Q4 2023 Radiant Logistics Inc Earnings Call
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[music].
Speaker 1: Greetings. Welcome to the financial discussion for fourth fiscal quarter and year ended June 30, 2023.
Greetings and welcome to the financial discussion for fourth fiscal quarter and year ended June 32023 conference call. At this time, all participants are in a listen only mode.
Speaker 1: At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this cont
And answer session will follow the formal presentation, but he won't should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded.
Speaker 1: This afternoon, Bon Crane, Radiance Logistics founder and CEO and Radiance Chief Financial Officer Todd Maycumber.
This afternoon bond Crain, Radiant logistics, founder and CEO and Radiance Chief Financial Officer, Todd Macomber.
Speaker 1: We'll provide a general business update and discuss financial results for the company's fourth fiscal quarter and year ended June 30, 2023. Following their comments, we will open the call to questions.
We will provide a general business update and discuss financial results for the company's fourth fiscal quarter and year ended June 32023.
Following their comments, we will open the call to questions.
This conference is scheduled for 30 minutes.
Speaker 1: This conference call may include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1933.
This conference call May include forward looking statements within the meaning of the Securities Act of 1933, and the Securities Exchange Act of $19 34.
Speaker 1: The company has based these forward-looking statements on its current expectations and projections about future events.
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 risk of certainties 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.
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.
Speaker 1: 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 in our forward-looking statements,
While it is impossible to identify all the factors that may cause the company's actual results or events 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 SEC filings.
Speaker 1: Such factors include those that have in the past and may in the future be identified in the company's SEC filings and other public announcements, which are available on the radiant website at www.radiantdelivers.com.
And other public announcements, which are available on the radiant website at www Dot radiant delivers dot com.
Speaker 1: In addition, past results are not necessarily an indication of future performance.
In addition, past results are not necessarily an indication of future performance now.
Speaker 1: Now, I'd like to pass the call over to Radiance founder and CEO , Bon Crane. Thank you, John .
Now I'd like to pass the call over to Radiant Fatter N C E O Bon Crane.
Thank you John .
Good afternoon, everyone and thank you for joining in on today's call.
Speaker 2: Our results for the quarter and year into June 30, 2023. Continue to reflect the macro economic effects of the difficult freight markets. On the entire transportation sector as well as our own operation.
Our results for the quarter and year ended June 32023 continue to reflect the macro economic effects of the difficult freight markets on the entire transportation sector as well as our own operations.
Speaker 2: confluence of shippers continuing to manage through elevated inventories, reduced imports, and a slowing economic growth has had a cascading effect across virtually every mode of transportation.
The confluence of shippers continuing to manage through elevated inventories reduced imports at a slowing economic growth has had a cascading effect across virtually every mode of transportation.
As in the prior quarter.
Speaker 2: These market conditions have negatively impacted not only our current results, but also the year-over-year comparison to our record results from the prior year period.
These market conditions that negatively impacted not only our current results, but also the year over year comparison to our record results from the prior year period.
Speaker 2: With that said, we believe we are at or near the bottom of the cycle, and we would expect markets to begin to find their way to more sustainable and normalized levels in coming quarters.
But that said, we believe we are at or near the bottom of the cycle and we would expect markets to begin to find their way to more sustainable and normalized levels in coming quarters.
Speaker 2: And while our results are down comparatively, I view the fact that we generated over $9 million in adjusted EBITDA for the quarter in this very difficult market as a positive indicator for radiant and our prospects as we continue through this cycle.
And while our results were down comparatively I view, the fact that we generated over $9 million and adjusted EBITDA for the quarter in this very difficult market as a positive indicator for radiant.
Our prospects as we continue through this cycle.
Speaker 2: In addition, and as we pointed out in the press release, we delivered a record $97.9 million in cash from operations for our fiscal year into June 30, 2020.
In addition, and as we pointed out in the press release, we delivered a record 97 $9 million in cash from operations for our fiscal year ended June 32023.
Speaker 2: During the same period, we have remained relatively quiet on the acquisition front and have instead focused our attention on paying down debt and deploying just over $11 million to repurchase our stock.
During the same period, we have remained relatively quiet on the acquisition front.
And have instead focused our attention on paying down debt and deploying just over $11 million to repurchase our stock.
Speaker 2: Through this disciplined approach to capital allocation, it is fair to say that we are in the strongest financial position in the company's history. And as of June 3023, we have approximately $32.5 million of cash on hand and nothing drawn on our $200 million credit.
Through this disciplined approach to capital allocation.
Is it fair to say that we are in the strongest financial position in the.
Company's history.
And as of June 30, 'twenty, three we have approximately $32 $5 million of cash on hand, and nothing drawn on our $200 million credit facility.
Speaker 2: Having fortified our balance sheet, we believe we are well positioned to navigate through the slower freight markets as we find our way back to more normalized market conditions.
Having fortified our balance sheet. We believe we are well positioned to navigate through these slower freight markets as we find our way back to more normalized market conditions.
Speaker 2: At the same time, we believe our patient and discipline may be rewarded as market conditions become more conducive to our acquisition strategy. And we have ample dry powder to become more active on the acquisition front should the opportunity present itself.
At the same time, we believe our patience and discipline may be rewarded as market conditions become more conducive to our acquisition strategy and we have ample dry powder to become more active on the acquisition front should the opportunity present itself.
