Q2 2024 Radiant Logistics Inc Earnings Call
Operator: Good afternoon, everyone. This afternoon, Bon Crane, Radiant Logistics' founder and CEO, and Radiant's Chief Financial Officer, Todd Maycomber, will provide a general business update and discuss financial results for the company's second fiscal quarter and six months ended December 31st, 2023. Following their comments, we will open the call to questions. This conference call is scheduled for 30 minutes.
Good day everyone.
This afternoon, Bohn Crain, Radiant logistics, founder and CEO and Radians, Chief Financial Officer, Todd Macomber may come or sorry will provide a general business update and discuss financial results for the company's second fiscal quarter and six months ended December 31st 2000.
'twenty three.
Following their comments, we will open the call to questions.
This conference is scheduled for 30 minutes.
Operator: This conference may include forward-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 risks, uncertainties, and assumptions about the company that may cause the company's actual results or achievements to be materially different from the results or achievements expressed or implied by such forward-looking statements. While it is impossible to identify all the factors that may cause the company's actual results or achievements to differ materially from those set forth in our forward-looking statements,
This conference May include forward 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 risks uncertainties and assumptions about the company that may cause the company's actual results or achievements to be materially different from the results or achievements expressed or implied by such forward looking statements.
While it is impossible to identify all the factors that may cause the company's actual results or achievements to differ materially from those set forth in our forward looking statements.
Operator: 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. In addition, past results are not necessarily an indication of future performance. Now, I'd like to pass the call over to Radiant's founder and CEO, Bon Crane. Sir, the floor is yours.
Such factors include the.
Those that have in the past I may in the future be identified in the company's SEC filings.
Other public announcements, which are available on the radiant website at Www Das Radiant delivers dotcom.
In addition, past results are not necessarily an indication of future performance.
I would like to pass the call over to radians, founder and CEO, Bob Kramer, Sir the floor is yours.
Bon Crane: Thank you, Alex. Good afternoon, everyone, and thank you for joining in on today's call. Our results for the quarter ended December 31, 2023, continue to reflect the difficult freight markets being experienced by the entire industry, as well as our operations. This extended period of weak freight demand combined with excess capacity continues to negatively impact not only our current results but also the year-over-year comparison to our record results for the prior year. With that said, we remain optimistic that we are at or near the bottom of the cycle, and we would expect markets to begin to find their way to Notwithstanding the tough year-over-year comparisons, we continue to deliver meaningfully positive results and have generated $16.9 million in adjusted EBITDA and $12.1 million in cash from operations for the six months ended December 31, 2020. In addition, we continue to enjoy a strong balance sheet, finishing the quarter with approximately $33 million of cash on hand and nothing drawn on our $200 million credit.
Thank you Alan.
Good afternoon, everyone and thank you for joining in on today's call.
Our results for the quarter ended December 31 2023.
Can you do reflect the difficult freight markets.
<unk> by the entire industry as well as our operations.
This extended period of weak freight demand combined with excess capacity.
Tenuous to negatively impact not only our current results, but also the year over year comparison to our record results for the prior year period.
With that said, we remain optimistic that we were at or near the bottom of the cycle and we would expect markets to begin to find their way to more sustainable normalized levels towards the back half of calendar 'twenty four.
Notwithstanding the tough year over year comparisons, we continue to deliver meaningfully positive results and have generated $16 9 million in adjusted EBITDA and $12 1 million in cash from operations for the six months ended December 31 2023.
In addition, we continue to enjoy a strong balance sheet, finishing the quarter with approximately $33 million of cash on hand, and nothing drawn on our $200 million credit facility.
Bon Crane: As previously discussed, we believe we are well-positioned to navigate through these slower freight markets as we find our way back to more normalized markets. At the same time, we remain focused on delivering profitable growth through a combination of organic and acquisition initiatives and thoughtfully refinancing our balance sheet through a combination of agent station conversions, synergistic tuck-in acquisitions, and stock buyback. Through this approach, we believe over time we will continue to deliver meaningful value for our shareholders, operating partners, and the end customers that we serve. In this regard, we are very excited about our recent agent-station convergence with the acquisition of Delray and the select business, which will combine, and solidify our offering in support of the cruise line and South Florida. We launched Radiant in 2006 with the goal of partnering with logistics entrepreneurs who would benefit from our unique value proposition and the built-in exit strategy available to the entrepreneurs participating in our network.
