Q3 2024 Radiant Logistics Inc Earnings Call
Okay.
[music] Jay this afternoon, Bohn, Crain, radiant logistics, founder and CEO and Radiant Chief Financial Officer.
Operator: This afternoon, Bohn Crain, Radiant Logistics Founder and CEO, and Radiant Chief Financial Officer, Todd Macomber, will provide a general business update and discuss financial results for the company's third fiscal quarter and nine months ended March 31, 2024. Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes. This conference may include forward-looking statements within the meaning of the Securities Act 1933 and the Securities Exchange Act of 1934.
Operator: Todd Macomber will provide a general business update and discuss financial results for the company's third fiscal quarter and nine months ended March 31, 'twenty 'twenty four.
Operator: Following their comments, we will open the call to questions.
Operator: This conference is scheduled for 30 minutes.
Operator: The company has based these forward-looking statements on its current expectations and projections about future events. However, 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 factors that may cause a company's actual results or achievements to differ materially from those set forth in our forward-looking statements, such factors include those that have in the past and may in the future be identified in the company's SEC filings and other public announcements, which are available on Radiant's website at www.radiantdelivers.com. In addition, past results are not necessarily an indication of future performance.
Operator: This conference May include forward looking statements within the meaning of the Securities Act 1933, and the Securities Exchange Act of 1934.
Operator: 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.
Operator: Alt or achievements expressed or implied by such forward looking statements.
Operator: While it is impossible to identify all factors that may cause the company's actual results or achievements to differ materially from those set forth in our forward looking statements.
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 Dot radiant delivers dotcom.
Operator: In addition, past results are not necessarily an indication of future performance now.
Operator: Now, I'd like to pass the call over to Radiant's founder and CEO, Bohn Crain. Sir, the floor is yours. Thank you.
Operator: Now I'd like to pass the call over to radians, founder and CEO, Don Crane, Sir the floor is yours.
Bohn H. Crain: Thank you.
Bohn H. Crain: Good afternoon, everyone, and thank you for joining in on today's call. Our results for the quarter ended March 31 of 2024 continue to reflect the difficult freight markets being experienced by the entire industry, as well as our own 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 period.
Bohn H. Crain: Good afternoon, everyone and thank you for joining in on today's call.
Bohn H. Crain: Our results for the quarter ended March 31 of 2024 continue to reflect the difficult freight market is being experienced by the entire industry as well as our own operations.
Bohn H. Crain: 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 prior year periods.
Bohn H. Crain: With that said, we saw a very difficult January and then steadily improving conditions throughout the quarter, and we expect to report sequential quarterly improvement moving forward as markets find their way to more sustainable and normalized levels. Notwithstanding the tough year over year comparisons, we continue to deliver meaningfully positive results and have generated $22.1 million in adjusted EBITDA and $16 million in net cash for operations for the nine months ended March 31 of 2024. In addition, we continue to enjoy a strong balance sheet, finishing the quarter with approximately $31.2 million of cash on hand and nothing drawn on our $200 million credit facility.
Bohn H. Crain: With that said.
Bohn H. Crain: We saw a very difficult January and then steadily improvements throughout.
Bohn H. Crain: Throughout the quarter and we expect to report sequential quarterly improvement moving forward as markets find their way to more sustainable normalized levels.
Bohn H. Crain: Notwithstanding the tough year over year comparisons, we continue to deliver meaningfully positive results.
Bohn H. Crain: Generated $22 1 million in adjusted EBITDA and $16 million of net cash for operations for the nine months ended March 31 2024.
Bohn H. Crain: In addition, we continue to enjoy a strong balance sheet, finishing the quarter with approximately $31 $2 million of cash on hand and <unk>.
Bohn H. Crain: Nothing drawn on our $200 million credit facility.
Bohn H. Crain: As previously discussed, we believe we are well-positioned to navigate through these slower trade markets as we find our way back to more normalized market conditions. 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 buybacks. Through this approach, we believe that over time, we will continue to deliver meaningful value for our shareholders, operating partners, and the end customers that we serve.
Bohn H. Crain: As previously discussed we believe we are well positioned to navigate through these slower freight markets as we find their way back to more normalized market conditions at.
Bohn H. Crain: At the same time, we 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 synergistic tuck in acquisitions and stock buybacks.
Bohn H. Crain: Through this approach we believe over time.
Bohn H. Crain: We will continue to deliver meaningful value for our shareholders operating partners and the end customers that we serve.
Bohn H. Crain: In this regard we are very excited about our recent agent station conversions with the acquisition of del Rey in October of 2023, and the select businesses in February of 2024, which will combine to solidify our offerings to support the cruise line industry in South Florida.
Bohn H. Crain: In this regard, we are very excited about our recent agent station conversions with the acquisition of Delray in October of 2023 and the Select Businesses in February of 2024, which will combine to solidify our offering to support the cruise line industry in South Florida, along with our most recent acquisition of Minnesota-based Viking Worldwide in April. 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.
Bohn H. Crain: Along with our most recent acquisition of Minnesota based biking worldwide in April of 2024.
Bohn H. Crain: We launched <unk> in 2006 with the goal of partnering with logistics entrepreneurs.
Bohn H. Crain: Would benefit from our unique value proposition and the built in exit strout strategy available to the entrepreneur who is participating in our network.
Bohn H. Crain: We believe these three 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 Macomber, our CFO, to walk through the details of our financial results, and then we'll open it up for some Q&A.
Bohn H. Crain: We believe these three 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.
Todd E. Macomber: With that said I'll now turn it over to Todd may come for our CFO to walk through the details of our financial results and then we'll open it up for some Q&A.
Todd E. Macomber: Thanks, Bohn, and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the three and nine months ended March 31st, 2024. For the three months ended March 31st, 2024, we reported a net loss attributable to Radiant Logistics of $703,000 on $184.6 million of revenues, or two cents per basic and fully diluted share. For the three months ended March 31, 2023, we reported net income attributable to Radiant Logistics of $4,183,000 on $244.2 million of revenues, or $0.09 per basic and $0.08 per fully diluted share.
Todd E. Macomber: 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 nine months ended March 31 2024.
Todd E. Macomber: For the three months ended March 31, 2024, we reported a net loss attributable to radiant logistics of $703000 on $184 6 million of revenues or <unk> <unk> per basic and fully diluted share.
Todd E. Macomber: Yeah.
Todd E. Macomber: For the three months ended March 31, 2023, we reported net income attributable to radiant logistics of $4 million $183000 on $244 2 million of revenues or nine per basic and <unk> <unk>.
Todd E. Macomber: For fully diluted share.
Todd E. Macomber: This represents a decrease of approximately $4,886,000 of net income over the comparable prior year period. For adjusted net income, we reported $3,586,000 for the three months ended March 31, 2024, compared to adjusted net income of $8,221,000 for the three months ended March 31, 2023. This represents a decrease of approximately $4,635,000, or approximately 56.4%. For adjusted EBITDA, we reported $5,208,000 for the three months ended March 31st, 2024, compared to adjusted EBITDA of $11,560,000 for the three months ended March 31st, 2023. This represents a decrease of approximately $6,352,000 or approximately 54.9%. Moving along to the nine months.
Todd E. Macomber: Represents a decrease of approximately $4 million $886000 of net income over the comparable prior year periods.
Todd E. Macomber: For adjusted net income, we reported $3.586 million.
Todd E. Macomber: For the three months ended March 31, 2024, compared to adjusted net income of $8 million and $221000 for the three months ended March 31 2023.
Todd E. Macomber: This represents a decrease of approximately $4 million $635000 or approximately 56, 4%.
Todd E. Macomber: For adjusted EBITDA, We reported $5 $208000 for the three months ended March 31, 2024, compared to adjusted EBITDA of $11 million $560000 for the three months ended March 31 2023.
Todd E. Macomber: This represents a decrease of approximately $6.352 million or approximately 54, 9%.
Todd E. Macomber: Moving along to the nine months for the nine months ended March 31, 2024, we reported net income attributable to radiant logistics of $2.904 million on $596 4 million of revenues or six cents per basic and fully diluted share for the three months ended March 31.
