Q2 2022 Radiant Logistics Inc Earnings Call
Speaker 1: This afternoon, Bond Crane, Radiant Logistics founder and CEO , and Radiant's Chief Financial Officer Todd Macomber will discuss financial results for their company's second fiscal quarter and six months ended December 31, 2021.
This afternoon, Bohn Crain, Radiant logistics, founder and CEO and ratings Chief Financial Officer, Todd Macomber will discuss financial results for the company's second fiscal quarter and six months ended December 31 2021.
Speaker 1: Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes.
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 $19 33, and the Securities Exchange Act of 1934. The company has based these forward looking statements on its current expectations and projections about future events. These forward looking statements are subject to known and unknown risks.
Speaker 1: This conference call may include forward-looking statements within the meetings of the Securities Act of 1933 and the Securities Exchange Act of 1934. The company has based these forward-looking statements on its current expectations and projections about future events.
Speaker 1: 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 achievement to be materially different from the results or achievements expressed or implied by such forward-looking statements.
Uncertainties and assumptions about the company that may cause the company's actual results or achievements to be materially different from the results were achievements expressed or implied by such forward looking statements.
Speaker 1: While it is possible to identify all factors that may cause the company's actual results or achievements to differ materially from those set forth in our forward-looking statements, such factors include those that have in the past and may in the future be identified in the company's SCC filings and other public announcements which are available in the Radiance website at www.radiantdelivers.com. In addition, past results are not necessarily an indication of future performance. Now I'd like to pass the call over to Radiance founder and CEO , Bon Crane. Thanks, Matthew.
While it is possible to identify all factors that may cause the company's actual results or achievements to differ materially from those set forth in our forward looking statements. Such factors include those that have in the past and may in the future be identified in the Companys SEC filings and other public announcements, which are available in the radiant website at www Dot radiant delivers dot com.
In addition, past results are not necessarily an indication of future performance now I would like to pass the call over to radiance founder and CEO bond Crane.
Thanks Matthew.
Good afternoon, everyone and thank you for joining in on today's call.
Speaker 2: We don't have flowers or chocolates to offer today on Valentine's, but we do have some very good news to share as we continue our trend with another quarter of record financial results for the December quarter.
We don't have flowers or chocolates to offer today on valentines, but we do have some very good news. This year as we continued our trend with another quarter of record financial results for the December quarter.
Speaker 2: We posted record revenues of $332.8 million, up $114 million, or 52.1%.
We posted record revenues of $332 8 million up $114 million or 52, 1% record net revenues of $71 6 million up $16 3 million or 29, 5% record net income attributable to radian of $6 9 million up three.
Speaker 2: Record net revenues of $71.6 million, up $16.3 million, or 29.5%. Record net income attributable to radians, up $6.9 million, up $3.1 million, or 81.6%. Record adjusted net income of $12.3 million, up $3.7 million, or 43%. And record adjusted EBITDA of $17.3 million, up $4.8 million, or 38.4%. For more information, visit www.fema.gov
$1 million or 81, 6%.
Record adjusted net income of $12 3 million up $3 7 million or 43% and record adjusted EBITDA of $17 3 million up $4 8 million or 38, 4%.
Speaker 2: In addition, we also saw improvement in our adjusted EBITDA margin, which increased 140 basis points to a record 24.1% up from 22.7% in the comparable prior year period.
In addition, we also saw improvement in our adjusted EBITDA margin, which increased to 140 basis points to a record 24, 1% up from 22, 7% from the comparable prior year period.
Speaker 2: 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 changing market dynamics and support our customers in this capacity constrained market.
These results reflect the benefit of our scalable non asset based business model the diversity of our service offerings and our ability to quickly respond to changing market dynamics and support our customers in this capacity constrained market.
Speaker 2: In addition, we delivered these record results while working through the challenges presented by our previously disclosed ransomware event that occurred on December 8.
In addition, we delivered these record results while working through the challenges presented by our previously disclosed ransomware event that occurred on December eight.
Speaker 2: Also note that these record results reflect only a one-month contribution from Navigate, given the fact that we did not complete the transaction until November 30.
Also note that these record results reflect only one month contribution from navigate given the fact that we did not complete the transaction until November 30.
With offices in the twin cities and Chicago as well as Shanghai. The navigate platform itself represents an exciting new opportunity for the radiant network in the end customers that we serve.
Speaker 2: With offices in the Twin Cities and Chicago as well as Shanghai, the Navigate platform itself represents an exciting new opportunity for the Radian network and the end customers that we serve.
Speaker 2: In addition to solidifying our presence in Shanghai, Navigate also strengthens our international service offering, particularly in the areas of customs brokerage, ocean forwarding, and drayage services, and brings with it a proprietary technology platform to facilitate global trade management.
In addition to solidifying our presence in Shanghai navigate also strengthens our international service offering, particularly in the areas of customs brokerage Ocean forwarding.
In Drayage services and brings with it a proprietary technology platform to facilitate global trade management.
Speaker 2: These new global trade management capabilities will be made available to the entire Radiant network to provide our customers with purchase order and vendor management tools that unlock SKU level visibility from the manufacturing floor in Asia through final delivery here in the U.S.
These new global trade management capabilities will be made available to the entire radiant network to provide our customers with purchase order and vendor management tools that unlock SKU level visibility from the manufacturing floor and Asia through final delivery here in the U S.
Speaker 2: With both the enhanced service offerings and proprietary technology, we believe we will further differentiate ourselves in the marketplace and be even better positioned to provide additional support for both current and prospective customers.
With both the enhanced service offerings and proprietary technology. We believe we will further differentiate ourselves in the marketplace and be even better positioned to provide additional support for both current and prospective customers.
In addition to progress on the acquisition front. We also continue to put capital to work in our stock buyback program and have now purchased six $3 million in stock through the six months ended December 31 2021.
Speaker 2: In addition to progress on the acquisition front, we also continue to put capital to work in our stock buyback program and have now purchased $6.3 million in stock through the six months into December 31 of 2021.