As previously discussed we believe we are well positioned to navigate through these slower freight markets as we find our way back to more normalized market conditions.
At the same time, we remain focused on delivering profitable growth.
A combination of organic and acquisition initiatives and thoughtfully re levering our balance sheet through a combination of agent station conversions synergistic tuck in acquisitions and stock buybacks.
Through this approach we believe over time, we will continue to deliver meaningful value for our shareholders operating partners and the end customers that we serve.
In this regard we are very excited about our recent agent station converges with the acquisition of del Rey in the select businesses, which will combine.
Solidify our offering in support of the cruise line industry in South Florida.
We launched radian in 2006 with a goal of partnering with logistics entrepreneurs, who would benefit from our unique value proposition and a built in exit strategy available to the entrepreneurs participating in our network.
Todd Maycomber: We believe these two transactions are representative of a broader pipeline of opportunities inherent in our agent-based network, and we look forward to supporting other strategic operating partners when they are ready to begin their transition from an agency to company-owned locations. With that said, I'll now turn it over to Todd Maycomber, our CFO, to walk us through our detailed financial results, and then we'll open it up for some Q&A. Thanks, Paul, and good afternoon, everyone. Today, we will be discussing our financial results, including just net income, and Justin Iveda for the three and six months. December 31st, For the three months ended December 31st, 2023, we reported net income attributable to Radiant, which is $985,000 on 201 point million of revenue. Two sets per basic until it's loose.
We believe these two transactions are representative of a broader pipeline of opportunities inherent in our agent based network and we look forward to supporting other strategic operating partners. When they are ready to begin their transition from an agency to company owned location.
With that said I'll now turn it over to Todd made number our CFO to walk us through our detailed financial results and then we'll open it up for some Q&A.
Thanks, Paul and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income and just EBITDA.
Three and six months ended December 31 2023.
For the three months ended December 31.
31, 2023, we reported net income attributable to radiant logistics of $985000 on $201 million of revenues or <unk> <unk> per basic share.
Todd Maycomber: For the three months ended December 31st, 2022, we reported net income attributable to Radiant Logistics of $4,836,000, 178.1 million of revenues, or 10 cents per basic utility. This represents a decrease of approximately $3,851,000 of net income over the comparable prior year period, or $79,000. For adjusted net income, we reported $5,496,000 for the three months into December 31, 2023, compared to adjusted net income of $11,142,000 for the three-month period ending December 31. This represents a decrease of approximately $5,646,000 for approximately $50.7 million. For Jesse Dibbida, we recorded $7,708,000 for the three months ended December 31, 2023, compared to $16,203,000 for the three months ended December 31, 2021.
The three months ended December 31, 2022, we reported net income attributable to reading logistics of $4 million $836000 on $271 million of revenues or 10 cents per basic and fully diluted share.
This represents a decrease of approximately $3.851 million of net income over the comparable prior year period were 79, 6%.
For adjusted net income, we reported $5 million and $496000 for the three months ended December 31, 2023 compared to adjusted net income of $11.142 million for the three months ended December 31 2022.
This represents a decrease of approximately $5 million $646000 or approximately 57%.
For adjusted EBITDA, we reported $7 million $708000.
Three months ended December 31, 2023, compared to adjusted EBITDA of $16 $203000 for the three months ended December 31 2022.
Todd Maycomber: This represents a decrease of approximately $8,495,000 or approximately $52.5 million. And Jason Seidl. Thank you. Thank you. Moving on, to the six-month results. For the six months ended December 31, 2023, we reported net income attributable to Radiant Logistics of $3 million, $607,000 on 411.9 million of revenues, or $0.08 per basic and $0.07 for fully diluted water. For the six months ended December 31, 2022, we reported net income attributable to Radiant Logistics of $13,269,000. 609.1 million in revenues, or $0.27 per basic insolvency. This represents a decrease of approximately $9,662,000 over the comparable prior year period of 72 months. For Adjusted Net Income, we reported $12,046,000 for the six months ended September 31, 2023, compared to Adjusted Net Income of $24,000,000. $621,000 for the six months ended December 31, 2022.