Todd E. Macomber: For the nine months ended March 31st, 2024, we reported net income attributable to Radiant Logistics of $2,904,000 on $596.4 million in revenues, or $0.06 per basic and fully delivered share. For the three months ended March 31st, we reported net income attributable to Radiant Logistics of $17,452,000 on $853.3 million in revenues, or $0.36 per basic and $0.35 per fully delivered share. This represents a decrease of approximately $14,548,000 over the comparable prior year period, or 83.4%.
Todd E. Macomber: We reported.
Todd E. Macomber: Net income attributable iridium logistics at $17 million and $452000 on $853 3 million of revenues are 36 cents per basic and <unk> 35 per fully diluted share. This represents a decrease of approximately $14 million and $548000 over the comparable prior year period or <unk> 83.
Todd E. Macomber: Three 4%.
Todd E. Macomber: For adjusted net income, we reported $15,632,000 for the nine months ended March 31, 2024 compared to adjusted net income of $32,845,000 for the nine months ended March 31, 2023. This represents a decrease of approximately $17,213,000 or approximately 52.4%. For Adjusted EBITDA, we reported $22,083,000 for the nine months ended March 31, 2024, compared to Adjusted EBITDA of $46,434,000 for the nine months ended March 31, 2023. This represents a decrease of approximately $24,351,000, or approximately 52.4%. With that, I will turn the call back over to our moderator to facilitate any Q&A, Mark.
Todd E. Macomber: Adjusted net income we reported $15 million $632000 for the nine months ended March 31, 'twenty 'twenty four compared to adjusted net income of $32 million $845000 for the nine months ended March 31 2023. This.
Todd E. Macomber: This represents a decrease of approximately $17 million and $213000 or approximately 52, 4%.
Todd E. Macomber: For adjusted EBITDA, We reported $22.083 million for the nine months ended March 31, 2024, compared to adjusted EBITDA of $46 million $434000 for the nine months ended March 31 2023.
Todd E. Macomber: This represents a decrease of approximately $24.351 million or approximately 52, 4%.
Mark: With that I will turn the call back over to our moderator to facilitate any Q&A from our columns.
Operator: Thank you. The floor is now open to questions. If you do have a question, please press star 1 on your telephone keypad at this time. If your question has been answered, you can remove yourself from the queue by pressing 1.
Mark: Thank you the floor is now open for questions. If you do have a question. Please press star one on your telephone keypad at this time.
Operator: Question has been answered you could remove yourself from the queue by pressing one okay, ladies and gentlemen, Thats star one.
Operator: Again, ladies and gentlemen, it's Star 1 and our first question comes from Mark Argentino from Lake Street Capital. Go ahead, Mark.
Operator: And our first question comes from Mark Argentino from Lake Street Capital go ahead Mark.
Mark Nicholas Argento: Hey, Bonnie, Todd, just, you know, any kind of color on the environment right now? I know it's, you know, continues to be a little tough out there, but have you seen any kind of green shoots out there? Any sectors that are maybe starting to perform a little better across the platform?
Mark Nicholas Argento: Yeah, Bonnie Todd.
Mark Nicholas Argento: You know any kind of color on the environment right now I know it continues to be a little tough out there, but you are seeing any kind of green shoots out there any sectors that are maybe starting to perform a little better you know across the platform.
Bohn H. Crain: Thanks, Mark. This is Bohn.
Mark Nicholas Argento: Thanks, Thanks, Mark this is Bob.
Bohn: I guess I would start by.
Bohn: Reiterating the prepared remarks, which was.
Bohn H. Crain: I guess I would start by kind of reiterating the prepared remarks, which were, you know, January started off really, really slow. And we have seen kind of sequential improvement, you know, February was better than January, March was better than February, and early indications, you know, April's continuing to build on that trend. So I think we're effectively calling the bottom, you know, in terms of the slow, the slowness here. The quarter ended March is our seasonally slowest quarter as well.
Bohn: January started off really really slow and we have seen.
Bohn H. Crain: Kind of sequential improvement.
Bohn H. Crain: February was better than January and March was better than February and kind of early indications you know April continuing to build on that trend. So.
Bohn H. Crain: I think we're effectively calling the bottom in terms of.
Bohn H. Crain: Uh huh.
Bohn H. Crain: So we would expect prospective quarters to, you know, work their way back to more normalized levels, which, you know, I think our world is similar to other calls that you might have participated in. You know, the international has been soft, but that seems to be improving. So, you know, we're seeing, you know, a little bit of life, I guess, in terms of the international or the performance of the international services within the solution set.
Bohn H. Crain: The slow the slowness here.
Bohn H. Crain: Quarter ended March is our seasonally slowest quarter as well so we would expect perspective quarters too you know.
Bohn H. Crain: Work their way back to more normalized levels.
Bohn H. Crain: No.
Bohn H. Crain: What.
Bohn H. Crain: I think.
Bohn H. Crain: Kind of our world is similar to the other.
Bohn H. Crain: The other is the calls that you might have participated in.
Bohn H. Crain: International has been soft, but that seems to be improving so you know we're seeing you know.
Bohn H. Crain: A little.
Bohn H. Crain: Oh.
Bohn H. Crain: A little bit of life I guess in terms of the international.
Bohn H. Crain: Well for the performance of the international services within the solution set.
Bohn H. Crain: Canada, who typically is really, really shine bright, you know, had their own struggles with the quarter ended March, but they're making meaningful progress there. You know, probably one of our more challenging areas has been in the intermodal space. Unknown Speaker.
Bohn H. Crain: Canada, who.
Bohn H. Crain: Typically is really really shine bright you know had their own struggles with the quarter ended March but are making meaningful progress there.
Bohn H. Crain: Probably our one of our most challenged areas has been in the.
Bohn H. Crain: Intermodal space.
Bohn H. Crain: Hum.
Bohn H. Crain: But even that too, you know, we're very, you know, optimistic of the trajectory of what we're doing in Chicago with our bimodal initiative. And for those that might remember, we on a Greenfield basis opened a Trump brokerage. Capability in Kansas City, kind of in the wake of Yellow's bankruptcy that we're pretty excited about. You know, we've got a number of things working, you know, if anything, you know, I think what I would emphasize is, You know, notwithstanding the really tough market, you know, we think we're in really good shape in terms of financial flexibility and no debt and, So we're, you know, we're kind of continuing to lean into this whole environment and try to, you know, identify opportunities to take advantage of kind of in this market environment, because while the numbers are, you know, not where anybody wants them to be on a relative basis, you know, we think we're in really good shape and excited to, you know, to continue to execute our strategy.
Bohn H. Crain: But even that two we're very optimistic.
Bohn H. Crain: The optimistic the trajectory.
Bohn H. Crain: What we're doing in Chicago with our Bimodal initiative and for those that might remember we are on a greenfield basis opened a truck brokerage.
Bohn H. Crain: Capability in Kansas City can in the wake of yellows.
Bohn H. Crain: Bankruptcy that we're pretty excited about so.
Bohn H. Crain: We've got a number of things working.
Bohn H. Crain: If anything.
Bohn H. Crain: I think what I would emphasize is.
Bohn H. Crain: You know notwithstanding the really tough market. We think we're in really good shape in terms of financial flexibility and no debt and.
Bohn H. Crain: So we're kind of continuing to lean into this whole environment and try to identify opportunities to take advantage of.
Bohn H. Crain: In this market environment, because while the numbers are.
Bohn H. Crain: Not where anybody wants them to be on a relative basis.
Bohn H. Crain: We think we're in really good shape and excited.
Bohn H. Crain: To continue to execute our strategy.
Bohn H. Crain: And, you know, we've done, as I had kind of telegraphed on some of our earlier calls, we see a big opportunity emerging in the conversion of our agent stations to company on store, as we've all talked about, and of the gray tail and kind of the inherent pipeline of tuck-in acquisitions that we would expect to come to us over time. And that's manifesting itself. And we're, you know, happy and proud to be able to support our operating partners when they're ready to do that, so we can kind of meet them, you know, at that intersection and support them in that transition.
