'm not really sure. How people can have sort of that long of a looking glass and the future, but that seems to be the predominant thought out there I'd love to know your thought out there in terms of.
Sort of the backdrop for the entire logistics marketplace that youre seeing and North America.
Well I think all of the same kind of talking points that <unk> been hearing on on the various earnings calls capacity remains.
And the extraordinarily tight.
And I don't think anybody sees that going away.
Near term and so and before we know it will be and kind of back in the middle of traditional peak season.
And.
And kind of approaching the holiday season.
So I think it's not a stretch to conclude at least through calendar 2021, it should remain.
Particularly favorable.
The market for the transports.
And I like how you emphasized traditional peak season and it seems like we've been in peak season for a while now yeah exactly.
Well listen I appreciate the time as always take care guys be safe out there alright, alright, thanks, Jason.
Thank you.
Our next question today is coming from Mark Argento at Lake Street. Your line is live.
Good morning, Todd.
I wanted to dig in a little bit maybe you could talk about a couple of areas.
And as you're seeing some strength.
And then Todd could you just walk us through the balance sheet with sales.
Specificity in terms of where you guys are sitting now.
And availability.
Sure.
We've seen strength across a number of areas of the business.
Certainly and the enough.
And we've talked from time to time about.
Kind of the portfolio effect within our <unk>.
Forwarding business and while there's been a few soft areas.
And then more than offset.
And with the work and opportunity we've had around PPE and the fight against COVID-19 and.
Testing.
And some of those areas and.
And I would even go a step further and say more recently and we've started to see.
Some of the soft areas begin to see a little life retail store fixtures.
As an area that comes to mind.
And I think we're even starting to see some bookings around tradeshow, which is kind of a another laggard, but we're starting to see some life there.
Canada is doing exceptionally well.
<unk> continues to deliver really press of growth characteristics.
Driven by our bundling strategy.
What kind of value added warehousing around our core transportation service offering.
And and Clipper notwithstanding.
Weather and.
Some of the challenges of the rails have had in terms of capacity.
Even clippers and put up some some really.
Good results in this environment so.
Really across the board.
We're seeing some really positive cash.
Contribution from each of our groups.
And this environment.
Sure sure, yes, when we're looking at the debt I mean.
We're obviously, we're in great shape overall cash flows for the quarter were were actually negative and that's mostly due to the investment we put in the Canadian and warehouse.
We expect.
Year over year, I mean, as far as where we've gone from the beginning of the year to now obviously, we've paid down quite a bit I would expect going forward.
We're not going to have the same cash outflows that we did and the current quarter and we will continue to pay down the facility. We've got a lot of obviously a lot of bandwidth for acquisitions and we're looking at that but.
So I would expect going forward that we're going to have a <unk>.
Bigger uptick.
Quarter over quarter as far as the overall debt that we're going to be paying that down.
That's helpful and then in terms of M&A.
And obviously you guys and.
Credit quite a bit of time by and that's from Iran and.
Independent agent stations or stores.
What's the environment and the thought.
Process. There are you guys are killing it right now so there are less and less likely to want a solid at this point.
And whats.
And whats the prognosis and Sir.
And some more.
And then agents, they're bandersnatch and.
They sold for a tail phenomenon.
And.
Yes.
I think it's a mixed bag right it depends on the particular.
Vertical or industry segments that and individual <unk>.
Operator.
Services, So we have.
Quite a few stations that are as you said, killing it in this environment.
But we certainly have some stations and a big exposure to cruise line and trade show and some of those areas where they.
They are looking forward to better times ahead. So it's certainly not a one size fits all in terms of.
Kind of where the individual stations are sitting in the context of and kind of the economic recovery.
And then in terms of kind of our.
Ability slash willingness to support them and their own exit strategies.
And we stand ready to support our partners when they are ready.
And we find ourselves engaged and those conversations.
From time to time.
Consistent with their own goals and objectives. So.
The one thing I can say for certain is none of us are getting any younger and.
And and.
And so.
Ultimately these things will all.
Ultimately convert it just a function of time and when they convert.
Okay, just a follow up Todd on the balance sheet.
Great and investment and warehouse capacity.
Okay.
And it kind of a flow through from EBITDA to free cash flow.
<unk>.
Our incremental more capex.
You guys are looking out for the rest of the year or what's the kind of on the ratio you forgot to free cash and no I would say and Capex excuse me similar to what it was last year and.