Prison represents a decrease of approximately $8 million $495000 or.
Approximately 52, 4%.
Yeah.
Moving along to the six month results for the six months ended December 31, 2023, we reported net income attributable to radiant logistics, a $3 million $607000 on $411 9 million of revenues or eight cents per basic and seven cents per fully diluted share.
For the six months ended December 31, 222, we reported net income attributable to reading logistics of $13 million $269000 on $609 1 million of revenues or <unk> 27 per basic and fully diluted share.
This represents a decrease of approximately $9 million $662000 over the comparable prior year period for 72%.
For adjusted net income, we reported $12 million and $46000 for the six months ended December 31, 2023, compared to adjusted net income of $24 million $621000.
Six months ended December 31, 2022.
Operator: This represents a decrease of approximately $12,575,000, or approximately $51.1 billion. For Justin Ibadat, we reported $16,873,000 for the six months ended December 31, 2023, compared to Justin Ibadat of $34,871,000, was six months in December 31, 2022. This represents a decrease of approximately $17,998,000, or approximately $51.6 million. With that, I will turn the call back over to our moderator to facilitate any Q&A. Thank you. At this time, we will be conducting our 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 busy. You may press star 2 if you would like to remove your question from the list. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.
This represents a decrease of approximately $12 million $575000 or approximately 51, 1%.
For adjusted EBITDA, We reported $16 million $873000 for the six months ended December 31, 2023, compared to adjusted EBITDA of $34 million $871000.
The six months ended December 31 2022.
This represents a decrease of approximately $17 million $998000 for approximately 51, 6%.
With that I will turn the call back over to our moderator to facilitate any Q&A from our callers.
Thank you at this time, we will be conducting our question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue.
And for participants using speaker equipment it.
May be necessary to pick up your handset before pressing the star keys one.
Operator: One moment, please, while we pull for questions. Thank you. Our first question is coming from Jason Seidl with TD Koehn. Your line is open.
One moment, please while we poll for questions.
Thank you.
Our first question is coming from Jason Seidl with TD currently your line is live.
Jason H. Seidl: Thank you, operator. Good afternoon, Bon and Todd. A couple questions for me, guys. If I stick with the acquisitions, can you talk us through sort of what to expect from an EBITDA basis? And is there going to be any ramp-up cost to the outside private company that you onboarded, at least for the current Hello. Thanks, Jason.
Thank you operator, good afternoon, Bob and Todd.
Questions for me guys.
I stick on the acquisitions can you talk us through sort of what to expect from Oh from an EBITDA basis, and then as youre going to be any ramp up costs are to the outside private company that you on boarded at least for the current quarter.
Uh huh.
Thanks, Jason. So this is this is bond.
Bon Crane: So this is this is Bond to answer the question. I guess a couple of different ways, you know, we historically we've talked about kind of the, kind of the inherent agency stations that at some point in time along the continuum are likely to seek their exit strategies, and The rate at which that is occurring, we expect to continue to accelerate just, based upon the demographics of our of our agency network and they they can vary in size from you know just you know painting with a broad brush anywhere from you know half a million to two million dollars of incremental EBITDA to the bottom line would kind of be the tip of Profile and as a reminder to maybe some folks that aren't as familiar with the mechanics, are agency stations.
To answer the question.
I guess a couple of different ways.
Historically, we've talked about kind of the.
The.
Kind of the in the <unk>.
Inherent agencies stations that at some point in time, along the continuum or are likely to seek their exit strategies.
And the rate at which that is occurring we expect to continue to accelerate just based upon the demographics of our of our agency network and.
They they can vary in size from.
Just you know painting with a broad brush anywhere from you know.
Half a million to $2 million of incremental EBITDA to the bottom line that would be the typical profile and as a reminder to maybe some folks that aren't as familiar with the mechanics.
Our agency stations.
Bon Crane: When we buy in an agency station, that ultimately manifests itself as a margin expression defined as EBITDA divided by gross margin. So when we convert an existing agency station to a company in-store, our revenues don't increase; our gross margins really don't increase. It's just that the agency station commissions get eliminated, and we onboard their local level labor and SG&A costs, and that difference is effectively the profitability of that business that we have onboarded. So there's really no incremental cost, per se, in terms of onboarding the acquisition, and a little bit to the contrary, and we've talked about this in some of our calls in the past. In the early days when we were acquiring other agent-based networks, there were redundant back-office infrastructure costs that we were able to capture, and so that was the cost synergy.