Bohn H. Crain: And either way.
Bohn H. Crain: We've done you know as I had kind of telegraphed some of our earlier calls we see a big opportunity.
Bohn H. Crain: Emerging in the conversion of our agent stations to company owned stores, we've all talked about the great tail in kind of the inherent pipeline of tuck in acquisitions that we would expect to come to us over time, and that's manifesting itself and we're.
Bohn H. Crain: Happy and proud to be able to support our operating partners. When they are ready to do that for us to kind of meet them.
Bohn H. Crain: At that intersection and support them in that transition. So you know everything is playing out.
Bohn H. Crain: It kind of the way, we would have hoped or expected yeah. We're just unfortunately in this.
Bohn H. Crain: So, you know, everything's playing out kind of the way we would have hoped or expected. You know, we're just unfortunately in this kind of global bit of a global freight recession right now. But, you know, I'm pretty optimistic that the kind of ultimate worst is behind us, and we'll kind of be rebuilding from here and have an opportunity to, you know, hopefully get some things done, kind of more strategically in an environment where a lot of people are handcuffed.
Bohn H. Crain: Bit of a global freight recession right now but.
Bohn H. Crain: I'm pretty optimistic that the kind of the ultimate worst is behind us and we will kind of be rebuilding from here and have an opportunity to you know.
Bohn H. Crain: To hopefully get some things done.
Bohn H. Crain: Got it more strategically in an environment, where a lot of people are hancock.
Bohn H. Crain: Mhm.
Bohn H. Crain: That's helpful. And then, you know, I know, obviously, the balance sheet's in great shape and, you know, happily so. But at the same time, any thoughts on, you know, gradually getting a little more aggressive here, or you just kind of whatever comes to you comes to you. And, you know, it is what it is at this point in terms of deploying capital. Yeah.
Speaker Change: No. That's helpful. And then I know, obviously the balance sheets in great shape and then properly.
Speaker Change: I believe so but at the same time.
Bohn H. Crain: Any thoughts on incrementally getting a little more aggressive here or are you just kind of whatever comes to you. It comes to you and you know it is what it is at this point in terms of deploying capital.
Bohn H. Crain: Yeah, well, we've always been, or I like to view or think of ourselves as always being, good, kind of disciplined allocators of capital. So, you know, we've never chased deals, and we're not going to be chasing deals in this environment.
Bohn H. Crain: Yes.
Bohn H. Crain: We've always been or I like the view I think of ourselves as always being good.
Bohn H. Crain: Disciplined allocators of capital. So you know we've never chase deals and we're not going to be chasing deals in this environment, but I think you know.
Bohn H. Crain: But I think, you know, kind of our view about kind of valuation and structure, you know, that kind of works for us. I think the market's coming to us a little bit, if you will. So I think we'll have more of an opportunity to get things done in a way that makes sense to us in terms of value and structure. And we expect, you know, to be active in our stock buyback moving forward.
Bohn H. Crain: Kind of our kind of our view about kind of valuation and structure.
Bohn H. Crain: You know that kind of work for us I think the market is coming to us a little bit. If you will so I think we'll have more of an opportunity to get things done in a way that makes sense to us in terms of value and structure.
Bohn H. Crain: And we expect to.
Bohn H. Crain: To be active in our stock buyback moving forward are we.
Bohn H. Crain: We We weren't particularly active this quarter, knowing that it was going to be a soft quarter and our stock is thinly traded, and we didn't want to..., kind of step into it, if you will, so to speak, but kind of. You know, as the trading window opens up and all that type of stuff, we would expect to kind of be out there in the market, beginning again to reengage in our buyback.
Bohn H. Crain: Warrant, particularly active this quarter, knowing that it was going to be.
Bohn H. Crain: As of quarter end, and our stock is thinly traded and we didn't want to.
Bohn H. Crain: Kind of step into it if you will so to speak but.
Bohn H. Crain: But kind.
Bohn H. Crain: Kind of.
Bohn H. Crain: You know as the trading window opens up and all that type of stuff, we would expect to kind of be out there in the market.
Bohn H. Crain: But getting again too.
Bohn H. Crain: To reengage in our buyback so.
Bohn H. Crain: Kind of continuing along the course, we've been describing it as kind of our baseline plan is a balanced approach.
Bohn H. Crain: So, continuing along the course we've been describing as kind of our baseline plan is a balanced approach of stock buybacks and these smaller tuck-in type of acquisitions, and, you know, if something larger comes along, we'll certainly look at it, but it'll have to kind of meet these fundamental criteria that we look at as we think about how we're investing.
Bohn H. Crain: Stock buybacks and these smaller tuck in type of acquisitions and you know if something.
Bohn H. Crain: Larger comes along we'll certainly look at it but it was you know, but it will have to kind of meet these fundamental criteria that we look at as we think about how we're deploying our capital.
Speaker Change: Great I appreciate the color and good luck thanks, guys.
Mark Nicholas Argento: Great. Appreciate the call and good luck. Thanks, guys.
Mark Nicholas Argento: And our next question comes from Kevin <unk> from Thompson Davis go ahead, Kevin.
Kevin Wade Gainey: And our next question comes from Kevin Gainey from Thompson Davis. Go ahead, Kevin.
Kevin Wade Gainey: Keep on Todd Good afternoon, maybe just to kind of delve a little bit deeper into.
Kevin Wade Gainey: Hey, Bohn, and Todd, good afternoon. Um, maybe just to kind of delve a little bit deeper into the end of the question about the markets, how are you guys? What are you guys hearing from maybe the manufacturing side? Or the retail side?
Kevin Wade Gainey: We ended the whole of the.
Bohn H. Crain: Or, what are you hearing from those customers as you kind of roll into the next quarter and maybe the back end of the year? I guess I'll go first and then Todd can add in as appropriate the, You know, as has historically been the case when we're in these types of environments, we're certainly not losing customers; our customers have just been shipping less in this environment. You know, there was a lot of talk historically about COVID safety stocks and excess inventories and kind of chewing through those inventories.
Kevin Wade Gainey: The question about end markets. How are you what are you guys hearing from maybe the manufacturing side or the retail side or what are you hearing from those customers.
Bohn H. Crain: You kind of roll into the next quarter and maybe the back end of the year.
Bohn H. Crain: What.
Todd: I guess I'll go first and then Tom can add in as appropriate.
Todd: As has historically been the case with where these types of environments, where certainly.
Bohn H. Crain: Not losing customers or customers have just been shipping less in this environment.
Bohn H. Crain: There was a lot of talk.
Bohn H. Crain: Historically about.
Bohn H. Crain: Covid safety stocks and excess inventories and kind of chewing through those inventories.
Bohn H. Crain: So, you know, as we think about kind of the international component, I think that this is effectively playing out in that we're starting to see some, you know, some increased volumes and opportunities, you know, at the margin on our international shipments, you know, some of the. Global Conflict going on, you know, that's, Acted at least as a temporary catalyst on on price and in terms of ocean and air freight that We're enjoying it, you know, at the same time, the underlying, Jeffrey Seidl, Michael Vermut, Elliot Alper, Todd Macomber, Bohn Crain, Kevin Gainey, Unknown, Piana area of growth and opportunity for everyone is, you know, we spend a fair amount of time talking about how to support our current and prospective customers, you know, that historically have sourced from China and how they're, I mean, no one's abandoning China, but they're diversifying their sourcing strategies and we want to be able to support, you know, our current and prospective customers as they're kind of executing against those diversification strategies, is some of the.
Bohn H. Crain: And so as we think about kind of the international component I think that this is effectively playing out and that we're starting to see.
Bohn H. Crain: Some increased volumes and opportunities at the margin on our international shipments.
Bohn H. Crain: And with some of the global conflict going on that's active at least as a temporary catalysts on price in terms of ocean and air freight that.
Bohn H. Crain: We are joined at the same time the underlying.
Bohn H. Crain: Rand of near shoring and what's going on in Mexico continues to play out and you know it remains a very interesting okay.
Bohn H. Crain: Canada area of growth and opportunity for everyone.