Speaker 2: As we previously discussed, we believe that our current share price does not accurately reflect Radiance's intrinsic value or long-term growth prospects. And we expect to continue to deploy our capital through a combination of strategic acquisitions and stock buybacks.
As we've previously discussed we believe that our current share price does not accurately reflect radiance intrinsic value our long term growth prospects and we expect to continue to deploy our capital through a combination of strategic acquisitions and stock buybacks.
Speaker 2: It is also worth pointing out that the record results that we've delivered over each of these last several quarters have been fueled almost exclusively by organic growth.
It is also worth pointing out that the record results that we've delivered over each of these last several quarters had been fuelled almost exclusively by organic growth.
Looking forward, we remain optimistic about our prospects and opportunities to continue to leverage our best in class technology robust North American footprint and extensive global network of service partners.
To continue to build on the great platform, we have built here at radiant at.
Speaker 2: At the same time, we have begun to thoughtfully re-lever our balance sheet and through a combination of strategic acquisition and stock buybacks, we believe we are creating meaningful intrinsic value for shareholders that has yet to be recognized in our stock price.
At the same time, we have begun to thoughtfully re lever our balance sheet and through a combination of strategic acquisitions and stock buybacks. We believe we are creating meaningful intrinsic value for shareholders that has yet to be recognized in our stock price.
With that I'll turn it over to Todd <unk>, our CFO to walk us through our detailed financial results and then we'll open it up for some Q&A.
Thanks, Bob and good afternoon, everyone. Today, we will we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the three and six months ended.
December 31 2021.
For the three months ended December 31 2021.
Reported net income attributable to radiant logistics of $6 million $948000 on $332 8 million of revenues or <unk> 14.
Per basic and fully diluted share. Please note that this quarter included approximately $750000 of expense related to the cyber event disclosed in December .
Speaker 3: For the three months ended December 31, 2020, we reported net income attributable to radiant logistics of $3,812,000 on $218.8 million of revenues, or $0.08 per basic and $0.07 per fully diluted share. This represents an increase of approximately $3,136,000 of net income over the comparable prior year period, or $82.3. And while the dependable lower wages engines are symbols of un
For the three months ended December 31, 2020, we reported net income attributable iridium logistics of $3 million $812000 on $218 8 million of revenues or <unk> <unk> per basic and <unk> <unk> per fully diluted share. This represents an increase of approximately $3 million 100 <unk>.
$36000 of net income over the comparable prior year period, or <unk> 82, 3%.
Speaker 3: For adjusted net income, we reported $12,317,000 for the three months ended December 31, 2021, compared to adjusted net income of $8,642,000 for the three months ended December 31, 2020.
For adjusted net income we reported $12.317 million for the three months ended December 31, 2021, compared to adjusted net income of $8 million $642000 for the three months ended December 31 2020.
Speaker 3: This represents an increase of approximately $3,675,000, or approximately 42.5%.
This represents an increase of approximately $3 million $675000 or approximately 42, 5%.
Speaker 3: For Jesse Ibeda, we reported $17,251,000 for the three months ended December 31, 2021, compared to Jesse Ibeda of $12,531,000 for the three months ended December 31, 2020.
For adjusted EBITDA, We reported 17 $251000 for the three months ended December 31, 2021, compared to adjusted EBITDA of $12 million $531000 for the three months ended December 31 2020.
Speaker 3: This represents an increase of approximately $4,720,000, or approximately 37.7 percent.
This represents an increase of approximately $4 million $720000 or approximately 37, 7%.
Moving along to the six month results.
Speaker 3: For the six months ended December 31, 2021, we reported net income attributable to radiant logistics of $14,027,000 on $618.9 million of revenues are $0.28 per basic and fully deleted share.
For the six months ended December 31, 2021, we reported net income attributable to radiant logistics up $14 million and $27000 on $618 9 million of revenues are 28 per basic and fully diluted share.
Speaker 3: Please note this period also included the $750,000 expense related to the cyber event disclosed in December .
Please note. This period also included the $750000 expense related to the cyber event disclosed in December the.
Speaker 3: The six months ended December 31, 2020. We reported net income attributable to real logistics of $6,900,000 on $394.7 million of revenues for $0.14 per basic and fully diluted share.
Six months ended December 31, 2020.
We reported net income attributable to <unk> logistics of $6.900 million on $394 7 million of revenues for 2014.
For basic and fully diluted share.
Speaker 3: This represents an increase of approximately $7,127,000 over the prior comparable year.
This represents an increase of approximately $7 million $127000 over the prior comparable year prior.
Speaker 3: prior comparable year period, or approximately 103.3%.
Prior comparable year period, or approximately 103, 3%.
Speaker 3: For adjusted net income, we reported $22,879,000 for the six months ended December 31, 2021, compared to adjusted net income of $15,159,000 for the six months ended December 31, 2020.
Our adjusted net income, we reported $22 million $879000 for the six months ended December 31, 2021, compared to adjusted net income of $15 million and $159000 for the six months ended December 31 2020.
Speaker 3: This represents an increase of approximately $7,720,000 or approximately 50.9%.
This represents an increase of approximately $7 million $720000 or approximately 59%.
Speaker 3: For adjusted EBITDA, we reported $31,798,000 for the six months ended December 31st, 2021, compared to adjusted EBITDA of $21,753,000 for the six months ended December 31st, 2021.
For adjusted EBITDA, we reported $31 million $798000 for the <unk>.
Six months ended December 31, 2021, compared to adjusted EBITDA of $21.753 million for the six months ended December 31, 2020 <unk>.
Speaker 3: This represents an increase of approximately $10,045,000, or approximately 46.2%.
This represents an increase of approximately $10 million $45000 or approximately 46, 2%.
Speaker 3: With that, I will turn the call back over to our moderator to facilitate an acute.
With that I will turn the call back over to our moderator to facilitate any Q&A from our callers.
Speaker 1: Certainly. 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 that while posing a question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality.
Certainly ladies and gentlemen, the floor is now opened for questions. If you have any questions or comments. Please press star one on your phone at this time, we do ask that while posting a question. Please pickup your handset if you're listening on speaker phone to provide optimum sound quality.