When we buy in an agency station that ultimately manifest itself as margin expression defined as EBITDA divided by gross margin. So when we converted the existing agent station to a company owned store our revenues don't increase our gross margins really don't increase.
It's just that the agent station commissions get eliminated and we onboard their local level.
Well, you know labor and SG&A cost and that difference is effectively the profitability of that business that we have on boarded so there's really no incremental cost per se in terms of Onboarding the acquisition.
And a little bit to the contrary and we've talked about this in some of our calls in the past.
In the early days when we were acquiring other agent based networks. There was redundant back office infrastructure costs that we were able to capture so that that was the cost synergy we have a similar but slightly different opportunity at the node level of the network as we acquire in our agents.
Bon Crane: We have a similar but slightly different opportunity at the node level of the network. As we acquire in our agency stations, there'll be redundant costs. You know, two facilities as an example of various facilities.
These stations there'll be redundant costs.
Two facilities as an example of various facilities. So there should be some incremental cost synergies available to us at the node level of the network as we continue to make good on our brand promise and supporting our agent stations other exit strategies.
Bon Crane: So there should be some incremental cost synergies available to us at the node level of the network as we continue to kind of make good on our brand promise and support our agent stations on their access track over time, but, you know, it wouldn't. So, you know. We're not going to do that.
Overtime.
And.
It wouldn't.
Sure.
We're not going to do one.
Bon Crane: One of these a month, but it wouldn't surprise me if we were to do one a quarter type thing here over the next year or so, just like our network. Folks are kind of approaching the point where they're ready to ring the bell, and we're here to support them in that process as well. That makes sense. I'm sorry.
One of these a month, but it wouldn't surprise me that if we were to do.
What a quarter type thing.
Here over the next year or so just as our network.
Folks are kind of approaching the point, where they're ready to ring the bell and we're here to support them in that process as that occurs.
No that makes sense I'm I'm, sorry, I thought before that one was an agent and one was one was not.
Bon Crane: I thought before that one was an... Bon, when you take a step back and you look at the broader market on the forwarding side, you know, a lot's been going on both from the macro and geopolitical sides, you know, how is that impacting results, or how do you see that impacting results? Well, it's certainly slowed down, I think, for everyone, and, you know, I, it, it, You know, I think the general narrative is. You know, it was obviously slow through December, and I think it'll continue to be slow.
When you take a step back and you look at the broader market on the forwarding side, you know a lot's been going on both from the macro and geopolitical side.
How is that impacting results or how do you see that impacting results here in the current quarter.
Well, it's certainly slowed down I think for everyone.
And.
It is.
Yes.
I think the general narrative is.
It was obviously slow through December.
It'll continue to be slow.
Bon Crane: Relatively through the March quarter, and then, you know, I'm optimistic that we will start to see, certainly sequential improvement after that, as we kind of find our way back to some sense of normalcy. But, you know, we've got, as you alluded to, any number of kind of political or kind of geopolitical things going on, you know, and interest rates and all that, you know; there's any number of kind of headwinds, but I think. Yeah, You know, I would like to think and believe we've kind of seen the worst of it, and I'm, you know, I'm pretty hopeful for improvement in the back half of the year, and for us, individually, I count us as fortunate to be where we are in terms of debt-free cash on the balance sheet. So kind of net net, you know, we're intending to just continue to execute our core strategy. Right through the storm, so to speak.
Relatively to the March quarter, and then you know I'm optimistic that that will start to see.
Certainly sequential improvement.
After that as we kind of find their way back to some sense of normalcy, but we've got.
As you alluded to any number of kind of political or kind of geopolitical things going on you know.
And.
Got.
Interest rates at all there's any number of.
You kind of headwinds, but I think.
We are.
I would like to think and believe we kind of have seen the worst of it and.
Yeah.
Pretty hopeful.
For improvement on the back half of the year.
And for us kind of individually.
Kal us is fortunate to be where we are in terms of that free cash on the balance sheet. So kind of net net we're intending to just continue to execute our core strategy right through the storm so to speak.