Bohn H. Crain: As you know we spend a fair amount of time talking about how to support our current and prospective customers.
Bohn H. Crain: That historically have sourced from China, and how they're I mean, no one is abandoning China, but they are diversifying their sourcing strategies and we want to be able to support.
Bohn H. Crain: Our current and prospective customers is there kind of executing against those diversification strategies.
Bohn H. Crain: But.
Bohn H. Crain: Some of the.
Bohn H. Crain: Slowest markets to recover for those that have been on some of our prior calls.
Bohn H. Crain: Slowest markets to recover for those that have been on, you know, some of our prior calls. You know, cruise line is certainly coming back, and trade shows are coming back, you know, quite strongly. So those are definitely some positives.
Bohn H. Crain: Cruise line is certainly coming back tradeshows coming back quite.
Bohn H. Crain: Quite strongly so those are definitely some some positives.
Bohn H. Crain:
Bohn H. Crain: We continue to do.
Bohn H. Crain: Unknown Speaker: You know, we, you know, we continue to do, you know, a lot of what I'll call Roll retail store rollouts, kind of big distributions to the big box retailers, some of our underlying customers that are vendors to those big box retailers. You know, that business is, you know, is, I wouldn't say red hot, but it's certainly still there and moving along nicely. We do, you know, a fair amount of work in kind of high-value servers, kind of the high tech space, and moving servers around here in the U.S. and around the world for some of our accounts, and that continues to do well.
Bohn H. Crain: A lot of what I'll call.
Bohn H. Crain: Roll retail store Rollouts are kind of big distributions to the big box retailers for some of our underlying customers that are vendors to those big box retailers.
Bohn H. Crain: You know that business is.
Bohn H. Crain: As you know.
Bohn H. Crain: I wouldn't say red hot, but it's certainly still there and moving along nicely.
Bohn H. Crain: We do a fair amount of work in kind of high value servers are kind of kind of the high tech space and moving servers around here in the U S and around the world for some of our accounts.
Bohn H. Crain: That that continues to do well.
Bohn H. Crain: Our kind of humanitarian aid disaster relief, you know, continues to see opportunities given what's going on in the world environment. So those are some kind of areas or themes, you know, that we observe within our own. Yeah, that all sounds really good.
Bohn H. Crain: Our kind of humanitarian aid.
Bohn H. Crain: Disaster relief, you know continues to see opportunities given what's going on in the world environment. So those are some kind of areas are fanatics.
Bohn H. Crain: We observed within our own.
Bohn H. Crain: Maybe you can also... At least what we've heard is there's been a lot more pushback from a pricing standpoint, at least in the entire transportation industry. And I'm wondering if you guys are encountering that as well when it comes to your service offerings if people are pushing back on price. Well, for the benefit of the listeners, I think what you're describing is, You know, we've been in an environment where the pendulum of power has shifted to the customer, and they've been kind of doing their best to extract the best pricing they can out of the carrier base, but I think the pushback is coming because there's just effectively nothing left to give from the asset base guys.
Speaker Change: Yeah, that's sounds really good.
Bohn H. Crain: Maybe you can also.
Bohn H. Crain: Yes.
Bohn H. Crain: At least what we've heard is there's been a lot more push back from a pricing standpoint at.
Bohn H. Crain: At least and then transportation industry and I'm wondering if you guys are encountering that as well.
Bohn H. Crain: When it comes to your Serbian service offerings that people are pushing back on pricing.
Bohn H. Crain: Well I think for the benefit of the listeners I think what youre describing is.
Bohn H. Crain: We've been in an environment, where kind of the the.
Bohn H. Crain: The pendulum of power has shifted to the customer and they've been kind of doing their best to extract.
Bohn H. Crain: The best pricing they can out of the carrier base, but I think the pushback is coming is that the there's just effectively nothing left to give from the asset based guys.
Bohn H. Crain: And to kind of build on that concept a little bit further, as a non-asset base, as a principally non-asset base 3PL, when the asset base guys have excess capacity sitting idle, they effectively begin to offer service at irrational, unsustainable prices because they've got sunk costs and they would rather keep their, you know, their fleets rolling than sitting idle. And so, you know, that environment is a very tough environment for everybody, you know, but including the non-asset-based guys because asset-based carriers are effectively taking as much freight as they can, and so there's not as much left over to enjoy, if you will, for the non-asset-based players.
Bohn H. Crain: And to kind of build on that concept a little bit further you know as a non asset base.
Bohn H. Crain: Is that principally non asset based three PL.
Bohn H. Crain: In the asset based guys have excess capacity sitting idle.
Bohn H. Crain: They effectively but again to offer a service that irrational unsustainable pricing because they've got some cost and they would rather keep their you know their fleets rolling that are sitting idle.
Bohn H. Crain: And so you know that.
Bohn H. Crain: That environment.
Bohn H. Crain: It is a very tough environment for everybody, but including the the non asset based guys because that.
Bohn H. Crain: The asset based carriers are.
Bohn H. Crain: Effectively taking as much freight as they can and so theres not as much left over to enjoy if you will for the non asset based players.
Bohn H. Crain: But, you know, if we look at that over time, the end of this window in the freight cycle is, you know, a very small window in time within what I would call a normal rate cycle. You hear a lot of people talking about an elongated recovery because just this, this window, is taking longer than usual to kind of work its way through, and that's, you know, there's obviously a lot of contributing factors, but when you know, when COVID and was going on and there were, you know, such rich margins to be enjoyed by the transport, you know, everyone was out investing in capacity. And then, so we know what kind of happens at the end of that movie or in the or in the kind of the down part of that cycle, which we're working through.
Bohn H. Crain: But.
Bohn H. Crain: If we look at that over time the end of this window in the freight cycle is.
Bohn H. Crain: A very small window in time within what I would call a normal rate cycle we.
Bohn H. Crain: You hear a lot of people talking about an elongated.
Bohn H. Crain: Recovery because just this this window.
Bohn H. Crain: Is taking longer than usual to kind of work its way through.
Bohn H. Crain: And that's you know, there's obviously a lot of contributing factors, but when.
Bohn H. Crain: When COVID-19 and what's going on and there was.
Bohn H. Crain: Such rich.
Bohn H. Crain: Margins to be enjoyed by the transports.
Bohn H. Crain: Everyone out without investing in capacity and then so we know what kind of happens at the end of that movie or in that or is that the kind of it.
Bohn H. Crain: The down part of that cycle, which we're working through now.
Speaker Change: Yeah, I'll Echo that I mean, we're seeing increases in domestic.
Kevin Wade Gainey: Yeah, I'll echo that. I mean, we're seeing, you know, increases in domestic, you know, international, incrementally per quarter, you know, and with those, you know, I'm looking specifically at our net margins, you know, volume, the volumes are starting to pick up. And at some point in time, you know, obviously, we'll get back to more of that equilibrium. And that whole scenario that Bohn's describing will obviously, you know, be behind us.
Kevin Wade Gainey: International.
Kevin Wade Gainey: Incrementally per quarter and with those.
Kevin Wade Gainey: Looking specifically at our net margins.
Kevin Wade Gainey: Yeah. Its volume the volumes are starting to pick up and at some point in time.
Kevin Wade Gainey: So we'll get back to more of that equilibrium in that pool. So the scenario that bonds describing will obviously.
Kevin Wade Gainey: Be behind Us so it's.
Speaker Change: I'm thinking that will change.
Kevin Wade Gainey: Hopefully next quarter here this quarter, we're in and the dynamics of what Youre discussing I think will be.
Kevin Wade Gainey: So it's, you know, I think that'll change. And, you know, hopefully, next quarter, this quarter we're in, and, you know, the dynamics of what you're discussing, I think will be, you know, it'll be back to a more normal, healthy environment for everyone.
Kevin Wade Gainey: It will be back to a more normal healthy environment for everyone.
Speaker Change: Thanks, guys I appreciate all the color.
Jason H. Seidl: Thanks, guys. I appreciate all the color. I'll hand it over.
Speaker Change: I'll hand, it over for sure yes.
Jason H. Seidl: And our next question comes from Jason.