Speaker 2: Looking ahead, we will remain focused on delivering profitable growth through a combination of organic and acquisition initiatives. And thoughtfully, re-levering our balance sheet to a combination of agent station conversions, strategic tuck in acquisitions. And stock buyback.
Looking ahead, we will remain focused on delivering profitable growth through a combination of organic and acquisition initiatives and thoughtfully re levering our balance sheet through a combination of agent station conversions strategic tuck in acquisitions and stock buybacks.
Speaker 2: Through this approach, we will continue to scale our business, leveraging our best-in-class technology and extensive global network, which we believe will over time continue to deliver meaningful value for our shareholders, operating partners and the end customers that we serve.
Through this approach we will continue to scale our business leveraging our best in class technology and extensive global network, which we believe will over time continue to deliver meaningful value for our shareholders operating partners and the end customers that we serve.
Speaker 2: With that, I'll turn it over to Todd Maycumber, our Chief Financial Officer, to walk us through our detailed financial results, and then we'll open it up for some Q&A.
With that I'll turn it over to Todd make number our chief financial officer to walk us through our detailed financial results and then we'll open it up for some Q&A.
Speaker 2: Thanks, and good afternoon. Everyone today will be discussing our financial results, including adjusted net income and adjusted to the 3 and 12 months into June 30th 2020.
Thanks, Paul and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the three and 12 months ended June 32023.
Speaker 1: For the three months ended June 30th, 2023, we reported net income attributable to readjusts of $3,143,000 on $232.2 million of revenues or $0.07 per basic and $0.06 for a fully diluted share.
For the three months ended June 32023, we reported net income attributable to radiant logistics of $3 million $143000 on $232 2 million of revenues or <unk> seven per basic and six cents per fully diluted share.
Speaker 1: The three months ended June 30th, 2022. We reported net income attributable to radiant logistics of $16,748,000. On 382.9 million of revenues or 34 cents per basic and 33 cents per fully diluted.
For the three months ended June 30th 2022, we reported net income attributable to radiant logistics of $16.748 million on $382 9 million of revenues or <unk> 34 per basic and <unk> 33 per fully diluted share.
Speaker 1: This represents a decrease of approximately 13,000,605 dollars of net income. Over the comparable prior year for 81.2
This represents a decrease of approximately $13 million $605000 of net income over the comparable prior year or <unk> 81, 2%.
Speaker 1: For adjusted net income, we reported $6,456,000 for the three months ended June 30, 2023, compared to adjusted net income of $19,188,000 for the three months ended June 30, 2020.
For adjusted net income, we reported $6 million $456000 for the three months ended June 30th 2023, compared to adjusted net income of $19 million $188000 for the three months ended June 32022.
Speaker 1: This represents a decrease of approximately 12,732,000 dollars or approximately.
This represents a decrease of approximately $12 million $732000 or <unk>.
<unk> thousand 66, 4%.
Speaker 1: For adjusted EBITDA, we reported $9,207,000 for the three months ended June 30, 2023, compared to adjusted EBITDA of $26,383,000 for the three months ended June 30, 2021 EBITDAellect whil
For adjusted EBITDA, We reported $9 million $207000 for the three months ended June 32023, compared to adjusted EBITDA of $26.383 million for the three months ended June 32022.
Speaker 1: This represents a decrease of approximately $17,176,000, or approximately 65.1%....
This represents a decrease of approximately $17 million $176000 or approximately 65, 1%.
Moving along to the 12 month results.
Speaker 1: For the 12 months ended June 30th, 2023, we reported net income attributable to radiant logistics of $20,595,000 on $1,085,000,000 of revenues, or 43 cents per basic and 42 cents per fully dilute.
For the 12 months ended June 32023, we reported net income attributable to radiant logistics of $20 million $595000 on $1 billion $85 million of revenues or <unk> 43 per basic and <unk> 42 cents per fully diluted share.
Speaker 1: For the 3 months ended June 30th, 2022, we reported net income attributable to rate and logistics of $44,464,000 on 1,459,000,000 of revenues for 90 cents per basic and 80 cents for 60 cents per basic.
For the three months ended June 30th 2022, we reported net income attributable to rail logistics of $44 million $464000 on $1.459 billion of revenues.
90 per basic and <unk> 88 cents per fully diluted share.
Speaker 1: This represents a decrease of approximately 23,000,000,000,000,000,000 over the comparable prior year period. Or 53.7.
This represents a decrease of approximately $23 million $869000 over the comparable prior year period or 53, 7%.
Speaker 1: For just net income, we reported $39,301,000 for the 12 months into June 30, 2023, compared to just net income of $58,246,000 for the 12 months into June 30, 2022.
Our adjusted net income we reported $39 million $301000 for the 12 months ended June 32023, compared to adjusted net income of $58 million $246000 for the 12 months ended June 32022.
Speaker 2: This represents a decrease of approximately 18,945,000 dollars. Or approximately 32.
This represents a decrease of approximately $18 million $945000 or approximately 32, 5%.
Speaker 2: For Jesse Dibbida, we reported $55,638,000 for the 12 months ended June 30, 2023, compared to Jesse Dibbida of $80,918,000 for the 12 months ended June 30, 2020.