Todd Maycomber: And, you know, through the combination of kind of these tuck-in acquisitions, conversions, and stock, I appreciate that color. One quick thing, maybe, Todd, this is for you. Just, you know, good to see you guys buying back stock or Six Bucks. At current levels, should we expect you to continue to support shares? Yes. Love the clarification.
And.
Through the combination of kind of these tuck in acquisitions conversions and stock buybacks.
Okay I appreciate that color one quick thing maybe this is for you just.
Good to see you guys buying back stock looks like you did at under six Bucks at current levels should we expect you to continue to support shares going forward.
Yes.
Love the clarification gentlemen, thanks for the time as always.
Jason H. Seidl: Gentlemen, thank you for your time, as always. You bet. Thank you. Thank you.
Thank you.
Thank you. Our next question is coming from Mark Argento with Lake Street Capital. Your line is nice.
Operator: Our next question is coming from Mark Argento with Lake Street Capital. Your line is, Hey, Vaughn, Todd, just quickly following up on kind of the M&A scenario, conversation. I should say, maybe, can you just walk us through how many, you know, agent stations you have out there? What's realistic over time, the opportunity to buy those?
Hey, Bob and Todd just quickly just following up on kind of the M&A scenario I would say its medicines.
Maybe could you just walk us through how many.
In stations you have out there what's realistic over time the opportunity to buy those that I know you had mentioned kind of what a quarter, but you.
Mark Argento: And I know you mentioned kind of one a quarter, but, you know, what, you know, over time, how do you imagine this playing out? And does that pace continue to accelerate, I'm guessing from here on out? And can you deploy enough capital there that you don't really need to look at anything outside of the core agent station market at this point? Maybe just walk us through kind of how you imagine that playing out. Yeah, well, I think we have to begin by kind of recognizing or acknowledging that we're here to support our agent stations on the timeline or timeframe that suits them. So, you know, we kind of stand ready to support our partners, but we're not out twisting their arms trying to compel them to sell. So it will ultimately depend on when they're ready, and we'll be here to support them. With that said, you know, none of us are getting any younger, right?
You know what you know over time, how do you envision this playing out and does that pace continues to accelerate I'm guessing from here on out and can you deploy enough capital. There that you don't really need to look at anything outside of the core agent station market. At this point, maybe just walk us through kind of how you doing.
As I pointed out.
Well I think we have to begin with kind of recognizing or acknowledging we're here to support our agent stations on the time line or time frame that suits them.
So we kind of stand ready to support our partners, but we're not out twisting their arms trying to compel them to sell.
So it will ultimately depend on when they're ready and we'll be here to support them with that said.
You know none of us are getting any younger right and so we have got back to the demographics poach folks are just.
Bon Crane: And so we have to go back to the demographics folks are just naturally coming to a point where, you know, deciding to kind of raise their hand and kind of move forward with some of those conversations. So we have, you know, roughly 80 agent stations in the network. So there's a, you know, there's a big, I guess in banker terms, addressable market, right, of stations within our network that we can support over time. It's hard to say kind of when exactly that would happen, but my sense is the rate and frequency at which that happens.
Naturally.
Coming to a point from there.
No.
Deciding to kind of raise their hand, and kind of move forward with some of those conversations.
So we have you know roughly.
80 agent stations and the network.
So there's a there's a big.
I guess in banker terms addressable market write up of stages within our network that we can support over time, it's hard to say when exactly those would happen, but my sense is kind of the rate and frequency at which that happens.
Bon Crane: Will, you know, continue? I mean, it won't accelerate infinitely, but you know, I wouldn't expect us to do more than one a quarter, but that kind of feels, you know, kind of where we are right now in terms of, you know. What I could tell you kind of anecdotally is that we're actively talking to more of our stations now than we ever have in the history of the country. I think he just comes back to the demographic.
Will.
You know.
Continue I mean, it will accelerate infinitely but you know I wouldn't expect us to do.
More than one quarter, but that kind of appeals kind of where we are right now in terms of.
No.
Well, what I could tell you kind of anecdotally as you know.
We're actively talking to more of our stations now than we ever have in the history of the company.
And I think it just comes back to the demographics of things.