Jason H. Seidl: And our next question comes from Jason Seidl from TD Cohen. Go ahead, Jason. Thanks, Operator.
Jason H. Seidl: Jason Seidl from TD Cowen go ahead, Jason.
Jason H. Seidl: Thanks, Operator. Hey, Bohn. Hey, Todd. How are you guys doing?
Jason H. Seidl: Thanks, Operator, Hey, Bob Hey, Todd how are you guys doing.
Jason H. Seidl: Good thank you good.
Jason H. Seidl: So I wanted to sort of get an idea about it.
Jason H. Seidl: So I wanted to sort of get an idea about <unk> given just how slow <unk> started can you sort of walk us through.
Jason H. Seidl: Unknown Speaker 0.4Q Given just how slow 3Q started, can you sort of walk us through it?
Jason H. Seidl: Michael Seidl, Michael Vermut, Jeffrey Kauffman, Mark Argento, Elliot Alper, Todd Macomber
Jason H. Seidl: EBITDA per month, so we can get a better feel for what the run rate is as we head into the quarter here.
Jason H. Seidl: of what the run rate is as we go.
Jason H. Seidl: No.
Todd E. Macomber: No, we're not going to get that granular in terms of the deep of our numbers. I think that would be problematic in terms of just disclosures. I don't want to have to turn around and buy that.
Todd E. Macomber: We're not going to get that granular.
Todd E. Macomber: In terms of the deep.
Todd E. Macomber: All of our numbers I think that would be.
Todd E. Macomber: Problematic in terms of just disclosures in.
Todd E. Macomber: I don't have to turn around.
Todd E. Macomber: It's the issue on the back side of this call. Alright, so let me ask you this. Were you guys profitable on an EBITDA basis in January? Yes. Okay, that's fair enough. Also, how should we think about the current mix between sort of your international air business and your more domestic stuff versus your ocean business?
Todd E. Macomber: Issue.
Todd E. Macomber: <unk> installed.
Todd E. Macomber: Alright, So let me ask it so well.
Todd E. Macomber: Are you guys profitable on an EBITDA basis in January.
Todd E. Macomber: Yes.
Todd E. Macomber: Okay, that's fair enough.
Todd E. Macomber: Also how should we think about the current mix between sort of <unk>.
Todd E. Macomber: Your international Air business, and your more domestic stuff versus in your ocean as well I'm, just curious where you guys ended the quarter on a mix basis.
Todd E. Macomber: Well, I'm just curious where you guys ended the quarter on a mixed basis.
Todd E. Macomber: Unknown Speaker on a mixed basis.
Todd E. Macomber: I'm, well, yeah, I'll let Todd hop in because I'm
Todd E. Macomber: Yes.
Todd E. Macomber: I'll let Todd hop in, because I'm painting with a broad brush, but historically, our core business is domestic, time-definite, straightforward. So again, painting with a really broad brush, if we're normally a billion-dollar revenue company, you know, maybe 350 or 400 million might be international. And then we could kind of peel that apart between air and ocean.
Todd: Todd hop in.
Speaker Change: Painting with a broad brush, but yes historic historically, our core business is as a.
Todd E. Macomber: Domestic time definite straightforward, so again painting with a really broad brush.
Todd E. Macomber: Normally a billion dollar revenue company you know maybe.
Todd E. Macomber: 350 or $400 million might be international.
Todd: And then we can kind of peel that apart between air and ocean, but.
Todd E. Macomber: But.
Todd E. Macomber: But, you know, the bigger piece of the pie is domestic. And when I say domestic, when I say domestic, I'm including North America. So, you know, I'm including our Canadian business and Canadian cross-border business, and our Mexico and Mexico cross-border business is kind of domestic, and the international being true international air and ocean. [inaudible] Todd, are you going to have a go? I don't know if you want to peel that apart a little further. I agree with you.
Todd E. Macomber: The bigger piece of the pie is on domestic.
Todd: Domestic and when I say domestic when I say domestic I made including.
Todd E. Macomber: North America, So you know I'm, including our Canadian business, and Canadian Cross border, and our Mexico, and Mexico Cross border business is kind of domestic AR.
Todd E. Macomber: In the international B being true International Air and Ocean.
Todd: Kind of coming to North America.
Speaker Change: Todd Reesing accordingly.
Todd E. Macomber: Yeah.
Todd: Well I don't know if you want to kind of Peel that apart a little further.
Todd E. Macomber: Right.
Todd E. Macomber: I agree with what you're saying.
Speaker Change: I agree with what you're saying.
Todd E. Macomber: Perfect.
Todd E. Macomber: Perfect. Jason, I'll build on it just a little bit more for you.
Todd E. Macomber: Yes.
Todd: Jason I'll build on that just a little bit more for yourself on the sure.
Todd: Certainly historically, we were as we thought about international we were.
Speaker Change: Much more airfreight that ocean freight.
Todd E. Macomber: So on the trip, you know, certainly historically, as we thought about international travel, we were much more air free than ocean free. And then during COVID, we ended up doing a, you know, a fair amount of ocean during the peaks of COVID given all the constraints and everyone, you know, looking for space. So, that was a little bit anomalous, kind of that spike in ocean freight, kind of during the height of COVID, but you would expect us to be more heavily leaning towards air freight than ocean freight in terms of margin. Okay, so as I think about the additional capacity coming on in the ocean space, you guys are going to be
Todd E. Macomber: And then during October we ended up doing that.
Todd E. Macomber: A fair amount of O'shea.
Todd E. Macomber: Kind of during the peaks of of course.
Todd E. Macomber: Of course with given all the constraints and everyone you know looking for space.
Todd E. Macomber: So that was a little bit anomalous or kind of the spike in ocean.
Todd E. Macomber: Kind of during during the height of Covid.
Todd E. Macomber: But you would expect us to be more heavily leaning towards air freight and ocean freight in terms of.
Todd E. Macomber: Margin contribution.
Todd E. Macomber: Okay. So as I think about the additional capacity coming on in the Ocean space you guys are going to be less impacted than your typical freight forwarder might be.
Todd E. Macomber: Space, you guys are going to be less impacted than your typical pray folder might be.
Todd E. Macomber: Certainly well.
Todd E. Macomber: Certainly, because, well, I think the answer to that is yes, because most people, when they say freight forwarder, they think international freight forwarding. And again, the majority of our business is actually on the
Todd E. Macomber: I think the answer to that is yes, because most people when they say freight border they think international freight forwarding.
Todd E. Macomber: And again the majority of our business is actually on the domestic bookings.
Todd E. Macomber: Okay, I just want to make sure we were thinking about it the right way. You know, historically, our gross margins, 65% of it, if you go back to the prior year, were domestic. So that's the, you know, and that will continue to be, you know, we'll have, you know, it'll be absolutely the majority, you know, the vast majority of our net margins. Perfect. And Bohn, as you talked a little bit about the usage of cash and
Speaker Change: Okay, I just want to make sure we're thinking about it right.
Todd E. Macomber: I mean, historically, our gross margins.
Todd E. Macomber: 65% of that if you go back to the prior year was domestic so that's the.
Todd E. Macomber: And that will continue to be you know will have.
Todd E. Macomber: It'll be absolutely the.
Todd E. Macomber: The majority the vast majority of our of our net margins.
Todd E. Macomber: Perfect.
Todd E. Macomber: And Brian as I as you you talked a little bit about usage of cash.
Bohn H. Crain: I understand that, you know, it's going to be spread out depending upon where the market is. But, you know, at least for the near term.
Speaker Change: I understand that you know.
Bohn H. Crain: It's going to be spread out depending upon where the market is but you know.
Bohn H. Crain: But you know, at least for the near term, should we expect you guys to sort of just stay in that buyback and agent tuck in mode? Because you know, right now, given where your stock is trading, it might be difficult to do any sort of other outside transaction.
Bohn H. Crain: At least for the near term should we expect you guys to sort of just stay in that <unk>.
Bohn H. Crain: Back in agent Tuck in mode, because right now given where your stock is trading it might be difficult to do.
Bohn H. Crain: Any sort of other outside transactions.