For adjusted EBITDA, We reported $55 million $638000. The 12 months ended June 30th 2023, compared to adjusted EBITDA of $80 million and $918000 for the 12 months ended June 32.
2022.
Speaker 2: This represents a decrease of approximately 25,000,280,000. Or approximately 31.5%
This represents a decrease of approximately $25 million $280000 or approximately 31, 2%.
Speaker 1: With that, I will turn the call back over to our moderator to facilitate the Q&A.
With that I will turn the call back over to our moderator to facilitate the Q&A from our callers.
Speaker 2: Thank you. At this time we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker 2: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
You May press star two if you'd like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment please.
We poll for questions. Once again Thats star one if you have a question or comment.
Speaker 2: Once again, that's star one if you have a question or a comment.
Speaker 2: First question comes from Jason Seidel with PD Callen. This is for Mitchell GIBLE.
The first question comes from Jason Seidl with PD Cowen. Please proceed.
Speaker 3: Thank you, operator. Vaughn, Todd, good afternoon here. Wanted to start off a little bit and look at the overall macro environment.
Thank you operator, a bond Todd.
Good afternoon here wanted to start off a little bit and look at the overall macro environment.
Speaker 3: I think you indicated you think we're off a bottom here. I guess, what are you looking at that shows we're heading into maybe a little bit of a recovery? And how should we think about radiance EBITDA, coming off of that 80 million to 50 some million, how should we think about that for the current coming fiscal year?
You indicated you think you were off a bottom here I guess you know what are you looking at.
That shows we're heading into a maybe a little bit of a recovery and how should we think about radiance EBITDA.
Coming off of that 80 to 80 million to 50 some million how should we think about that for the the current coming fiscal year.
Speaker 4: Thanks, Jason. You know, we've got a number of different data points that we're, you know, obviously watching closely and try to glean.
Thanks, Thanks, Jason.
We've got a number of different data points that we're obviously watching it closely to try to glean.
Speaker 4: you know, and looking hopefully for green shoots, you know. And so I think for us that's manifesting itself, you know.
You know in looking hopefully for Green shoots you know.
And so I think for US that's manifesting itself you know.
Speaker 4: Ever so slightly, but we're seeing it in terms of. Some of our ocean booking starting to see a little activity picking up, which is encouraging because. Ocean volumes is everyone who followed the space knows has been anemic.
Ever so slightly but we're seeing it you know in terms of some of our ocean bookings starting to see a little activity.
Picking up which is encouraging because ocean volumes as you know they ever wanted follow this space knows has been anemic.
Speaker 4: Uh, so we're seeing some, you know, a little bit of improvement there and, and, you know, kind of hopping over to the. Kind of over the road and inner mo.
So we're seeing some of you know a little bit of improvement there.
And you know kind of hopping over to the kind of.
Over the road in intermodal space you know.
Speaker 4: because of a number of reasons, I think, including loss of some larger market inference whose names I'll leave out of call, have tightened up capacity a little bit, which is gonna help the overall rate structure for the trucking community, which in turn...
Because of a number of reasons are thinking it including a loss of some larger market interest whose names I'll leave that on the call. You know have tightened up capacity, a little bit which is going to help the overall rate structure for.
The trucking community, which in turn will.
Speaker 4: likely help on the intermodal side of things as well, which although intermodal is small for us, we're still paying close attention to it and looking for some improvements on that side of things. So it's modest but positive and we haven't been able to say that recently. So I guess those are at least some of the data points around that. And then kind of back to
Likely and it.
Help on the intermodal side of things as well, which although intermodal is small for us.
We're still paying close attention to it and you know looking for some improvements on that side of things. So it's it's it's modest but positive and we haven't been able to kind of say.
Say that recently and so I guess those are at least some of the data points are around that.
Unknown Executive: Greetings. Welcome to the financial discussion for fourth fiscal quarter and year ended June 30, 2023 conference call. At this time, all participants are in a listen only mode.
And then kind of back to.
Speaker 4: kind of the earnings power of the business, I think, you know, we're always in the never ending pendulum swing, you know, it would seem and while.
Kind of the earnings power of the business I think.
Unknown Executive: A question and answer session will follow the formal presentation. If anyone should require operator assistance burning the conference, please press star zero on your telephone keypad. Please note this conference is being recorded.
We're always in the never ending pendulum swing you know it was same in.
And while.
Speaker 4: we would never have held out that $80 million was a realistic run rate, kind of normalized EBITDA number. I don't believe $9 or $10 million of EBITDA is a normalized EBITDA number for us.
We would never have held out that.
Unknown Executive: This afternoon, Bohn Crain, Radiant Logistics Founder and CEO and Radiant's Chief Financial Officer, Todd Macomber. We'll provide a general business update and discuss financial results for the company's fourth fiscal quarter and year ended June 30, 2023. Following their comments, we will open the call to questions.
$80 million was a realistic run rate kind of normalized EBITDA number.
I don't I don't believe nine or $10 million of EBITDA is a normalized EBITDA number for us.
So I think.
Speaker 4: and Jason, you know probably better than most, given all the companies that you cover and the conference you just had and all of that, but the narrative seems to have shifted in that.
Jason you know probably better than most.
Unknown Executive: This conference is scheduled for 30 minutes. This conference call may include four looking statements within the meaning 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. These forward-looking statements are subject to known and unknown risk of certainties 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.