Speaker 1: Once again, if you have any questions or comments, please press star 1 on your phone.
Once again, if you have any questions or comments. Please press star one on your phone.
Speaker 1: Your first question is coming from Jason Seidel from Cowan. Your line is live.
Your first question is coming from Jason Seidl from Cowen Your line is live.
Speaker 4: Hey operator, thank you, Bonn and Todd. Congrats on a very strong quarter. I have a couple questions. One, could you give us an update on the ransomware? Should we expect any impacts here in one queue? If so, how much?
Hey, operator, thank you Bob and Todd.
Congrats on a very strong quarter.
A couple of questions.
One could you give us an update on the ransomware shall we expect any impacts you in <unk>, if so how much.
Speaker 4: I guess the second question I would ask is navigate to help us out in terms of modeling it on a quarterly basis.
I guess the second question I would ask is navigate to help us out in terms of modeling it on a quarterly basis.
Speaker 4: Is there any special seasonality we should think about? And what sort of growth levels are you looking for in 22? And then I have a follow-up question sort of on the overall market.
Is there any special seasonality, we should think about and what sort of growth levels are you looking for in 'twenty. Two and then I have a follow up question also on the overall market.
Okay. So.
Speaker 2: I guess we'll take them one at a time here. So first, relative to the cyber event itself, that is largely behind us now at this point in terms of any incremental costs. So, I mean, there might be some straggling costs.
I guess, we'll take them one at a time here so first relative to.
The cyber event itself.
It is largely behind US now at this point in terms of any incremental costs. So.
I mean, there might be some straggling cost.
Speaker 2: you know, that could come, but it should be really in material and nowhere in the magnitude of the...
That could come but it will it should be really in material and nowhere in the magnitude of.
The.
Speaker 2: plus or minus seven hundred and fifty thousand dollars that we accrued into the quarter into December . So it was a challenging time but that is largely behind us at this point.
Plus or minus $750000 that we have.
Crude into the quarter ended December so it was a challenging time, but that is largely behind us at this point in time.
Speaker 2: Good to hear. The second was navigate. We're still early into the process ourselves in terms of integration. I don't believe we're not expecting you know......
Eric.
The cyber event itself.
The second was.
Navigate.
We're still early into the process ourselves in terms of integration I don't believe but we're not expecting.
Sure.
Speaker 2: Significant seasonality I mean as I think we would expect we would be modestly You know slower in the quarters and quarter ended March and then continuing to build over the calendar year Like a lot of the traditional business is so Pretty standard in that and and that form so I don't think there's anything unique we need to do in terms of modeling
Significant seasonality I mean, as I think we would expect that it will be modestly.
Slower in the quarters in.
Quarter ended March and continuing to build over the calendar year.
Like a lot of the traditional business is.
Pretty standard in that.
That forms so I don't think theres anything unique we need to do in terms of modeling.
Speaker 2: As it relates to seasonality, you know, it's a little early. They can grow off the numbers
As it relates to seasonality its a little early they can grow off the numbers.
Speaker 2: I am particularly, you know, it's early days in terms of our integration, but the technology itself, we're really excited about in terms of kind of detailed PO.
I am, particularly it's early days in terms of our integration, but the technology itself.
We're really excited about in terms of.
Detailed Po management SKU level tool with.
Speaker 2: Q level tool, you know, with, you know, particularly in today's environment with all of the frustrated supply chains and everybody's appetite for
Particularly in today's environment with all of the frustrated supply chains and everybody's appetite for increased visibility to what's happening not only on the water, but on the manufacturing floor.
Speaker 2: visibility to what's happening, you know, not only on the water, but on the manufacturing floor, you know, with the, you know, global challenges of COVID and managing workforces, etc. There's just a heightened...
The.
Global challenges is COVID-19 and managing Workforces et cetera. There is just a heightened interest in that type of visibility and while historically, we could always provide shipment level visibility, we've never been able to offer back to our own customer base.
Speaker 2: Interest in that type of visibility and while in historically we could always provide shipment level visibility We've never been able to offer back to our own customer base this PO level skew level in transit visibility, so we think it's going to be
So level.
<unk> level in transit visibility, so we think it's going to be.
Speaker 2: a really powerful and kind of an incremental opportunity within our installed customer base, as well as just an opportunity to go out and
Really powerful.
Kind of an.
Incremental opportunity within our installed customer base.
As well as just an opportunity to go out further.
Speaker 2: you know, further differentiate ourselves in the marketplace and win new customers. So it's a, you know, we always look for transactions that we think we can, you know, value and structure in a way that makes sense relative to our own.
Further differentiate ourselves in the marketplace and win new customers. So it's.
We always look for transactions that we think we can value and structure in a way that makes sense relative to our own.
Speaker 2: of trading multiples and for the Navigate transaction, you know, we certainly achieved that but, you know, we have this real nugget that we perceive in the technology set that was embedded within the business that we're excited to...
Kind of trading multiples and for the navigate transaction.
Certainly achieved that.
We have this.
Real nugget that we perceive.
And the technology set that was embedded within the business.
We're excited.
Speaker 2: to kind of bring to market in a more robust way.
To kind of bring to market in a more robust way.
Speaker 4: Yeah, seems like it's going to be a good one, Bob. Wanted to, my third and final one here, you talked a little bit about organic growth. Clearly we see the revenue side, but maybe you could parse out sort of the shipment growth that we're seeing, because there's been a lot of positive noise on the pricing front, given sort of just sort of global congested supply chains and what's going on with.
While it seems like it's going to be a good one bump.
Wanted to my third and final one here.
Talked a little bit about organic growth.
Clearly, we see the revenue side, but maybe you could parse out sort of the.
Shipment growth that we're seeing because there is there's been a lot of positive noise on the pricing front, given sort of just sort of.
Global congested supply chains, and what's going on with.
Speaker 4: ocean rates and air rates and trucking rates is just across the board. So how has the organic shipment growth been for you across your different businesses?
Ocean rates and error rates and trucking rates is just across the board. So.
The organic shipment growth for you across your different business lines.