Kind of traditionally I mean.
We're looking at probably $5 million outside of the traditionally what we would kind of see this last year and more recently, we've made a big investment and Canada has been doing a really great job and they've come to us and said Hey, we want and we need more capacity, we need a bigger warehouse and so we put a and investment and that and that's paying.
Dividends are getting more throughput so that's kind of a.
And one off compared to what we normally see so I.
And I don't see anything outside of that.
And that's kind of the biggest thing that I would say is different year over year is just as big investment and the Canadian warehouse.
And a lot of that flow through in this quarter.
Alright.
Thanks, guys and congrats on a.
Great results.
Thank you.
Thank you. Our next question today is coming from Jeff Kaufman at vertical research. Your line is live.
Thank you very much hey, everybody congratulations terrific quarter bond good to see and hear you on the call here.
So I wanted to circle back shares for a second and then maybe ask question about the comp and our upcoming quarter here.
So I understand why the share repurchases are not happening can't happen Shouldnt happen right now.
But I agree with you I mean your shares are trading at a pretty big discount out there and.
It seems like a good use of capital what is the existing share authorization or approval amount that is out there and.
Kind of outside of.
Strategic reasons.
What would stop you from from utilizing that once you get a green light.
Yeah and.
I, I believe and Todd hop and and correct me, if I'm wrong, but I believe the authorization was for 5 million shares.
And so that.
Program as authorized I believe runs through 12 31, so we would in theory, we could acquire up to 5 million shares under the existing authorization through.
Through December and then we can refresh it or we can refresh it earlier.
Should that be the case.
And.
<unk>.
And again not to kind of.
The labor the point, but.
If we are.
Approaching I think kind of the momentum.
And kind of frame this slightly more broadly.
If we think are and then again just to kind of keep the math simple if we're trending towards a 50 million dollar run rate of EBITDA.
At a three times multiple that would give us debt capacity of $150 million.
And what is our debt.
I think like 25 or $30 million all in so we've got substantial dry powder.
And that we have the opportunity to deploy as we re lever the business because effectively we delever the business with our equity raise of 2015 and have never effectively re lever the business.
Since 2015.
So.
It will ultimately.
Ultimately come back again too.
Kind of the pipeline, what we see and the pipeline, how we think about capital allocation.
Between compelling M&A opportunities or putting the capital to work two to buyback our stock.
And and I don't think we would ever buy back so much stock that we kind of got it our financial flexibility to pursue.
M&A, so I don't think you'll ever see us kind of put all of our proverbial.
Eggs in one basket and kind of in that regard and.
And I would fully expect if we don't find compelling M&A opportunities to do then we will take a good chunk of our of our excess free cash flows.
Buy back our growth.
I want to say I think it was $5 million and dollars not no I believe it and the 5 million shares.
And with shares that's why I was asking okay, yeah, and I believe it's 5 million shares.
Okay. So let me switch question too because I want to take a little bit about third quarter, and then fourth quarter, where because of PP&E last year, we've got a very unusual comp and.
Also there were portions of your business you mentioned trade show retail.
Cruise lines, you Didnt mentioned, but kind of fell off the cliff and fourth quarter last year and now they should in theory be coming back and some way shape or form.
This year, so when I look at third quarter, you know normally that's a fairly weak seasonal quarter from a revenue perspective for you, but very very strong.
I was a little surprised more of it didnt convert down to the net revenue line. So I'm, assuming purchase transportation was difficult weather was difficult.
It was a very challenging quarter.
But as we head into what should be one of your stronger seasonal quarters of the year.
If I wanted to try and figure out what the right base revenue level is.
How much excess PP&E revenue, where are we comping against however, you want to think about it revenue.
That may not be and the numbers today.
So we can figure out kind of what the right way to think about a sequential growth rate might be as we go from <unk> and <unk>.
And so Jeff I think this next quarter is going to remain particularly challenging to model out.
Because as you said there is on NIM, it's kind of a.
There's a number of things going on right. So I would start with we had.
Significant.
Charter business last year and the comparable period.
And support of FEMA and PPE. So we've got.
A good chunk of effectively low margin revenue and the year ago period.
That we're comping against.
At the same time I think.
Wood.
Im expecting to see more.
More of a carryover.
This quarter with this really tight capacity market environment.
And customers, having to respond to that and be nimble and more air freight opportunities.