Most giving you know all the companies that you cover in the conference you just had and all of that.
The narrative has seems to have shifted in that.
You know.
Here to fore.
Speaker 4: You know, folks were hopeful that, you know, the last half of this year, we would start to see meaningful improvement.
You know folks were hopeful that you know the last half of this year, we would start to see meaningful improvement.
Speaker 4: People now seem to be pointing to calendar 2024 and not necessarily early in calendar 2024.
People now seem to be pointing to calendar 'twenty 'twenty, four and not necessarily early in calendar 2024, So I would agree with that yes, so I, so I kind of.
Speaker 4: So I kind of, you know.
Speaker 4: I think we will do better than plus or minus $10 million a quarter on a normalized basis as we revert to the norm. But these next couple of quarters, that could well be indicative of where we're trending as we get back to...
I think we will do.
Unknown Executive: While it is impossible to identify all the factors that may cause the company's actual results or achievements to different 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 SEC filings and other public announcements, which are available on the Radiant website at www.radientdelivers.com. In addition, past results are not necessarily an indication of future performance.
Better than plus or minus $10 million a quarter on a normalized basis as we revert to the norm.
But these next couple of quarters.
That could well be indicative of where we're kind of trending as we kind of get back to.
Speaker 4: kind of quote unquote norm, which, you know,
Got it quote unquote norm.
Which you know.
Speaker 4: And my, I guess, own mental crystal ball that kind of. It's hard to articulate what the new normal is, but kind of in my mind for us, that's more in a. 50 to 60Million dollar run rate. Kind of would be in a more normalized environment as we kind of find our way back to. Normal so that's what I would kind of. Expect us to kind of work our way back to on a normalized basis.
And my I guess own mental crystal ball that and kind of it's hard to articulate what the new normal is but kind of in my mind for us that's more than a $50 million to $60 million run rate got it would be in a more normalized environment as we kind of find our way back to.
Bohn Crain: Now, I'd like to pass the call over to Radiant's founder and CEO Bon Crane. Thank you, John. Good afternoon, everyone, and thank you for joining in on today's call. Our results for the quarter and year-end at June 30, 2023 continue to reflect the macro economic effects of the difficult freight markets on the entire transportation sector as well as our own operations. The confluence of shippers continuing to manage through elevated inventories, reduced imports, and a slowing economic growth has had a cascading effect across virtually every mode of transportation. As in the prior quarter, these market conditions have negatively impacted not only our current results, but also the year-over-year comparison to our record results from the prior year period.
Normal.
So that's what I would.
Expect us to kind of work our way back to on a normalized basis.
Speaker 4: Then I would be remiss to not just call out as we try to. Thank you for listening and going out and a questions and
And then I would be <unk>.
Remiss to not just kind of call out as we.
Try to pick out a tee up.
Speaker 4: in our press releases, we have literally a completely unlevered balance sheet at this point in time.
In our press releases, we have literally a completely unlevered balance sheet at this point in time and so we're we're optimistic.
Speaker 4: and that this is a really good time and opportunity for us. We've, through this cycle, have been very conservative and cautious, and we've played a lot of defense to have an opportunity to play offense, right? And so,
And you know that this is a really good time and opportunity for us we've.
Through this cycle had been you know very.
Conservative and cautious and we add.
We played a lot of defense you know to have an opportunity to play offense right and so.
Bohn Crain: With that said, we believe we are at or near the bottom of the cycle, and we would expect markets to begin to find their way to more sustainable and normalized levels in coming quarters. And while our results are down comparatively, I view the fact that we generated over $9 million in adjusted EBITDA for the quarter in this very difficult market as a positive indicator for Radiant and our prospects as we continue through this cycle.
Speaker 4: Given the right opportunities, we would expect to relever our balance sheets and we think there's a lot of upside for us and our shareholders in terms of where we are and where we're going.
Given the given the right opportunities, we would expect to re lever our balance sheets, and we think theres a lot of upside for us and our shareholders in terms of where we are and where we're going from here.
Speaker 3: Well, you really kind of walked into my next line of questioning here, Bond, you know.
Well you you you really kind of walked into my next line of questioning here a bond.
Speaker 3: As we think about acquisitions for Radiant, you know, historically, you know, you did a lot of sort of agent conversions and those were small enough where you didn't have a lot of competition. I guess, what does the current economic situation look like for the agent conversions to start happening again? And, you know, are you in a much better position for potentially acquisitions that are larger than that? You know, those that might, you know,
As we think about acquisitions for Radiant you know historically you know you you did a lot of sort of agent conversions and end.
Bohn Crain: In addition, and as we pointed out in the press release, we delivered a record $97.9 million in cash from operations for our fiscal year at June 30, 2021. 23. During the same period, we have remained relatively quiet on the acquisition front and have instead focused our attention on paying down debt and deploying just over $11 million to repurchase our stock. Through this discipline, approach to capital allocation, it is fair to say that we are in the strongest financial position in the company's history and as of June 30, 23, we have approximately $32.5 million of cash on hand and nothing drawn on our $200 million credit facility.
And those were small enough where you didn't have a lot of competition I guess what is the current economic situation look like for the agent conversions.
To start happening again, and you know are you in a much better position for potentially acquisitions that are larger than that.
That might you know.