Speaker 2: I think generally speaking, it's been really positive. I mean, obviously we've got increased rates, but in this environment, it's really created an opportunity for us.
I think generally speaking it's been really positive.
I mean, obviously we've got.
Increased rates, but in this environment, its really created an opportunity for us.
Speaker 2: you know, open up relationships with with new customers who are craving capacity. So effectively, if you have capacity, you know, you have opportunities. So, you know, so kind of the opportunity to accelerate engagement with customers and new customers around capacity has been, you know, very interesting for us.
Open up relationships with new customers, who are craving.
<unk>. So effectively you have capacity you have opportunities so.
Yes.
So kind of the opportunity to accelerate engagement with customers and new customers around capacity.
<unk> has been very interesting for us.
Speaker 2: And it's been kind of a continuing theme as we've continued to grow up, but just kind of the size and sophistication of the customers that we.
And.
And then kind of a continuing theme as we've continued.
To grow up but just kind of the.
The size and sophistication of the customers that we.
Speaker 2: have an opportunity to serve, continues to increase. And kind of back to some of the technology angles of some of these conversations, I think that's only gonna continue to increase.
Have an opportunity to serve continues to increase.
And kind of back to set some of the technology angles of some of these conversations I think thats only going to continue to increase.
Speaker 4: And Bob, would you put it in sort of the low single digit, mid single digit, upper single digit growth rates?
And Bob would you put it in sort of a low single digit mid single digit upper single digit growth rates.
The shipments.
Speaker 2: Um, you know, there's always, it's always a bit of a tricky question when we start thinking about mix, uh, in, in terms of modalities, but I think, you know, we continue to.
There's always it's always a bit of a tricky question when we start thinking about mix.
In terms of modalities, but I think.
We continue to.
Speaker 2: you know, to think about baseline organic growth in the...
Stinker think about baseline organic growth in the.
Speaker 2: in terms of growing our gross margin dollars, which we would think of in the, you know,
In terms of growing our gross margin dollars, which we would think of.
Conservatively.
Speaker 2: four to six percent range and then getting the benefit of our scalable back office and seeing an expansion on that on the EBITDA group kind of getting more and more dollars to the bottom line as a function of gross margin and so we would think of that in kind of the eight to twelve times target so four to six and eight to twelve. All right very helpful Bob thank you for the time as always and again congrats.
4% to 6% range and then getting the benefit of our scalable back office in Phoenix and expansion on that on the EBITDA growth kind of getting more and more dollars to the bottom line as a function of gross margin.
And so we would think of that in kind of the eight to 12 times target. So four to 612.
Alright very helpful. Bob. Thank you for the time as always and again congrats on the quarter.
Keith.
Speaker 1: Thank you. Your next question is coming from Jeff Kaufman from Vertical Research Partners. Your line is live. Thank you very much. Congratulations. Thank you. Thank you.
Thank you. Your next question is coming from Jeff Kauffman from vertical Research partners. Your line is live.
You very much congratulations.
Thank you. Thank you.
So a couple of questions.
Speaker 2: Big jump in the tax rate this quarter, almost 300 basis points. Was that kind of a one-time deal? Is something different as a result of Navigate being on board? Was it related to some of the one-time items? Could you give us some guidance on taxes this quarter and then tax rate for the year?
Big jump in the tax rate this quarter, almost 300 basis points.
Kind of a one time deal is something different as a result of navigate being on board.
Was it related to some of the onetime items could you give us some guidance on taxes this quarter and then tax rate for the year.
Speaker 3: Yeah, the tax rate for the year, I'd have to, obviously everything, we just went through a significant exercise over the, or actually over the weekend, and the rates, you know, I think the rate of what we're booking now is going to be the rate going forward. But we did, you know, we looked at, you know, Navigate has more, had more state income taxes than Radiant as a whole. So overall, it's, you know, it changed the overall mix a little bit.
Yes, the tax rate for the year.
Obviously everything we just went through a significant exercise over actually over the weekend.
And.
The rates I think the rate of what we're booking now is going to be the rate going forward, but we did we looked at.
Navigate has more had more state income taxes.
Then radiant as a whole so overall, it's it changed the overall mix a little bit.
Speaker 1: Thank you. Your next question is coming from Mark Argentino from Lake Street. Your line is live.
Thank you. Your next question is coming from Mark Argentino from Lake Street. Your line is live.
Speaker 5: Hey guys, congrats on a solid quarter and sorry to hear about those Minnesota state tax rates. Unfortunately I know a little bit about this. Anyways, congrats on a solid quarter. Obviously you guys are hitting your stride. I guess
Hey, guys.
Congrats on the solid quarter, sorry to hear about those Minnesota state tax rates.
I know that much about that.
But.
Okay.
Anyways.
Thats on a solid quarter, obviously, you guys are hitting their stride.
Yes.
Speaker 1: Your next question is coming from Mike. Sorry, we lost, we lost. Yeah, we just lost the last two.
Your next question is coming from Mike Sorry, We lost we lost.
Yes, we just lost last two.
People.
I got cut off.
Speaker 1: Please hit star 1 to re-enter the queue. Your next question is coming from Mike Vermont from Newland Capital. Your line is live.
Please hit Star one to reenter the queue. Your next question is coming from Mike, Vermont from Newland Capital. Your line is live.
Speaker 6: Hey, guys, how are you doing? Yeah, sorry for that. Yeah, hopefully they'll call back in. Go ahead. So, 1st, I got, I got a phenomenal, you know, when when we started out with, uh.
Hey, guys How're you doing.
Sorry for that yes.
So hopefully they'll call back Yeah go ahead Mike.
First of all guys I got that phenomenon.
When we started out with.
Speaker 6: you know, investing in Radiant years ago, you never could have believed we'd be where we are today. It's incredible. And, you know, as I was out there, it's amazing that we're kind of close to the same stock price and we're earning five times what we used to. So just applaud you guys on that. You know,
Yes, that's the Arabian years ago, you'd never kind of believe we'd be where we are today it's incredible.
Incredible.
Yes, all of that it's amazing that we're kind of close to the same stock price and we're earning.
Five times, what we used to so.