Bohn H. Crain: For the multiple type.
Speaker Change: Uh huh.
Speaker Change: I always want to choose my words carefully because I <unk>.
Bohn H. Crain: I always want to choose my words carefully because I, you know, never say never, right? But, but, but certainly, we'll continue to look, you know, with a great deal of scrutiny, you know, around The multiples that we pay and the relevant trade-offs relative to the stock buyback, we really look at that, you know, in and around every transaction. So, certainly that's the, what you described is definitely the baseline case and kind of what we would generally expect to happen.
Bohn H. Crain: Never say never right, but that but certainly it will continue to look you know.
Bohn H. Crain: With a great deal of scrutiny.
Bohn H. Crain: The multiples that we pay and the relevant tradeoffs relative to the stock buyback, we really look at that in and around every transaction. So certainly that's the what you describe is definitely the baseline case and kind of what we would generally expect to happen.
Bohn H. Crain: But I don't want to paint myself into a corner, where if a transaction came along that we really felt was compelling we would look at it and so I don't want to say anything on the call that wood.
Bohn H. Crain: But I don't want to paint myself into a corner where if a transaction came along that we really felt was compelling, we would look at it. And so I don't want to say anything on the call that would, you know, leave us with another conclusion. Fair enough.
Bohn H. Crain: Leave us that another conclusion than that.
Speaker Change: Fair enough guys I appreciate the time as always.
Jason H. Seidl: Fair enough. Guys, I appreciate the time as always.
Speaker Change: Thank you. Thank you.
Jason H. Seidl: And our next question comes from Jeff Kauffman from vertical Research go ahead, Jeff.
Jeffrey Asher Kauffman: And our next question comes from Jeff Kauffman from Vertical Research. Go ahead, Jeff. Thanks.
Jeffrey Asher Kauffman: Thanks. Hey, Bob. Hey, Todd.
Jeffrey Asher Kauffman: Thanks, a bond hate that.
Jeffrey Asher Kauffman: Hey, so a lot of my questions have been answered. So let me go in a different direction. The last two years, from third quarter to fourth quarter, we've been dealing with this inventory de-stocking and what ended up being almost negative seasonality in a quarter that should be displaying more positive seasonality. Do you feel like that's going to be a little different this year?
Jeffrey Asher Kauffman: Hey, so a lot of my questions have been answered so let me go in a different direction.
Jeffrey Asher Kauffman: The last two years.
Jeffrey Asher Kauffman: From third quarter to fourth quarter, we've been dealing with this inventory destocking and what ended up being almost negative seasonality in a quarter that should be displaying more positive seasonality do you feel like that's gonna be a little different this year like do you think we're past the worst of the storm.
Jeffrey Asher Kauffman: Unknown Speaker This year, like, do you think we're past the worst of the storm, and we're going to see more normal three q to four q seasonality? And then, if you could just
Speaker Change: And we're gonna see more normal <unk> seasonality and then if you could just remind us because I don't think we've seen it in three years, what does normal <unk> seasonality look like.
Todd E. Macomber: Unknown Executive, Radiant, Unknown Executive, Radiant, Unknown Executive, Radiant,
Todd E. Macomber: Yeah.
Todd E. Macomber: Yeah, I mean, personally, I mean, it's too early to tell, right? But I do think it's gonna be much more normal. I mean, we're seeing increases; I'm tracking, you know, tracking each month, you know, versus each quarter. And we mentioned earlier that, you know, April's been stronger than March, etc. So, and typically, our Q3 is our week So, you know, we are, you know, fully expecting Q4 is going to be, you know, certainly much stronger than, than, than, you know, our existing Q3.
Unknown Executive: First one I mean, it's too early to tell right, but I do think it's going to be much more normal I mean, we're seeing increases.
Todd E. Macomber: Tracking.
Todd E. Macomber: Tracking each month, the university each quarter and as we mentioned earlier I mean April has been stronger than March et cetera, So and typically our Q3 is our weakest quarter. So we are.
Todd E. Macomber: So it's, you know, so, yeah, I think it's, I think we're, you know, what we saw in the past, I think that is, in my opinion, not gonna, I mean, we're gonna be back to more of a normal, you know, Q4 increase over historical Q3.
Todd E. Macomber: Fully expecting Q4 is going to be certainly much stronger than they.
Todd E. Macomber: Our existing Q3, so it's.
Todd E. Macomber: So yes, I think it's I think what we saw in the past I think that is in my opinion not going I mean, we're getting we're going to be back to a more of a normal.
Todd E. Macomber: Q4 increase over historical Q3.
Jeffrey Asher Kauffman: All right, and I know there's not a cash flow statement in here.
Speaker Change: Alright, and I know, there's not a cash flow statement in the release, but if I was looking for the first nine months of the year at an unaudited.
Jeffrey Asher Kauffman: Released, but if I was looking for the first nine months of the year at an unaudited.
Jeffrey Asher Kauffman: Unaudited Cash Flow Statement. What would be my year-to-date use of cash on acquisitions and share repurchase?
Jeffrey Asher Kauffman: Cash flow statement.
Jeffrey Asher Kauffman: What would be by year to date use of cash on acquisitions and share repurchase.
Todd E. Macomber: So, obviously, that is in the queue. Yeah, should also be filed by now, but Todd's looking here to give you that number. Yeah.
Jeffrey Asher Kauffman: So obviously that is in the queue then.
Speaker Change: Yeah. It should also be filed by now but talk looking here to give you that number yes.
Todd E. Macomber: Yes.
Todd E. Macomber: Okay.
Speaker Change: I mean, we can always collect off yeah, so share repurchases Jeff.
Todd E. Macomber: I mean, we could always collect up. Yeah, so share repurchases, Jeff, for the for the nine months was a little was 3.1 million. That's what we purchased through for the nine months ended March 31, 2024, all the shares really this quarter.
Todd E. Macomber: For the nine months was $3 1 million.
Todd E. Macomber: That's what we that's what we purchased through for the nine months ended March 31 2000.
Todd E. Macomber: All of the shares.
Todd E. Macomber: This quarter yeah.
Todd E. Macomber: Yeah. And then you also asked about acquisitions, and, you know, payments to acquire businesses for the nine months were just under $2 million. All right.
Todd E. Macomber: And then and then you also asked about acquisitions and payments to acquire businesses for the nine months was just under $2 million.
Jeff: Alright, so is there a certain kind of I know, you're being opportunistic and you're sitting on a powder keg of liquidity here for opportunities, but is there a certain cash level that you just don't want to go below.
Jeffrey Asher Kauffman: Unknown Speaker So is there a certain cash, I know you're being opportunistic and you're sitting on a powder keg of liquidity here for opportunities, but is there a certain cash level that you just don't want to go below?
Speaker Change: Given the environment.
Speaker Change: None this is not necessarily I mean I would answer.
Bohn H. Crain: Not necessarily. I mean, I would answer. I'll come at that slightly differently, which is, we would. Target, probably.
Speaker Change: I'll come at that.
Bohn H. Crain: All are slightly differently, which is.
Bohn H. Crain: We would.
Bohn H. Crain: Target <unk>.
Bohn H. Crain: <unk>.
Bohn H. Crain: Plus or minus two and a half times funded debt to EBITDA in terms of leverage you know, while leaving kind of cushion within our capacity. So we would be.
Bohn H. Crain: Plus or minus two and a half times funded debt to EBITDA, you know, in terms of leverage, while leaving kind of a cushion within our capacity. So we would be comfortable up to two and a half times.
Bohn H. Crain: So that's kind of an answer, but we would, you know, only with the, And a benefit of the cash we generated through COVID, are we sitting in a net cash positive position? You know, you know, almost always in the history of the company, we've been a net borrower and had amounts outstanding under our credit facility. So it's not that we're not prepared to, you know, we're not seeking or intentionally targeting some targeted level of cash; it's, you know, at the end of the day, we're looking more at what we're comfortably caring about is kind of a net debt position relative to our bar, you know, our financial covenants and all that. One last question, Todd, if I can.
Bohn H. Crain: Comfortable up to two and a half times. So that's kind of an answer but we would you know.