Speaker 3: exceed 5 million to give it just because it's become a lot harder to finance these acquisitions for some of the maybe the financial backed players versus somebody who's very unlevered such as yourself. And then the quick follow-up to that is where are you comfortable having your leverage at in the future for the right acquisition.
Exceed $5 million of EBITDA.
Just because it's become a lot harder to to finance these acquisitions for some of the maybe the financial backer players versus somebody who's very unlevered, such as yourself and then the quick follow up to that is we.
Where are you comfortable having your leverage at in the future for the right acquisition.
Speaker 3: There's a lot in there. I'm not necessarily going to take those in order, but let me just try to pick them off as they're coming to me here. I think we would think of normalized leverage of being plus or minus two-and-a-half times. If we were modeling. alternative copyright
Okay. So theres a lot in there let me I'll kind of.
Bohn Crain: Having fortified our balance sheet, we believe we are well positioned to navigate to the slower freight markets as we find our way back to more normalized market conditions. At the same time, we believe our patient and discipline may be rewarded as market conditions become more conducive to our acquisition strategy. And we have ample drive powder to become more active on the acquisition front should the opportunity present itself.
Well I'm not going to I'm not necessarily going to take those in order I will take it but let me just try to pick them off as they are coming to me here I think we would think of normalized leverage of being plus or minus two and a half times.
If we were kind of modeling.
Speaker 4: You know, for ourselves over the longer term, so that's kind of where we would think of that number.
For ourselves over the longer term, so that's kind of where we would think of that number.
You know as we.
Speaker 4: And I'm sure everybody's facts and circumstances are a little bit different. So I'm going to paint with a bit of a broad brush here, but it's at least my perception that a lot of companies were levered up and expecting the go go days to last longer than they have. And as markets have retraced and come in.
Bohn Crain: Looking ahead, we will remain focused on delivering profitable growth through a combination of organic and acquisition initiatives and thoughtfully re-levering our balance sheet through a combination of agent station conversions, strategic tuck-in acquisitions and stock buybacks. Through this approach, we will continue to scale our business leveraging our best in class technology and extensive global network which we believe will over time continue to deliver meaningful value for our shareholders, operating partners and the end customers that we serve.
And you know.
I'm sure everybody's facts and circumstances are a little bit different so I'm going to paint with a bit of a broad brush here, but it's at least my perception that a lot of companies were levered up and expecting that Gogo days. The last you know longer than they have and as the markets have retraced and come in.
Speaker 4: They're either in conversations with their bankers about covenant compliance.
They're either.
Conversations with our bankers about covenant compliance.
Speaker 4: or at a minimum, they're tapped out and kind of go into part of your question.
Or at a minimum there they're tapped out in and kind of go into that part of your question.
Speaker 4: some of the folks who might naturally be a quiz.
Todd Macomber: With that, I'll turn it over Todd Maycomber, our chief financial officer, to walk us through our detailed financial results and then we'll open it up for some Q&A. Thanks, Bon. Good afternoon, everyone. Today we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the three and 12 months in the June 30th, 2023. For the three months in the June 30th, 2023, we reported net income attributable to radiate logistics of $3,143,000 on $232.2 million of revenues for seven cents per basic and six cents per fully diluted share.
Some of the folks who might naturally be acquisitive.
Speaker 4: in the marketplace, they're tapped out under their current credit facilities, and the debt markets aren't necessarily friendly right now.
And the marketplace. They are capped out under their current credit facilities and they are really either.
The debt markets arent.
Arent necessarily friendly right now so.
Speaker 4: Platform type companies would be pretty reluctant, all things being equal to kind of go open up their credit facility to create more capacity because they, they're not going to be able to replicate their existing deal. In today's market environment, so I think there'll be.
Platform type companies would be pretty reluctant all things being equal to kind of go open up their credit facility to create more capacity, because they're not going to be able to replicate their existing deal and.
In today's market environment, So I think there'll be.
Speaker 4: You know, there's a lot of people on the sidelines are more than kind of normal. Kind of given some of those dynamics, so there's. Less, you know.
There's a lot of people on the sidelines or more than kind of normal.
Todd Macomber: For the three months ended, June 30th, 2022, we reported net income attributable to radiate logistics of $16,748,000 on $382.9 million of revenues for 34 cents per basic and 33 cents per fully diluted share. This represents a decrease in approximately $13 million, $605,000 of net income for the comparable prior year for 81.2%. For adjusted net income, we reported $6,456,000 for the three months in the June 30th, 2023, compared to just net income of $19,188,000 for the three months ended June 30th, 2022.
Kind of given some of those dynamics. So there is.
Less they're less.
Speaker 4: people that are actionable and people who have been on these calls over the years know I talk a lot about or historically talked about the premium we assign to be actionable, to preserving our financial flexibility to be actionable. So here we are.
People that are actionable and people who have been on these calls over the years, though I talk a lot about our historically talked about the premium we assign to be an actionable to preserving our financial flexibility to be actionable well.
So here we are right so.
Speaker 4: Again, this doesn't mean we're going to be.
Again this doesn't mean, we're going to be you know.
Speaker 3: outgoing crazy by any stretch, we're going to continue to follow our same disciplined approach. But I think in this environment, we're going to have an opportunity to put some points on the board following our...
Outgoing crazy by any stretch you know we're going to continue to follow.
All of our same disciplined approach, but I think in this environment, we're going to have an opportunity to put some points on the board following our disciplined approach.