I applaud you guys on that.
Lots have been competitively I guess in the last.
Speaker 6: few months in our sector, some of your, you know, one of your largest competitors.
A few months in our sector some of your.
One of your largest competitors.
Speaker 6: It was announced, I guess, last week that Maersk acquired Pilot, and from what I can see, they paid over 14 times EBITDA. We're trading under six, and I think we're at five and a half right now, a little, a little less. First of all, how do you balance that when you guys look at that? And what do you see happening out there in the competitive landscape? We're the only public.
As announced last week that Mercy acquired pilot.
And from what I can say they paid over 14 times EBITDA, where trading under SEC I think we're at $5 five right now little.
All of that.
First of all how do you balance that when you guys look at that and what do you see happening out there in the competitive landscape what are the only public.
I guess.
Speaker 6: logistics company in that space, right? There's, I guess, three or four others that are privately owned. Mersk decided to buy Pilot, paid an amazing price for them.
Logistics company in that space right. There is I guess three or four other that are privately owned.
Mercer decided to buy pilot pay the amazing price for them.
Speaker 6: How do you see things developing out there? You know, what's your take on all of this? You know, if you give that multiple to us, we're at $23 right now. So there's some massive disconnect here and just wondering what you're thinking.
How do you see things developing out there what's your take on all of that.
If you give them if you give that multiple to us we're at $23 right now so there's some massive disconnect there and just wondering what you think.
Speaker 2: Well, there's a lot of different aspects to that, right? So, I guess, starting with the obvious, which is...
There's a lot of different aspects to that right. So I guess, starting with the obvious which is.
Speaker 2: You know, Maersk and the other ocean lines have accumulated quite a bit of cash in this environment in terms of ocean pricing, so they, you know, I think they also acquired LF Thong, and so there's a, you know, they have been and they may continue to be acquisitive for all that, for all that.
Maersk and the other ocean lines have accumulated quite a bit of cash in this environment in terms of ocean pricing. So.
I think they also acquired Lf Thong and so there is they have been they may continue to be acquisitive for all that for all that.
Speaker 2: you know, we know. So I think, you know, consolidation will continue, you know, so it would seem.
So I think consolidation will continue.
So it would seem.
And.
Speaker 2: You know, in terms of ourselves, you know, you know, we're trying to continue to create shareholder value executing our strategy. We haven't been, you know, rewarded the way that we would like to be.
In terms of ourselves.
We're trying to continue to create shareholder value executing our strategy we haven't been.
Rewarded the way that we would.
Like to be.
You know that creates its own frustration and its own opportunities. So we've begun to do some work on the stock buyback side of things I think we acquire we spent close to 7 million Bucks this past.
Speaker 2: You know, that creates its own frustrations and its own opportunities. So, you know, we've begun to do some work on the stock buyback side of things. I think we've spent close to $7 million this past, you know, through the first six months of this year.
The first six months of this year so.
Speaker 2: You know, it's, it's tough, right? I think that's the straight answer. You know, when we, when we started this journey, you know, I think we were trading at 44 cents a share, right? And, and we're down to 20 cents a share, you know, somewhere, somewhere along the way. So we, you know, we, you know, we, we think we are a lot, you know, I believe a hundred, you know,
Okay.
It's tough right.
The straight answer.
When we started this journey I think we were trading at <unk> 44, a share right.
Sure.
Somewhere along the way so.
We.
We think we are.
I believe.
Speaker 2: Absolutely. We're, you know, we're executing a strategy that is creating meaningful, intrinsic value in the business that that, you know, ultimately, for, I think, a number of contributing factors, you know, hasn't been fully reflected in our stock price. And
Absolutely.
Executing a strategy that is creating meaningful intrinsic value in the business.
Ultimately for I think a number of contributing factors hasn't been fully reflected in our stock price.
And I think thats.
Speaker 2: you know, part of the reality of being, at least some portion of that is part of the reality of being, you know, a smaller public transport, you know, but even some larger public transports, I think of Echo in particular, you know, they, you know, they had done a relatively good job of positioning themselves as a technology for non-asset-based 3PL, and ultimately, you know, they decided to go private themselves.
Part of the reality of being at least some portion of that is part of the reality of being.
A smaller public transport.
But even some larger public transports I think of echo in particular.
They are.
They had done a relatively good job of positioning themselves as a technology for non asset based <unk> and ultimately they decided to go private it themselves. So it's something that we have to continue to take.
Speaker 2: So, you know, it's something that we have to continue to kind of.
To kind of.
Speaker 2: think about in terms of the range of, you know, options for, you know, how we continue to move forward. But, you know, at least at, you know, at least at this point, you know, we believe we're, you know, there's still plenty of work to be done, you know, plenty of opportunity to create shareholder value. How and when that gets unlocked, you know, remains to be, remains to be seen.
Think about in terms of the range of options for how we continue to move forward, but.
At least that at least at this point.
Believed.
There is still plenty of work to be done plenty of opportunity to create shareholder value.
How and when that gets unlocked.
<unk>.
It remains to be remains to be seen.
Speaker 2: But we're, you know, we're still busy executing our strategy and continuing to put up, you know, really exceptional results. And hopefully the cumulative weight of the evidence will ultimately win out and we'll see some appreciation, you know, in our stock price.
But we're we're still busy executing our strategy and continuing to put up.
Really exceptional results and hopefully the <unk>.
Cumulative weight of the evidence will ultimately win out and we will and we will see some appreciation.
And our stock price.
Speaker 2: But at the same time, you know, they're, you know, it's irrefutable, there's lots of money on the sidelines in the private equity world, and they are, you know, they're aggressively bidding on businesses. So, you know, that's, you know, will always be, I shouldn't say always, but at least in this current environment remains.
But at the same time, they're there.
Irrefutable Theres lots of money on the sidelines in the private equity world and they are.
They are.
We're aggressively bidding on businesses.
We will always be.
I shouldn't say always but at least in this current environment remains.
Speaker 2: you know, an option available to us should that make sense.
An option available to us.
Should should that make sense.