Bohn H. Crain: Only with the.
Bohn H. Crain: And the benefit of the cash we generated through Covid are we sitting in a net cash positive position.
Bohn H. Crain: You know almost always through the history of the company, we've been a net borrower and had amounts outstanding under our credit facility.
Todd: So it's not that we're not prepared yet.
Todd: No we're not.
Todd: Seeking are intentionally targeting some targeted level of cash.
Bohn H. Crain: At the end of the day, we're looking more at what what are we.
Todd: Comfortably caring is kind of a net debt.
Bohn H. Crain: Position relative to our bar, our financial covenants, and all that kind of stuff.
Speaker Change: And one last question.
Todd: Got it if I can.
Speaker Change: So shares outstanding started the year around $49 million and I'm talking in fiscal year <unk>.
Jeffrey Asher Kauffman: So, Shares outstanding started the year around $49 million, and I'm talking fiscal year.
Jeffrey Asher Kauffman: and currently, they're right around 47.
Speaker Change: And currently there right around 47, so they're down about 2 million shares, but you've already repurchased half a million shares I think I know the answer but can you help me understand what that other one and a half million share differences and is it a situation where if you returned to profit in the stock goes up a buck or two where we look.
Jeffrey Asher Kauffman: So they're down about 2 million shares, but you've only repurchased half a million shares. I think I know the answer. But can you help me understand what that other one and a half million share difference is? And is this a situation where
Jeffrey Asher Kauffman: If you return to profit and the stock goes up a buck or two, are we looking at 48 to 49 million in shares?
Jeffrey Asher Kauffman: [inaudible]
Jeffrey Asher Kauffman: Being at $48 million to $49 million in shares as opposed to 46 to <unk> 47.
Speaker Change: It's still going to pay.
Jeffrey Asher Kauffman: I'm just trying to model here.
Jeffrey Asher Kauffman: I'm just trying to model.
Todd E. Macomber: So I'm sorry, let's see. So we've Yeah, we start well. The Treasury shares were 4.3 million at the beginning of the year, June 30, 2023. And so we have Yeah, we've purchased 500 500,000 shares. So our Treasury shares are now 4.8 million.
Speaker Change: So I'm sorry did you say, let's see so we've.
Todd E. Macomber: Yeah, we start well the treasury shares were $4 3 million at the beginning of the year June 30 of 2023, and so we have yes, we purchased 500 500.
Todd E. Macomber: Right, but the fully diluted shares...
Todd E. Macomber: <unk> thousand shares.
Todd E. Macomber: Treasury shares are now $4 8 million.
Todd E. Macomber: Right, but the fully diluted shares are finished the fiscal year at $49 1 million in there currently $47 million ish. So that's a 2 million share difference in reported shares outstanding on a half million shares repurchased.
Jeffrey Asher Kauffman: Finish the fiscal year at 49.1 million, and they're currently
Jeffrey Asher Kauffman: Unknown Speaker 37 million ish. So that's a 2 million share difference.
Jeffrey Asher Kauffman: shares outstanding on on a half million shares repurchase. I'm just wondering.
Jeffrey Asher Kauffman: I'm just kept dilution has to do with the fact that there was a net loss in the in the core well I think I think it has more to do that there.
Jeffrey Asher Kauffman: Yeah, I think that dilution has to do with the fact that there was a net loss in the core. Well, I think it has more to do that there's... out of the money, security that wouldn't be counted in that care outstanding basis. I think that's the point you're getting at. Yeah. Right. So I guess my question is, in terms of modeling, if you swing to a profit, will that drive it back?
Jeffrey Asher Kauffman: Out of the money.
Jeffrey Asher Kauffman: Security that wouldn't be counted in that because share outstanding basis, I think thats the point youre getting that yes.
Jeffrey Asher Kauffman: Right. So I guess my question is in terms of modeling if you swing to a profit well that drive it back to 48 5 million shares or is it something more to do with stock price well, yes, it'll drain will drive it back obviously, we'll recast calculations and as those numbers change its going to obviously impact the overall fully diluted shares.
Jeffrey Asher Kauffman: Michael Seidl, Michael Vermut, Jeffrey Kauffman, Mark Argento, Elliot Alper, Todd Macomber, Okay, thank you for that.
Speaker Change: The calculation so the answer is yes.
Jeffrey Asher Kauffman: Okay. Thank you for that.
Jeffrey Asher Kauffman: Congratulations, hopefully this environment gets better soon, and thank you for answering my question. Thank you, Jeff. We appreciate your support.
Speaker Change: Congratulations hopefully this environment gets better soon and thank you for answering like well. Thank you Jeff we appreciate your support.
Speaker Change: And we do have one last question from Mike <unk> from Newland capital.
Michael David Vermut: And we do have one last question from Mike Furman from Newland Capital. Go ahead, Mike. Thank you.
Michael David Vermut: Mike.
Michael David Vermut: Hey guys, how are you doing? Thanks.
Michael David Vermut: Hey, guys How're you doing.
Michael David Vermut: Thanks.
Michael David Vermut: A couple of quick ones for you, obviously a lot of your competitors are, you know, we've seen a lot of reports are hurting pretty bad right now, and I believe some of your direct competitors do have a lot of leverage on them. You know, they've been, I think their private equity firm, Stone. Have you seen any concern? From their customers coming to you, are you winning any new business? Unknown Speaker. I guess what I'm getting at is, are we going to come out of this stronger than we went in? Forgetting about acquisition, but just on the pure organic wind base.
Michael David Vermut: A couple of quick ones for you.
Michael David Vermut: Obviously, a lot of your competitors are.
Michael David Vermut: Parts are hurting pretty bad right now.
Michael David Vermut: And I believe some of your direct competitors do you have a lot of leverage on that.
Speaker Change: Yeah, they've been private equity.
Michael David Vermut: Have you seen any concern.
Michael David Vermut: From their customer who is coming to you are you winning any new business.
Michael David Vermut: I guess, what I'm getting at.
Michael David Vermut: Are we going to come out of this stronger than me by name.
Michael David Vermut: Getting a bad acquisition, but just on a pure organic basis.
Michael David Vermut: Well.
Bohn H. Crain: So I don't want to.
Michael David Vermut: So.
Bohn H. Crain: Yeah.
Bohn H. Crain: I don't want to.
Bohn H. Crain: I don't want to take advantage of the softball you're throwing out there to talk negatively about our competitors, so I'm going to be talking more positively. I'm talking more positively about Yeah, yeah, yeah, no, no, you know, I think we are in a good relative position. You know, everybody's, you know, got their own set of constraints and their own strategies to address those. Issues, you know, and we're, you know, we're going to do all we can, you know, to take advantage of the opportunity sets that come our way.
Speaker Change: I don't want to take advantage of the softball, youre throwing out there to talk negatively about our competitors.
Bohn H. Crain: I'm talking about pod I'm talking more positively about yeah, yeah, yeah yeah.
Bohn H. Crain: No I think we are in a good relative position.
Bohn H. Crain: Everybody's got their own set of constraints in their own strategies to address those.
Bohn H. Crain: Issues.
Bohn H. Crain: You know and we're you know we're going to do all we can to.
Bohn H. Crain: Take advantage of the opportunity sets that come our way in.
Bohn H. Crain: You know, I can't, you know, I don't know what some of those, I don't know what financial flexibility some of those folks have to go recapitalize their balance sheets or whether it's going to cause some other types of opportunities. I don't know, and if I did, I wouldn't be in a position to say so anyway.
Bohn H. Crain: I can't.
Bohn H. Crain: I don't know what some of those.
Bohn H. Crain: What financial flexibility some of those folks have to go recapitalize their balance sheets or whether it's going to cause some other types of.
Bohn H. Crain: Or create some other types of opportunities that they have.
Bohn H. Crain: I I don't know if I did I wouldn't be in a position to say so anyway.
Bohn H. Crain: Right.
Bohn H. Crain: But.
Bohn H. Crain: But your observations art.
Bohn H. Crain: We're kind of it candidly, we're kind of curious as well to see.