Todd Macomber: This represents a decrease in approximately $12,732,000 for approximately 66.4%. For adjusted EBITDA, we reported $9,207,000 for the three months ended June 30th, 2023, compared to a adjusted EBITDA of $26,383,000. $1,000 to the three months in June 30, 2022. This represents a decrease for approximately $17,176,000 or approximately 65.1%.
Speaker 4: I see you're in a good position for sure. Yeah. But at the same time, even as we look at larger deals, they're still going to have to stand up to our alternative use of capital, which is buying back our stock, which continues to remain an attractive use of capital.
And so I'd say you're in a good position for sure yeah.
But at the same time as we even as we look at larger deals there.
They are still going to have to.
Stand up to kind of our alternative use of capital, which is buying back our stock which continues to remain an attractive use of capital for us.
Speaker 3: And then coming back to your first question, we have always and remain at the ready to support our agent stations to convert them to a company owned store when and if they're ready. So it's really never been a question of our interest or financial wherewithal or access to capital or any of that kind of stuff. We're here to support our partners on their timeframes when.
And then kind of I think I mean, that's.
Coming back to your first question.
We all we have always and remain.
Todd Macomber: Moving along to the 12 month results, but at 12 months in June 30, 2023, we reported net income, attributable to Radiant logistics of $20,595,000 on $1,085,000 of revenues, or 43 cents per basic and 42 cents per fully diluted share. For the three months in June 30, 2022, we reported net income attributable to Radiant logistics of $44,464,000 on $1,459,000 of revenues, or 90 cents per basic and 88 cents per fully diluted share.
At the ready to support our agent stations to convert them to a company owned store when Theyre ready. So it's really never been a question of our interest or financial wherewithal, our access to capital or any of that kind of stuff. We're here to support our partners.
On their timeframes when they're ready.
Speaker 3: And with that said, just biologically, none of us are getting any younger. And so the demographic of our agent-based network is aging out. And so that opportunity set has always been there, but I think that the rate and opportunity for conversion will not fail. One that you as always will comment on next week's about two weeks after conversion and this is an initiative that assure
And with that said just biologically none of us are getting any younger and so the demographic of our agent based network is aging out.
And so the kind of that opportunity set has always been there, but but I think the rate and the opportunity for conversion.
Todd Macomber: This represents a decrease of approximately $23,869,000 over the comparable prior year period, or 53.7%. For just net income, we reported $39,301,000 for the 12 months in June 30, 2023, compared to just net income of $58,246,000 for the 12 months in June 30, 2022. This represents a decrease of approximately $18,945,000 for approximately 32.5%. For just net income, we reported $55,638,000 for the 12 months in June 30, 2023, compared to just net income of $8,918,000 for the 12 months in June 30, 2022. This represents a decrease of approximately $25,280,000 for approximately 31.2%.
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Speaker 3: continue to accelerate just because of Father Time.
Continue to accelerate just because of all the time.
Speaker 4: That makes sense. It sounds like you're in a good position for both sides of the equation there. Real quickly, on the non-agent, the more the platform acquisitions, what are you seeing in terms of the multiples? Are they starting to come in?
That makes sense it sounds like you're in a good position for both sides of the equation there real quickly on the on the non agent, but more of the platform acquisitions. What are you seeing in terms of the multiples or are they starting to come in a bit.
Speaker 3: Yeah, they, you know, I don't want to get too far out over my skis there, but the short answer is yes. That's certainly been the case, you know, and.
Yes.
I don't want to get too far out over my skis, there, but the short answer is yes.
That's certainly been the case.
Okay.
Speaker 3: Just to kind of call it out, you know, we've, you know, we've ended up passing on a number of deals over the years because people were wanting, you know, a higher portion of.
Just to kind of call it out.
We've ended up passing on a number of deals over the years because people were wanting you know a higher portion of.
Speaker 3: cash rather than earnouts and because of market dynamics.
Cash rather they earn out rather than earn outs and because we've got a market dynamics.
Uh huh.
Speaker 3: We ended up passing on some deals because we just couldn't find a meeting of the minds with sellers around the earn-out structure. In this environment, as we're talking to more sellers, people are more willing to accept the idea of selling.
We ended up passing on some deals because we.
We just couldn't find a meeting of the minds with sellers around the earn out structure well in this environment as we're talking to more sellers people or more.
Willing to accept that.
Unknown Executive: With that, I will turn the call back over to our moderator to facilitate any Q&A more callers. Thank you.
Speaker 3: aspect of the structure in part because of the market competition and just who's in the marketplace. But also, it's just been a rollercoaster ride in terms of economic cycle and peaks and valleys, and what is normal and how do you value businesses in this environment.
Aspect of the structure.
In part because of market competition, and just kind of who's in the marketplace, but also it's just been a you know.
Unknown Executive: At this time, we will be conducting a question and answer session. One moment, please. What we pull for questions. Once again, let's star 1 if you have a question or a comment.
It's been a relative Mr. Ryan in terms of the economic cycle and peaks and valleys in what is normal and how do you value businesses in this environment.
You know it's.
Yes.
It's.
Speaker 3: kind of acknowledging or kind of embracing an earn-out structure makes all of that.
You kind of acknowledging or kind of.
Embracing an earn out structure makes all of that.