Speaker 6: I just got to say, you know, you guys are doing an unbelievable job here. The acquisition looks fantastic, the earnings look great, and going through, I guess, what you dealt with, too, in the quarter.
I just got to say.
You guys are doing.
Unbelievable job acquisition look fantastic the earnings look great and going through I guess, what you dealt with two in the quarter.
Speaker 6: I've gone back, I can't remember a public non-asset logistics company trading at these levels, but with your kind of organic growth, so.
Yes.
And I've gone back.
Remember our public <unk>.
Non asset logistics company trading at these levels, but with your kind of organic growth. So.
Speaker 6: Congratulations, and yeah, eventually it'll unlock, but great job there, and continue it into 22.
Congratulations and eventually it'll it'll unlock but.
But great job there and continue continue it into 'twenty two.
Thank you.
Speaker 1: Thank you. Your next question is coming from David Cannon from Cannon Wealth Management. Your line is live. Hi, good afternoon, guys. Congratulations.
Thank you. Your next question is coming from David Kennon from Kennan wealth management. Your line is live.
Hi, good afternoon, guys congratulations great job.
Thank you.
Speaker 1: So, first question is, what is the leverage, what's your comfort level in terms of leverage ratio versus EBITDA?
So first question.
Is what is the.
Lab bridge, what's your comfort level in terms of leverage ratio versus EBITDA.
Speaker 2: I think the probably the short answer to that is probably two and a half times as where we would
I think the.
Probably the short answer to that is probably two five times.
It's where we would see.
Speaker 2: normalized leverage ratio we would target, you know, our existing credit facilities provide for three times and can flex up to 3.25 times, kind of under our existing framework, so plus or minus two and a half times.
Speaker 1: So we, so we have a lot of room. My question is if the stock continues to trade as the previous caller.
The previous caller.
Speaker 1: called out sub six times, five and a half times EBITDA. Are you more likely to deploy your capital in buybacks or M&A given the current marketplace with most things trading at higher multiples than where your stock is? And by the way, Navigate, great job. I'll do those deals all day long. So how do you answer that? Yeah, well, I think we have to continue to...
Called out.
Six times five five times EBITDA are you more likely to deploy your capital in buybacks or M&A, given the current marketplace with most things trading at.
At higher multiples and where your stock is and by the way navigate great job.
I'll do those deals all day long so what how do you answer that.
Well I think we have to continue.
Speaker 2: We're going to continue to do our best to take a balanced approach. We'll continue to be interrogating the market, looking for, you know, synergistic, you know, compelling, you know, acquisitions that we think make sense for.
I think we're going to continue to do our best to take a balanced approach will continue to be interrogating the market looking for.
Synergetic compelling acquisitions that we think makes sense for.
Speaker 2: the network and for the shareholders and the network, et cetera, but you know, the hurdle rate, you know, becomes in part.
The network and for the shareholders and the network et cetera.
But the hurdle rate.
Comes in part what that looks like relative to buying our own stock.
Speaker 2: you know, what that looks like relative to buying in our own stock.
Speaker 2: And so it's something that historically we've done, we were kind of doing what we said we were gonna do, which is take this multi-pronged approach and do a combination of stock buybacks and continue what will likely be smaller tuck-in acquisitions. That's the baseline playbook in terms of how we think about cash.
And so it's something that.
Historically, we've done.
We were kind of doing what we said we were going to do which is <unk>.
This multi pronged approach and through a combination of stock buybacks and continued.
<unk>.
Likely be smaller tuck in acquisitions.
That's that's the baseline playbook in terms of how we think about.
Capital allocation.
Speaker 1: Okay. And then as far as the impact from the ransomware attack, you quantified it at about 750K. My question is...
Okay, and then as far as the impact from the ransomware attack.
<unk> at about 750 K My question is.
Speaker 1: The adjusted number, does it add back the adjusted EPS number? Does it add back the 750 or that's how it does. Yeah. And the press release, when you get to the I think it's the last page, there's kind of a reconciliation that takes place. And you'll see that 750 is an add back in those numbers.
The adjusted number does it add back the adjusted EPS number does it add back the 754, that's yes. It does yes.
Press release, when you get to the I think it is the last page there's kind of a reconciliation that takes place.
And Youll see that 750 as an add back in those numbers.
And both adjusted EBITDA and adjusted net income bridge.
Speaker 1: Okay, and then what was the net revenue number approximately that we lost from
Okay, and then what was the net revenue number approximately that we lost from.
Speaker 1: I mean, I'm sure I could back into it using your EBITDA margin, but... Well, you can't really get to a net revenue impact of the number. We were sure that there was probably, you know, some small amount of revenue lost through the process, but not a ton. And what I mean by that is we continue to service our customers, you know, through the entire process. So some...
I mean, I'm sure I could back into it using your EBITA margin.
Well, you can't really get to a net revenue impact of the number we we.
We're sure that there was probably.
Some small amount of revenue lost through the process, but not a ton and what I mean by that is we continue to service our customers.
Through the entire process.
So some.
Speaker 2: Some shipments were deferred or kind of slow to move. But we don't believe that there was any meaningful top line revenue loss in the scheme of our overall financials. It was just what you're seeing is.
Shipments were deferred or kind of slow to move.
But there's no we don't believe that there was.
Any meaningful topline revenue loss in the scheme of our overall financials. It was just what youre seeing is the in that $7 50 as the.
Speaker 2: And that $750,000 is basically the third-party cost we incurred in parachuting in the SWAT team to deal with the cyber events.
Basically the.
Third party cost, we incurred and kind of parachuting in.
<unk> team.
To deal with the cyber event itself.
Speaker 1: Okay, and then I should take a moment to just kind of acknowledge the resiliency of the network and all the hard work they did, you know, as we were working through that, it was, it was.
Okay and then.
I should take a moment to just kind of acknowledged the resiliency of the network and all the hard work they did.
We were working through that it was.
It was.
Speaker 2: Pretty amazing the effort the team put forward to ensure that we didn't miss a beat with our customers with a less than optimal fact pattern as we worked through the ransomware.
Pretty amazing.
The effort the team put forward.