West the West Coast ports continue to remain a mess and so we're going to have.
<unk>.
We're going to have a lot of puts and takes in this next.
Quarter.
That.
And that it's really hard to.
Yeah.
With any specificity.
Call exactly where that's.
Going to play out.
I was.
And I was leery.
And as I guess as you would expect that was really appreciative of the June quarter last year, but at the same time and I was looking ahead thinking boy, that's going to be a really tough comp.
Next year as we are now and here we are.
Soon to be reporting on that quarter, but.
But with that said.
This quarter ended March was really.
Nothing short of spectacular from from my standpoint and.
So if we can continue anywhere near these trends.
We will have it and opportunity to keep pace at least with.
Not necessarily at the top line revenue number, but as we've always said, we're more interested and gross margin dollars whats happening and the gross margin dollar line item and getting as many of those gross margin dollars to the bottom line as we can.
No.
I don't envy, you and your modeling exercise for this quarter and I think that's yes, I want to echo that I mean, I look to April and things are kind of echoing what we were and what we've been seeing I mean, I think there is net.
A similar pattern like bonds at the ports are jammed, we're getting hit with surcharges come out and La Theres just things are really tight.
I think it's going to be very very similar to.
What we're seeing and Q3 and.
And like a year ago that we had quite a bit.
Bond mentioned the charter terms that we had we had $125 million or so and in business and a year ago and Q4, and that's obviously low margin business on the flip side.
And the environment is really good and we're putting up good numbers and so.
I share the same sentiment as bond that.
I think this next quarter is going to very much carryover from Q3.
Okay. Thank you very much and congratulations.
Thank you.
Thank you once again, ladies and gentlemen, if you have any questions or comments. Please press star one on your phone at this time.
Our next question today is coming from Mike from Northland Capital. Your line is live.
Hey, guys, Hey, Dan great quarter and wealth.
Thank you.
So I'm trying to put into perspective here.
A few years ago, we were you know.
Putting up for five quarters and for.
For and a $6 million EBITDA quarters.
For the past I guess, let's say for five quarters.
We've been doing and a double digit earnings and pretty much double digit EBITDA.
And our balance sheet was at.
$50 million to $60 million and net debt and now we're approaching none.
I feel like part of what people arent understanding are thinking about is is radiant operating line as the environment is great. We all get that but is there a new paradigm.
And that radiant is operating in and it may not.
And may not be and their strong forever, but are we in this new operating range and paradigm where.
And the integration of the deals is going well and everything is running smoothly or more efficient and we can price better we've won new business and that's something else you didn't talk about yet on this call about the new business that we've won.
And just how the company is running I think that's not being appreciated it out there and if you could just talk about that like are we in this new paradigm range and were out of the sky.
$5 million quarters and were into the 910 11.
Quarter.
And I think that some people aren't getting.
Our price and stock price and the things that we were when we were doing on a quarter.
Net earnings we are doing now and our balance sheet was for time library.
That's the mismatch here that people aren't getting.
Yeah, Mike This is bond so.
Certainly share your frustration.
And so.
On the one hand are you know I was looking at at the day I think.
Year to date I think our stock is up fairly significantly because we were trading down and the.
And with something that started with a three so we at least over this past 12 months, we have seen.
A good improvement but to your point.
<unk>.
And then the point that I made earlier on the call.
And <unk>.
At the end of the day, our stock price does not reflect.
All that we've accomplished.
Hey, Radiant and we.
Certainly.
Started this thing from scratch and and have grown it and grown and over the years, but I think we we certainly on.
Are a different company today than we were five and certainly 10 years ago, and just the relative scale and size of the business and.
Our progress around integration and.
And <unk>.
While.
This environment is it going to.
Continue forever.
One I think it's going to continue for a good while yet.
And.
I'm not sure the best way to say this but.
When it's.
And when and if there's.
A reset I.
I think there is a lot of.
Exposure and holding the names that have run up as well.
Well as they have and.
And virtually no downside risk and.
The radiant stock because we just haven't.
Enjoyed that pop.
And I don't have the multiples in front of me or kind of the relative multiples.
But.
On a.
Comparable basis, there is certainly room for our stock to move higher.
And we our approach at least thus far has been.
To execute focus on execution.
And the cumulative weight of the evidence will ultimately prevail.
And the market will take notice and ultimately there'll be unlocking of value and kind of a step function and improvement and stock price and.