Bon Crane: That's, that's helpful. And also, maybe just remind us, and if it's changed at all, but the typical structure in terms of, you know, part up front, and the rest of them kind of turn out as they had their bogeymen in terms of performance. Yeah, typically 50% up front, and then we'll do a typically three years on, was obviously the target, the HIPAA target.
So that's that's helpful and just all familiar just remind us when that that's changed at all but the typical structure in terms of you know part.
<unk> brought down the road some kind of an earn out.
Fair bogey in terms of performance.
Yeah, Yeah, typically 50% upfront and then we'll do are typically three year on them.
Bon Crane: All right, that's it for me. Thanks, guys. You got it.
So obviously the targets with EBITDA targets.
Alright, that's it for me thanks, guys.
Yes.
Operator: Thank you. Our next question is coming from Kevin Ganey with Thompson Davis. Your line is, Hey, Yvonne and Todd.
Thank you. Our next question is coming from Kevin Gagne with Thompson Davis Your line is life.
Hey, Bon ton.
Kevin Ganey: Actually, to kind of continue the M&A kind of piece for agencies, do you guys have maybe a quantifiable EBITDA contribution that... If you went and acquired, theoretically, all of those guys, what would it add up to? Not off the top of our head.
Actually to kind of continue the M&A piece for agencies.
Do you guys have maybe like a quantifiable EBITDA contribution that.
If you went and acquired.
Theoretically all of those guys what it would add up to.
Not not off the top of our head.
Bon Crane: No. Aww. So it's at least nothing that we're prepared to disclose or kind of talk about on the call. But I'll take that as a homework assignment, and maybe that's something we can work into some future disclosures, and then we would be in a better position to talk. Yeah, I just want to know the size of the opportunity for you guys from that standpoint. We just don't know what their operating costs are, right? We know what their gross margins are, but we don't know what their operating costs are.
Yeah, the top of our head.
No.
Selina.
Nothing that we're prepared to disclose or talk about on the call today.
Yeah.
But I'll I'll take that as a homework assignment and maybe that one thing we can work into some future disclosures and then we would be in a better position to talk about it on this call.
[laughter], Yeah, I, just wanted to size up the opportunity for Eaton.
Yeah.
We just don't know what their operating costs are right. We know what their gross margins are but we don't know what their operating costs or we don't.
Bon Crane: We don't, you know, they're not going to, you know, share that with us until we get to a position where we're looking at the acquisition. So part of it's known, but not the complete picture. Yeah, but at least a place to at least begin to dimensionalize that is you can look on the face of our income statement at that line item of operating partner commissions, right? That's our single biggest cost, right? And as we buy in the agency stations, that cost will go away as we convert them to aging, and then that will manifest itself as margin expansion, right? EBITDA is a function.
They're not share that with us until we get in a position to where we're looking at the acquisition. So part of it is known but not the complete picture.
But at least at place to at least <unk> to at least Dimensionalize that is you can look on the face of our income statement at that line item of operating partner commissions right. That's our single biggest cost right and as we buy and the agency stations that costs.
It would go away as we as we convert them to agency stations.
And then that will manifest itself as margin expansion right EBITDA as a function of gross margin.
Kevin Ganey: There's our non-answer answer to you. I don't know how that works. Also, maybe if we can talk about how you're thinking about the second calendar, second half, what conditions or factors would you think would lead to that pickup? Greater consumer confidence, I, you know, as part of it, right? We, I think, generically, we're starting to see ocean volumes start to pick up, and pricing start to pick up a little bit. So that's encouraging, not just for the ocean piece but for the inland piece. Supply and Demand Dynamics for the Inland Transportation side of things that, you know, hopefully that'll continue to improve, and kind of the geopolitical stuff will settle down. But again, that kind of remains. But, you know, we need, you know, a little better balance between shipper demand and transportation capacity. And some of the weaker hands are being forced out, whether it's yellow or others. That's helping the market rationalize at the end of the day.
So there's that there's our non answer answer to yourself.
Yeah.
Uh huh not that works.
Also maybe if we can talk about.
How you're thinking about the second calendar second half what conditions are factors would you think would lead to that pick up.
Greater consumer confidence.
As part of it right.
I think generically, we're starting to see.
No.
Ocean volumes start to pick up pricing start to pick up a little bit. So that's encouraging not just for the ocean piece, but for the inland piece and just kind of.