Ensure that we didn't miss a beat with our customers with less than optimal but at less than optimal fact pattern as we work through the ransomware.
Speaker 1: Yeah, good call out. And then, you know, what's impressive is the organic growth in the quarter. Could you give us a sense as to what the drivers were? Was it new customers? Was it growth within existing customers? Was it one particular vertical or just sort of?
Yeah, good call out.
And then what's impressive is the organic growth in the quarter could you give us a sense as to what the drivers were it was it was it new customers was it growth within existing customers was it one particular vertical or just sort of.
Speaker 2: just completely dispersed. Yeah, I would say it was really broad based. You know, the guys in Canada continue to do an extraordinary job in their bundling strategy. We saw great growth in the forwarding business, a fair amount of that coming in the ocean product line.
Completely.
First I would say it was really broad based.
The guys in Canada continued to do an extraordinary job.
And Theyre bundling strategy.
We saw.
Great growth in the.
In the forwarding business.
A fair amount of that coming in the ocean.
Product line.
Sure.
And then clipper itself.
Speaker 2: seeing really positive results kind of across the board within their business, with probably the temperature-controlled business leading the way within the work that they do.
Seeing really positive results.
Across the board within their business.
With probably the temperature control business, leading the way.
Within the work that they do.
Speaker 1: And, Bond, you know, this is the first time I've heard you call out, you know, the statement that you did previously about there's a lot of private equity money out there. You know, the implication is, hey, maybe someone's going to is kicking your tires. Could you just...
Mhm and bond you know this is the first time I've heard you call out.
The statement.
Previously about there is a lot of private equity money out there.
The implication is hey, maybe someone's gonna is kicking your tires could you just.
Speaker 1: Comment a little bit more on that. Are you getting inbound calls? No, I would say unequivocally, no one's kicking our tires. I don't want to leave anyone with that impression.
Comment a little bit more on that are you getting inbound offshore I don't know I would say unequivocally no one's kicking our tires I don't want to leave anyone with that impression.
Speaker 2: OK, you know, I get, you know, I certainly get asked from time to time, you know, Hey, are you in the process of selling your business? Right? And, and the answer is unequivocally no, we're not right. We're, you know, we're very passionate about what we're doing. And so we're, we're, we're not in any kind of process considering to sell our
I get I certainly get asked from time to time, Hey are you in the process of selling your business right and the answer is unequivocally no we're not right.
We're very passionate about what we're doing.
And so we're not in any kind of.
Process considering to sell ourselves.
Speaker 1: Okay. Well, good luck next quarter. Keep up the great work and we hope you guys accelerate the buyback in the absence of the creative M&A and take advantage of this opportunity of the disrespect the market is showing to the stock. Thank you. All right.
Okay.
Good luck.
Quarter keep up the great work and we hope you guys accelerate the buyback in the absence of accretive M&A and take advantage of this opportunity the disrespect the market is showing to the stock. Thank you.
Alright, Thanks, Dan.
Speaker 7: Thank you. Once again, ladies and gentlemen, if you have any questions or comments, please press star one on your phone at this time. Your next question is coming from Jeff Kaufman from Vertical Research Partners. Your line is live.
Thank you once again, ladies and gentlemen, if you have any questions or comments. Please press star one on your phone at this time. Your next question is coming from Jeff Kauffman from vertical Research partners. Your line is live.
Speaker 2: Hey, round two. Hey, sorry for that. You got to, I hope you got a roll of quarters there to keep feeding the machine.
Hey round two.
Sorry for that I hope you got a roll of quarters, there to keep feeding the machine.
Speaker 2: Yeah, I'm calling from one of those old phones, I guess. Sorry about that. No, I think it might've been on our end, so I apologize. That's okay, that's okay. All right, so a lot of questions have been asked. I'm glad no one's kicking your tires and you're not going private tomorrow. So let me focus on some other things. A lot of businesses that have reported this quarter,
I am calling from one of those old phones, I guess, sorry about that.
I think it might've been on our end so I apologize if that's okay. That's okay.
Alright so.
A lot of questions have been asked I'm glad no one's kicking your tires and youre not going private tomorrow.
So let me let me focus on some other things a lot of businesses that have reported.
This quarter.
Speaker 2: have been talking about how Omicron really affected their business more than anyone thought in January and even into early February . Absenteeism was up and it wasn't just their businesses but their customers' businesses. I was just curious, it doesn't sound like it was a big deal in fiscal 2Q. You had your own other issues.
I've been talking about how omicron really affected their business more than any one thought in January and even into early February absenteeism was up and it wasn't just their businesses, but their customers businesses. I was just curious it doesn't sound like it was a big deal in <unk> or I'm, sorry fiscal <unk>.
You had your own other issues, but.
Speaker 2: But has Omicron hit your business at all, or has this Canadian trucker protest?
I'm a crime hit your business at all or has this Canadian trucker protest.
Speaker 2: uh... it uh... your canadian business and are there any out of these we should be thinking about as as we're thinking through the third quarter uh... forecast
I hit hit your Canadian business and are there any oddities, we should be thinking about as were thinking through the third quarter forecasting.
Speaker 4: Yeah, well, it seems like it's kind of the recurring non recurring oddities, right? So all of those things you
Yes, well it seems like it's the kind of the recurring nonrecurring oddities right. So all of those things you.
Speaker 4: are mentioning, you know, Omicron, you know, the border stuff, you know, all of that stuff is challenging everyone, right? So it, you know, ultimately, it's the folks in the trenches that are where the proverbial rubber meets the road that are, you know, still finding a way to get it done. So it's, it's not.
Our mentioning omicron the border stuff.
All of that stuff is challenging everyone right. So.
Ultimately, it's the folks in the trenches that are where the proverbial rubber meets the road that are.
Still finding a way to get it done so.
It's not.
Speaker 4: It's not without a lot of effort. So we are being, I guess, impacted in terms of blood, sweat, and tears. But everybody's answering the bell and getting it done. But again, not unique to us, but I think everybody is really challenged on the labor front.
It's not without a lot of effort. So we are being.
I guess impacted in terms of blood sweat and tears, but.