Bohn H. Crain: But your observations aren't, you know, we're kind of, candidly, we're kind of curious as well to see, you know, what the future holds. Jeff Bezos, Unknown Executive, Radiant Kauffman, Mark Argento, Elliot Alper, Bohn Crain, Kevin, more distressed companies, you know, shopping themselves around. That may not be an interesting thought, but are you seeing more? Oh, absolutely. And, candidly, particularly on the truck brokerage side, right? There's a, that's been a really tough, tough place for folks.
Bohn H. Crain: Uh huh.
Bohn H. Crain: Kind of what's going to happen out there because you know, we're certainly not having a lot of fun in this market.
Bohn H. Crain: But we're kind of top of class in my mind.
Bohn H. Crain: Around the around the situation so I don't envy.
Bohn H. Crain: On that topic are you seeing are you seeing more deals come to market not necessarily ones that we'd want but are there.
Bohn H. Crain: More distressed companies.
Bohn H. Crain: Shopping themselves around that may or may not be an interesting thought.
Bohn H. Crain: Are you seeing more.
Bohn H. Crain: Oh absolutely.
Bohn H. Crain: And.
Bohn H. Crain: Candidly, particularly on the truck brokerage side right there's no.
Bohn H. Crain: So that's been a really tough tough place for folks.
Bohn H. Crain: And, you know, without any specifics, you know, we certainly hear, have heard, and continue to hear, you know, there's a, you know, quite a few folks out there that are just going kind of payroll to payroll, you know, trying to live to fight another day. So, you know, there, there, we, we've seen it underway. And I think we're not done with the constructive destruction that's got to take place, you know, over on the trucking side of things, in particular, to kind of return some more rational pricing to the
Bohn H. Crain: And.
Bohn H. Crain: We've certainly without any specifics.
Bohn H. Crain: We certainly hear heard and continue to hear.
Bohn H. Crain: There's a quite a few folks out there that are <unk>.
Bohn H. Crain: <unk> go and kind of.
Bohn H. Crain: Payroll to payroll.
Bohn H. Crain: Trying to live to fight another day so.
Bohn H. Crain: There we have seen is underway and I think we're not done with that.
Bohn H. Crain: Uh huh.
Bohn H. Crain: The constructive destruction that Scott I'd take place you know.
Bohn H. Crain: Over on the trucking side of things in particular.
Bohn H. Crain: Return, some more rational pricing to the marketplace.
Bohn H. Crain: And then and then one last one for you I know.
Michael David Vermut: And then one last one for you, I know. Unknown Speaker Over the past couple of years, you know, we have, I think we have had, you know, peak earnings. I don't remember what we did 70, 80 million in EBITDA. Now we're down here, and you'd always said, you know, forget about the ups and downs are normalized somewhere between, let's say, 50 and 60. I think you said, maybe, if I remember correctly, somewhere in that area.
Bohn H. Crain: Yeah over the past couple of years.
Michael David Vermut: And I'd say, we had peak earnings I don't remember, what we did 70 80 million of EBITDA now, we're down year and you'd always said forget.
Michael David Vermut: Forget about the ups and downs are.
Michael David Vermut: Normalized somewhere between lets say 50 in fixed fee I think you'd said, maybe if I remember correctly.
Michael David Vermut: Somewhere in that area.
Michael David Vermut: Is that still a good bookmark, you know? In normal times, we should be in that range. And hopefully, everything that we're doing, during the downturn, bringing in some of the Agents, you know, maybe somebody, you know, maybe some acquisition, maybe that creeps up over time, but, Has anything changed in your mind about that normalized Type B Vida run rate for the company?
Speaker Change: Is that still a good bookmark you know.
Michael David Vermut: In normal time, we should be in that range and hopefully everything that we're doing there.
Michael David Vermut: During the downturn, bringing in some of the.
Michael David Vermut:
Jen: Eh Jen yes.
Michael David Vermut: Some may be some.
Michael David Vermut: Acquisition, maybe that creeps up over time, but.
Michael David Vermut: Has anything changed in your mind to.
Michael David Vermut: That normalized type EBITDA run rate for the company.
Speaker Change: No I mean, I think the only thing that's changed is.
Michael David Vermut: No, I mean, I think the only thing that's changed is Yes, yes, is the elongated nature of this slogan. Right, so the time it takes us all collectively to get back to that norm is being extended beyond what people were expecting. But in terms of how we think about the business, the opportunity set, the strategies, our areas of focus, you know, none of that has changed.
Michael David Vermut: Just this.
Michael David Vermut: It is the elongated nature.
Michael David Vermut: Oh.
Michael David Vermut: Of this slowdown.
Speaker Change: Alright so.
Michael David Vermut: The time is that it is taking us all collectively to get back to that normal.
Michael David Vermut: You know is being extended kind of beyond what people were expecting but.
Michael David Vermut: In terms of how we think about the business the opportunity set the strategies they are areas of focus.
Michael David Vermut: No.
Michael David Vermut: None of that none of that has changed.
Michael David Vermut: Yeah.
Michael David Vermut: But probably what has, you know, not directly responsive to your question, but we were, or in some respects, fortunate we didn't go do a lot of, you know, take all of our cash and go do a lot of M&A and pay higher multiples for businesses, you know, or go do a Tinder offer for a bunch of our stock at six and seven dollars a share or whatever it was at the time. I'm really glad we didn't do those things because we were as cautious as we were; it just put us in a better position, situation, or better position.
Michael David Vermut: But probably what has.
Michael David Vermut: Not directly responsive to your question, but.
Michael David Vermut: We were.
Michael David Vermut: In some respects.
Michael David Vermut: Fortunately we didn't go.
Michael David Vermut: Do a lot of take all of our cash and go do a lot of M&A and pay higher multiples for businesses.
Michael David Vermut: Our go do a tender offer for a bunch of our stock at $6 $7, a share or whatever it was at the time.
Michael David Vermut: When we would get those questions from time to time, you know I'm really glad we didn't do those things because because we were as cautious as we were it just put us in a better.
Michael David Vermut: Situation or we're better positioned.
Michael David Vermut: Some people are kind of burning the furniture and we're not at all doing that right.
Michael David Vermut: Some people are kind of burning the furniture, and we're not at all doing that, right? We're continuing to invest in the business and continue to grow and focus on organic growth, hiring people, and supporting our, you know, making good on our brand promise and supporting our agent stations and those conversions. So we are, it is largely business as normal, notwithstanding the fact that this is really tough. Right, excellent. Well, we have
Michael David Vermut: We're continuing to invest in the business and continue to grow and focus on.
Michael David Vermut: Organic growth in <unk>.
Michael David Vermut: Salespeople and supporting our you know, making good on our brand promise and supporting our agent stations and those conversions. So we are we are largely business as normal.
Michael David Vermut: Notwithstanding the fact that this is a really tough market.
Michael David Vermut: All right, excellent. Well, happy with the balance sheet, happy with the continuation of positive cash generation. So it'll get better, and you're doing a great job.
Michael David Vermut: Alright excellent.
Michael David Vermut: Happy with the balance sheet happy with.
Michael David Vermut: Continuation of positive.
Michael David Vermut: Cash generation, so it'll get better and you're doing a great job.
Speaker Change: Thanks, guys.
Speaker Change: Thanks, Thank you.
Speaker Change: Thank you that is our last question I'd now like to turn it back to management for any closing remarks.
Operator: Thank you. That is our last question. I'd now like to turn it back to management for any closing remarks.
Speaker Change: 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.
Bohn H. Crain: 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, and 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 re-lever our balance sheet through a combination of agent-station conversions, synergistic tuck-in acquisitions, and stock buybacks. Through our 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.
Bohn H. Crain: Robust North American footprint.
Bohn H. Crain: An extensive global network of service partners to continue to build on the great platform. We've created here at radiant.
Bohn H. Crain: 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.
Bohn H. Crain: Through our 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.
Bohn H. Crain: Thanks for listening and your support of Radiant logistics.
Bohn H. Crain: Yeah.
Speaker Change: Thank you. This does conclude today's conference. We thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
Operator: Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
Operator: [music].