Supply and demand dynamics for the inland transportation.
<unk> side of things.
Hopefully that will continue to improve and kind of the the geopolitical.
Stuff will settle down.
But again, that's kind of remains to be seen.
We need a little better.
Flows between.
Yeah.
Shipper demand and end.
And transportation capacity and some of the weaker hands are being.
Being forced out whether it's yellow or others.
That's helping the market rationalize at the end of the day.
Yeah.
Kevin Ganey: I guess what they call constructive destruction that's going on. I appreciate the insight, that's all. All right, thank you. Thank you. Once again, if there are any remaining questions and comments, please press star one on your phone at this time. Our next question is coming from Jeff Kauffman with Vertical Research Partners. Your line is open, and thank you very much.
What I guess, what they call constructive destruction that's growing.
Sure.
I appreciate the insight that's all.
Alright, thank you.
Thank you once again, if there are any remaining questions and comments. Please press star one on your phone at this time.
Our next question is coming from Jeff Kauffman with vertical research partners. Your line is live.
Operator: Good afternoon, guys. Hey, you know, it's strange as I sit here and kind of listen to all these earnings calls and everybody's forward outlook. I think the consistent theme is we feel we're getting close. But the fog's a little thicker, and visibility isn't that great right now. Would you disagree with that comment?
Thank you very much good afternoon guys.
Yeah.
Hey.
It's strange as I as I sit here and kind of listen to all of these earnings calls and everybody's forward outlook I think the consistent theme is we feel we're getting close.
But the fog is a little sticker.
The visibility isn't that great right now would you disagree with that comment.
Jeff Kauffman: No. I think that's very fair. So when you talk about, you know, we feel like things could be turning, or is it more just, well, we know the inventory D stocks are done, we see trade starting to flow, ISMs getting better, or are you actually seeing things maybe in some sub industries or some parts of your network that lead you to believe that, you know, we could be bottoming on the curve here? Well, you know, we're seeing some early indications of things improving So that's, that's hopeful, you know, I would say. Intermodal and Truck Brokerage is still probably the, the toughest. Area, at least for us.
No.
I think that's very fair.
So when you talk about you know, we feel like things could be turning or is it more just well we know the inventory destocking done we see trade starting to flow ism's getting better or are you actually seeing things may be in some sub industries or sub parts.
Of your network that lead you to believe that we could be bottoming on the curve.
Yeah.
Hello.
Seeing.
Seeing some.
Early indications of things improving on the ocean instead of on the Ocean side in particular.
So that's that's helpful. You know I would say.
Intermodal and truck brokerage is still probably the.
The toughest.
Bon Crane: Good news, bad news. It's kind of the smallest piece of our business, but that's been certainly a tough go in this environment, you know, again at a high level. Our core forwarding business continues to do reasonably well. Yeah, the International Ocean is starting to improve. It was slow going, and late November and December and early January, as we're watching, kind of weekly postings in February, things are starting to kind of lift off of those. Those lowest levels.
Area at least for us and again, a good news bad news is the smallest piece of our business.
But but that's been a certainly a tough go in this environment.
No.
Again at a high level, our core forwarding business continues to do reasonably well, Canada continues to do reasonably well.
And.
International Ocean is starting to improve.
Modestly.
You know it was.
Slow going in.
Late November and December and early January.
You know as we're watching.
Kind of weekly postings in February.
Things are starting to kind of lift off of those all of those lowest levels and so hopefully that and there is obviously some seasonality in that that we would expect simple none of that's like revolutionary right. That's kind of what we would generally expect.
Bon Crane: And so hopefully, that, and there's obviously some seasonality in that that we would expect. None of that's like revolutionary, right?
Bon Crane: That's kind of what we would generally expect, but, you know, I think that's kind of the dynamic. So. I don't have any. Ken.
Uh huh.
But.
But you know what.
I think thats kind of the the dynamics so.
No I don't have any.
Got it.
Bon Crane: Hard evidence to offer in the courtroom today, but, you know, there were other things in the courtroom today. Yeah, exactly. So just following up on that, we are starting to see a little bit of a shift from goods coming into the East Coast to goods going into the West Coast. And, you know, some of that Suez, some of that's the Panama Canal, some of it's a whole bunch of other things. Do you care which coast it comes in on?