And hopefully that will happen.
Soon but we certainly cant.
Make that happen per se all we can all we can worry about are the things that we can control and what we can at least somewhat control.
And how our business is operating and the financial results that we're putting up.
Right. So I wasn't really like I agree with that fully what I'm really trying to get at is when you look at the operating assets and the business and.
And maybe try to strip out the phenomenal market that we're into.
How is the company operating now and <unk>.
Versus two years ago.
I'm, just trying to get our we and a new paradigm operating.
And the company has radiant operations and integration and now we are really fully and there we have the <unk>.
Intermodal is running well it is.
Is the company and while I think.
And I feel like it is because it goes and back on good times, you've been putting up great numbers and I think there is a fundamental change at the company versus two years ago.
Sure well I mean, another way to kind of get at that same concept would be.
We're making good on our brand promise and and.
And converting agent stations to company owned store and doing more acquisitions of of company owned stores were.
Slowly evolving from a agent centric business to a company own centric business.
And while certainly continuing to support and.
And cultivate our agent network.
Think close to 50% of our gross margins today, our company owned store.
And we enjoy through our company owned stores so.
And as we.
Get better and better at managing our company owned stores and as our company owned stores do better and better.
Which they have.
We we and the.
Holders benefit from that.
And Thats.
At the end of the day.
That's what you are really.
Seeing and our comparative year over year.
Financial improvement, it's not so much.
Growth and the agent stations.
It's the incremental success and our company owned stores.
And wheels.
Yes.
Another question.
Yeah, a lot of time, and we lag on our on our pricing ability and our contractual rates versus what were purchasing our purchase transportation and I feel like we have done phenomenal through this that we have guidance, we try and you.
You see that and our PT cost one and we look out over the next.
234 quarters is that pricing of ours go on to be catching up and your opinion.
And then we will have a margin expansion story as well.
That's hard to say I think.
I think the honest answer is we will see some but probably not as much as you would like to see.
Is that the.
On the forwarding side of the business most of that business is effectively price on a spot.
Market basis so.
We receive calls from the customers. They are looking for a quote on the movement and we've got to be market competitive to win that business.
And so.
And on the one hand.
We can immediately pass through fuel surcharge or our peak Sir.
Peak season surcharges and all of those.
Types of items.
To reflect the tightening market capacity.
If the market will allow us to.
Right.
But what we're part of the dynamic as well as <unk>.
Because the market is so tight.
There is a lot of <unk>.
Incremental business opportunities coming to us because people are looking for capacity and.
And so for US we see it as a real opportunity to.
Regain old relationships build new relationships.
And work our tails off.
Tom.
Create some stickiness.
This incremental new business, so that when and if the market ultimately does soften.
And that the customers stay with us.
Because we will.
And the level of on net earn it we will.
Earn that business relationship price that was my next question, so and the last call and I think we were talking about and really good.
New business, we won and the health care sector.
However on a those playing out and secondly are there some new large opportunities out there for us.
We're getting a little granular at this point in time.
But I would say our sales pipeline remains.
Robust.
Probably as robust as it's ever been and.
And so we're optimistic.
You know about continuing to.
Deliver the organic growth that we're seeing and a lot of.
These recent trailing 12 months.
<unk> numbers.
Excellent, Okay, all right well congrats guys.
Great quarter, and you've been putting up.
Thank you. Thank you.
Thank you we have no further questions in queue. At this time do you have any closing comments you'd like to finish with I do thank you.
Let me close by saying that we remain very bullish on our prospects and our scalable non asset based platform that we've created at radiant.
Our unique multi brand strategy and consolidating agent based forwarding networks industry, leading technology platform and low leverage on our balance sheet puts us in a unique position to navigate these uncertain markets and position ourselves to emerge from this pandemic as a stronger competitor.
As the economy continues to recover we believe this will create a great opportunity to support our customers and bringing their supply chains back online and this tight capacity market.
At the same time, we remain patiently persistent and the pursuit of our vision to leverage our multi brand strategy and scalable back office to bring our unique value proposition to the agent based forwarding community, which we believe over time, we will continue to deliver meaningful value for our shareholders our operate.
And partners and the and customers that we serve.
Thanks for listening and your support of Radiant logistics.
Thank you ladies and gentlemen, this does conclude todays event you may disconnect at this time and have a wonderful day. Thank you for your participation.