Speaker 3: more digestible from our side as an aquar.
You know more digestible.
From our side as an acquirer.
Speaker 4: Makes sense. Well, listen, I appreciate the time. As always, I'll turn it over to somebody else.
No it makes sense well listen I appreciate the time as always I'll turn it over to somebody else.
Jason Seidl: First question comes from Jason Sidel with TD Cowan. Please proceed. Thank you, operator.
Thank you.
Yes.
Speaker 2: Thank you. Ladies and gentlemen, if you have a question or a comment, please indicate so now by pressing star 1 on your touch tone phone. Once again, that's star 1 if you have a question or a comment.
Thank you.
Ladies and gentlemen, if you have a question or a comment. Please indicate so now by pressing star one on your Touchtone phone once again Thats Star one if you have a question or comment.
Bohn Crain: Bon Todd, good afternoon here. I wanted to start off a little bit and look at the overall macro environment. I think you indicated you were off the bottom here. What are you looking at that shows we are heading into a little bit of a recovery. And how should we think about radiance, EBITDA coming off of that 80 to 80 million to 50 some million. How should we think about that for the current coming?
Okay. It looks like we have no further questions in queue.
Speaker 2: I'd like to turn the floor back to management for any closing remarks.
I'd like to turn the floor back to management for any closing remarks, alright. Thanks John .
Speaker 3: All right, thanks, John , 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.
Bohn Crain: Collier. Thanks, Jason. You know, we've got a number of different data points that we're, you know, obviously watching closely to try to glean, you know, and looking hopefully for green shoots, you know, and so I think for us, that's manifesting itself, you know, ever so slightly, but we're seeing it, you know, in terms of some of our ocean booking, starting to see a little activity picking up, which is encouraging, because ocean volumes is, you know, everyone who follow the space knows, has been anemic.
Let me close by saying that we remain optimistic about our prospects and opportunities to continue to leverage our best in class technology Robo.
Robust North American footprint.
Speaker 3: extensive global network of service partners to continue to build on the great platform we've created here at Radium.
An extensive global network of service partners to continue to build on the great platform. We've created here at radiant.
Speaker 3: At the same time, we intend to thoughtfully re-lover our balance sheet into a combination of agent-station conversion.
At the same time, we intend to thoughtfully re lever our balance sheet and through a combination of agent station conversions synergistic tuck in acquisitions and stock buybacks.
Speaker 3: synergistic tuck-in acquisitions, and stock buybacks.
Speaker 3: Through our multi-pronged approach of organic growth, acquisitions, 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.
Through our multi pronged approach of organic growth acquisitions and stock buybacks. We believe we will continue to create meaningful value for our shareholders operating partners and the end customers that we serve.
Bohn Crain: So we're seeing some, you know, a little bit of improvement there. And, and, you know, kind of hopping over to the kind of over the road and intermodal space, you know, you know, because of a number of reasons, I think, including loss of some larger market inference whose names I'll leave out of call, you know, have tightened up capacity a little bit, which is, you know, kind of healthy overall rate structure for the trucking community, which in turn will, you know, likely, and you know, help on the intermodal side of things as well, which, you know, although intermodal is small for us, you know, we're still paying close attention to it and, you know, looking for some improvements on that side of things.
Thanks for listening and your support of Radiant logistics.
Speaker 2: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Bohn Crain: So it's, it's modest but positive, and we haven't been able to kind of say that recently. And so I get those early, some of the data points are around that. And then kind of back to kind of the earnings power of the business, I think, you know, we're, we're always in the never ending pendulum swing, you know, it would seem and, and, and while we, we would never have held out that, you know, 80 million dollars was a realistic run rate kind of normalized EBITDA number, you know, I don't, I don't believe nine or ten million dollars of EBITDA is a normalized EBITDA number for us.
Bohn Crain: So, you know, I think in Jason, you know, probably better than most giving, you know, all the companies that you cover and the conference you just had and all of that, that the narrative has seems to have shifted in that, you know, here to four, you know, folks were hopeful that, you know, the last half of this year, we would start to see meaningful improvement. People now seem to be pointing to calendar 2024 and not necessarily early in calendar 2024.
Bohn Crain: So yeah, so I, so I kind of, you know, I think we will do kind of better than plus or minus ten million dollars a quarter on a normalized basis as we refer to the norm, but these next couple of quarters, you know, that could well be indicative of where we're kind of trending as we kind of get back to, kind of quote unquote norm, which, you know, and, and my, I guess, own mental crystal ball, that kind of, it's hard to articulate what the new normal is, but kind of in my mind, for us, that's more in a 50 to 60 million dollar run rate kind of would be in a more normalized environment as we kind of find our way back to normal. So that's what I would kind of expect us to kind of work our way back to on a normalized basis, and then I would be remiss to not just kind of call out as we try to kind of tee up in our press releases.
Bohn Crain: We have literally a completely unlevered balance sheet at this point in time. And so we're, you know, we're optimistic and, you know, that this is a really good time and opportunity for us. We've, you know, through this cycle have been, you know, very conservative and cautious and we had, you know, we've played a lot of defense, you know, to have an opportunity to play offense, right? And so given the given the right opportunities, you know, we would expect to relever our balance sheets and we think there's a lot of upside for us and our shareholders in terms of where we are and where we're going from here.