Hard evidence to offer into the courtroom today, but.
Right.
But you know it was kind of things.
Things in the courtroom today, yeah, yeah exactly.
Right.
So just following up on that we are starting to see a little bit of a shift from goods coming into the east coast to goods going into the west coast.
Some of that Suez summit, some of Thats, Panama Canal. Some of it is a whole bunch of other things do you care, which post it comes in.
Jeff Kauffman: I mean, I know you've got nationwide operations, but is traffic coming in on the West Coast different for you than traffic coming in on the East Coast? Historically, we've had a much more significant trade flow in the Trans-Pacific trade lane. So we would like to have more exposure to Trans-Pacific and Trans-Atlantic, not that we don't do both, but we certainly have a bigger exposure on the Trans-Pacific side. So I think as we see those trade flows improve for any number of reasons, I think that'll be a net positive. Okay, and then one last oddball question here, just kind of given the news coming out of the Supreme Court today.
I know you've got nationwide operations, but as traffic coming in on the West coast different for you than traffic coming in on the East coast.
Historically, we've had.
Much more significant trade flows in the Trans Pacific Trade Lane. So we would like we got more exposure to transact that trans Atlantic not that we don't do both but we certainly have a bigger exposure on the transpac sites.
So I think as we see those trade flows improved for any number of reasons I think that'll be a net positive for us.
Okay, and then one last oddball question here, just kind of given the news coming out of the Supreme Court today.
Bon Crane: What happened to your business the last time President Trump was in power and we had these tariffs on Chinese goods? Is that anything that affects you positively or negatively? Do the goods still flow, but just in a different way? Or does that negatively affect some of that Transpac business for you?
What happened to your business the last time.
President Trump was in power and we had these tariffs.
Chinese good does that anything that affects you positively or negatively due do the goods still flow, but just a different way or does that negatively affect some of that trans Pac business for you.
Well.
Bon Crane: I think the short answer is the more complicated global trade gets, the more value we can provide our customers. So tariffs and those types of things could kind of impact some of that stuff, but that doesn't mean trade stops happening, right? So things might flow a little differently, and there certainly can be individual commodities that get impacted. So it really is kind of a matter of facts and circumstances to know kind of what specific tariffs are being impacted. And if that's kind of, I'm thinking of you sunk my battleship, right? You know, B-47, right?
I think the short answer is no.
The more complicated global trade gets the more value we can provide our customers. So mhm.
Tariffs and those types of things could cause.
Net of impact some of that stuff, but that doesn't mean trade stuff to happen right. So things might slow a little differently.
But before that.
And then there certainly can be individual commodities they get impacted so it really is kind of a facts and circumstances to know kind of what specific tariffs.
<unk> are being impacted and if that's kind of I'm thinking of your southern my battleship right it'll be 47, right if it happens right.
Jeff Kauffman: If it happens to hit a particular commodity that we're servicing, then we could be impacted. But it could, out of the same breath, be helping come up with alternative solutions or alternative sourcing strategies that create incremental opportunities as well. So. All right, awesome. Well, thank you both very much, and congratulations. Thank you. All right. Thank you. Thank you. As we currently have no further questions in queue, I will hand the call back over to Mr. Crane for any closing remarks. 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 as we continue to build on the great platform we've created here at Radiant.
Tequila commodity that we're servicing that then we could be impacted but it gets bid.
Out of the same breath it could just as easily be.
Helping come up with alternative solutions or alternative sourcing strategies.
<unk>.
That create incremental opportunities as well so.
Uh huh.
Alright, awesome well, thank you both very much and congratulations.
Alright, thank you.
Bank Keith as we can.
Currently have no further questions in queue.
On the call back over to Mr. Crane for any closing comments.
Okay.
Thank you.
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.
Extensive global network of service partners as we continue to build on the great platform. We've created here at radiant.
Jeff Kauffman: At the same time, we intend to thoughtfully re-lever our balance sheet and do a combination of aging and conversion through synergistic Tuck-In Acquisitions and Stock Buyback. Through this multi-pronged approach of organic growth, acquisitions, and 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 for your support of Radiant Logistics. Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
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.
This multi pronged approach of organic growth acquisitions and 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.
Thank you. This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.