Everybody's answering the bell and getting it done but not.
Again, not unique to us, but I think everybody is really challenged on the labor front.
Speaker 4: through a combination of inflation and then just people being out sick and in quarantine with Omicron, so it's you know
Through a combination of inflation and just people being out sick and in quarantine with omicron. So.
Everyone's.
Speaker 4: short-handed and and trying to carry more water than they normally would need to, you know, waiting for folks to get back on the job as they're kind of recovering. So it's kind of, we've had a lot of
Short handed and.
Trying to carry more water than they normally would need to.
Waiting for folks to get back on the job as their kind of recovering so it's kind of we've had a lot of <unk>.
Speaker 4: you know, absenteeism in response to Omicron, but fortunately, you know, again.
Absent theism in response to omicron, but fortunately.
Again.
Speaker 4: I think, generally recognize, you know.
Think generally recognize.
No.
Speaker 4: most folks aren't going to the hospital with Omicron, you know, they're out for several days, but then
Most folks aren't going to the hospital with omicron.
Like are.
They are out for several days, but then they are back.
Speaker 4: And so we're working through it as best we can, just like everybody else.
And so we're working through it as best we can just like just like everybody else, Jeff as it relates to Canada, Yes, I mean, great question.
Speaker 3: Hey, Jeff, as it relates to Canada, yes, I mean, great question.
Speaker 3: We, you know, basically, Canada has been able to kind of navigate through that, as you know, the trucking, you know, they've been largely shut down, but they're able to move stuff that where they were trucking stuff, they've gone rail to get it across the board.
We.
Basically Canada has been able to kind of navigate through that as you know the trucking.
Been largely shut down, but they are able to move stuff.
We're trucking stuff they've gone rail to get it across border. So it's a matter of.
Speaker 3: So it's a matter of kind of tactically attacking the issue, but they've been able to do that so far.
Kind of tactically attacking the issue, but they've been able to do that so far.
Speaker 3: But that's great to hear impact. It certainly impacts them. You know, it's it's a challenge for them for sure. Hopefully all that is getting getting resolved soon. I think it's kind of certain to lighten up is what I saw on the news. But yeah, it's it's.
But that's great to hear impact it certainly impacts it.
The challenge for them for sure hopefully all of that is getting getting resolved. Soon I think it is kind of starting to lighten up as what I saw on the news, but yet.
It's ongoing for now.
Speaker 2: Now, Todd, we got cut off. I was following up your tax comment because you had mentioned things are different now with Navi. Jeff, we're going to have to cut you off again if you start asking tax rate questions. Well, I'm just wondering kind of what's the right way to think about it going forward?
Todd We got cut off I was following up your tax comment.
As you mentioned things are different now with with Nab, Yes, if we're going to have to cut you off again and you start asking tax rate question.
Well I'm, just wondering kind of what's the right way to think about it going forward, yes, I think the rate.
Speaker 3: Yeah, you know, I think the rate, you know, I mean, we, you know, everything got trued up and we went through the whole exercises this, you know, last few days, you know, with our with our tax advisors, you know, you know, the reality of it is, if you look at radiant as a whole, you know, we're in a lot of places where we're not having to pay state taxes, because we don't have nexus. But when you look at navigate
Everything got true up and we went through the whole exercise this.
The last few days with our with our tax advisers.
The reality of it is if you look at radian as a whole.
We're in a lot of places, where we're not having to pay state taxes, because we don't have nexus, but when you look at navigate.
Speaker 3: You know, they are largely in, you know, in Minnesota and they've got operations in Chicago. They've got, you know, boots on the ground there, so they're paying state income taxes. So, I mean, the overall rates, I mean, everything was looked at very closely. I think the rates that we have right now, this quarter, you know, barring another acquisition, you know, the rate here is what I think is going to stay the rest of the way.
They are largely in.
In Minnesota, and they've got operations in Chicago, they've got boots on the ground. There so they're paying state income taxes. So I mean, the overall rates I mean, everything we've looked at very closely I think the rates that we have right now this quarter barring another acquisition.
The rate the rate here is what I think is going to stay the rest of the way.
So thats.
Speaker 3: You know, that's the best rate that you can use right now barring another acquisition.
That's the best rates that you can use right now barring.
Another acquisition, alright, well since I asked about tax rate twice I guess I should stop so thank you very much.
Speaker 2: All right, well, since I asked about tax rate twice, I guess I should stop, so thank you very much. You bet. Thanks, Jeff.
You bet.
Thanks, Jeff.
Thank you there are no further questions in the queue I will now hand, the conference back to our host for closing remarks. Please go ahead.
Speaker 7: Thank you. There are no further questions in the queue. I will now hand the conference back to our host for closing remarks. Please go ahead.
Speaker 4: Thanks. Let me close by saying that we remain optimistic about our prospects and opportunities to continue to leverage our best in class technology, robust North American footprint, and extensive global network of service partners to continue to build on the great platform we have here at Rady.
Let me close by saying that we remain optimistic about our prospects and opportunities to continue to leverage our best in class technology robust North American footprint and extensive global network of service partners to continue to build on the great platform. We have here at radiant at.
Speaker 4: At the same time, we've begun to thoughtfully relever our balance sheet and through a combination of strategic acquisition and stock buybacks, we believe we are creating meaningful, intrinsic value for our shareholders that is yet to be recognized in our stock buybacks.
At the same time, we've begun to thoughtfully re lever our balance sheet and through a combination of strategic acquisitions and stock buybacks. We believe we are creating meaningful intrinsic value for our shareholders that is yet to be recognized in our stock price.
Speaker 4: Through this multi-pronged approach of organic growth, acquisition, and stock buybacks, we believe we will continue to create meaningful value for our shareholders, operating partners, and the end customers that we serve. Thanks for listening and your support of Radiant Logistics.
This multi pronged approach of organic growth acquisition and stock buybacks. We believe we will continue to create meaningful value for our shareholders operating partners and the end customers that we serve thanks for listening and your support of Radiant logistics.
Speaker 7: Thank you ladies and gentlemen. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.
Thank you ladies and gentlemen. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.
Jim.