Bohn Crain: Well, you really kind of walked into my next line of questioning here, Bond, you know, as we think about acquisitions for Radiant, you know, historically, you know, you did a lot of sort of agent conversions and those were small enough where you didn't have a lot of competition. I guess what does the current economic situation look like for the agent conversions to start happening again? And, you know, are you in a much better position for potentially acquisitions that are larger than that?
Bohn Crain: You know, those that might, you know, exceed 5 million to be but, just because it's become a lot harder to finance these acquisitions for some of the, maybe, the financial back to players versus somebody who's very unlevered such as yourself and then the quick fall up to that is where are you comfortable having your leverage at in the future for the right acquisition? Okay, so there's a lot in there. Let me, I'll kind of make, well, I'm not necessarily going to take those in order.
Bohn Crain: I'll take, but let me just try to pick them off as they're coming to me here. I think we would think of normalized leverage of being plus or minus two and a half times. You know, if we were kind of modeling, you know, for ourselves over the longer term. So that's kind of where we would think of that number. You know, as we, and you know, I'm sure everybody's facts and circumstances are a little bit different.
Bohn Crain: So I'm going to paint with a bit of a broad brush here, but it's at least my perception that a lot of companies were levered up and expecting the go-go days to last, you know, longer than they have. And as the markets have retraced and come in, they're either, you know, in conversations with their bankers about selling a compliance or at a minimum, they're tapped out and kind of going that part of your question.
Bohn Crain: Some of the folks who might naturally be a quisitive in the marketplace, they're tapped out under their current credit facilities and they're really, you know, the death markets aren't necessarily friendly right now. So, you know, platform type companies would be pretty reluctant. All things being equal to kind of go open up their credit facility to create more capacity because they they're not going to be able to replicate their existing deal in today's market environment.
Bohn Crain: So I think there'll be You know, there's a lot of people on the sidelines are more than kind of normal kind of given some of those dynamics. So there's less, you know, there's less people that are actionable and people who've been on these calls over the years. Now I talk a lot about our historically talked about the premium we assign and to be in actionable, you know, to preserving our financial flexibility to be actionable.
Bohn Crain: Well, so here we are, right? So again, this doesn't mean we're going to be, you know, going crazy by any stretch, you know, we're going to continue to, you know, follow our same discipline approach, but I think in this environment, we're going to have an opportunity to put some points on the more following our discipline approach. And so I say you're in a good position for sure. You know, but at the same time as we, you know, even as we look at larger deals, you know, they're still going to have to stand up to kind of our alternative use of capital, which is buying back our stock, you know, which continues to remain an attractive use of capital for us.
Bohn Crain: And then kind of coming back to your first question, you know, we all we have always and and remain, you know, at the ready to support our agent stations to convert them to a company on store when and if they're ready. So it's really never been a question of our interest or financial where with all or access to capital or any of that kind of stuff. We're here to support our partners on their time frames when they're ready.
Bohn Crain: And with that said, just, you know, biologically, none of us are getting any younger. And so the demographic of our agent based network is aging out. And so the kind of that opportunities set has always been there, but, but I think that the rate and opportunity for conversion will continue to accelerate just because of other time. That makes sense. It sounds like you're in a good position for both sides of the equation there.
Bohn Crain: Real quickly on the on the non agent, the more the platform acquisitions, what are you seeing in terms of the multiples? Are they starting to come in a bit? Yeah, they say, you know, I don't want to get too far out over my skis there, but the short answer is yes. That that's certainly been the case. You know, and just to kind of call it out, you know, we've, you know, we've ended up passing on a number of deals over the years because people were wanting, you know, a higher portion of cash, you know, rather the earn out, rather than earn outs and because of kind of market dynamics.
Bohn Crain: You know, we ended up passing on some deals because we, you know, we just couldn't find a meeting of the minds with sellers around the earn out structure. Well, and this environment as we're talking to more sellers, people are more, you know, willing to accept that aspect of the structure, you know, in, you know, and part because of market competition and just kind of who's in the marketplace. But also it's just been a, you know, it's been a roller coaster ride in terms of economics, cycle and peaks and valleys and what is normal and how do you value businesses in this environment?
Bohn Crain: You know, it's, you know, it's, is kind of acknowledging or kind of embracing an burnout structure makes all of that, you know, more digestible, you know, from our side as an acquirer. Now it makes sense. Well, listen, I appreciate the time as always. I'll turn it over to somebody else. Thank you. Thank you, ladies and gentlemen. If you have a question or a comment, please indicate so now by pressing star one on your touch tone phone. Once again, that's star one. If you have a question or comment.
Unknown Executive: Okay, it looks like we have no further questions in queue.
Bohn Crain: I'd like to turn the floor back to management for any closing remarks. All right. Thanks, John.
Bohn Crain: 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, an extensive global network of service partners to continue to build on the great platform we've created here at Radiant. At the same time, we intend to thoughtfully relever our balance sheet and through a combination of agitation conversions, synergistic tucking in acquisitions and stock buybacks. Through our multi-pronged approach of organic growth acquisitions and stock buybacks, we believe we will continue to create meaningful value for our shareholders operating partners and the end customers that we serve.
Bohn Crain: Thanks for listening and your support of Radiant logistics.
Unknown Executive: This concludes today's conference and you may disconnect your lines at this time.
Unknown Executive: Thank you for your participation.