Q3 2025 Radiant Logistics Inc Earnings Call
Speaker Change: Greetings. I'm welcome to the Radiant Logistics, third quarter fiscal year 2025 earnings
Speaker Change: At this time, all participants are on a listen-only mode, and a question and answer session will follow the form of presentation.
Speaker Change: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded.
Speaker Change: This afternoon, Bohn Crain, Radiant E logistics founder and chief executive officer, and Radiant's 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 31st, 2025.
Following their comments, we will open the call to questions.
This conference is scheduled for 30 minutes.
Speaker Change: This conference call may include forward-looking statements within the Meanings of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Speaker Change: The company has based these forward-looking statements on its current expectations and projections about future events.
Speaker Change: 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
Speaker Change: while it is impossible to identify all the factors that may cause the company's actual results or achievements to different materially from those set forth in our forward-looking statements.
Such factors include...
Speaker Change: In addition, past results are not necessarily an indication of future performance.
Speaker Change: Now I'd like to pass the call over to Radiant's founder and CEO , Bohn Crain. Sir, the floor is yours.
Thank you.
Speaker Change: Good afternoon everyone and thank you for joining in on today's call.
Speaker Change: With the benefit of our diverse service offering, we continue to deliver solid financial results and generated $9.4 million in adjusted EBITDA for our third fiscal quarter ended March 31, 2025.
Speaker Change: which is up 4.2 million and just over 80% relative to the comparable prior year period.
Speaker Change: The comparable year-over-year improvement in adjusted EBITDA was driven through a combination of improvements in our base business operations.
along with contributions from our recent acquisitions.
Speaker Change: For the quarter-ended March 31, our legacy U.S. operations generated $1.5 million in incremental adjusted EBITDA, or our legacy Canadian operations generated $0.5 million in incremental adjusted EBITDA.
Speaker Change: and additional $2 million in Adjusted EBITDA for the quarter-ended March is driven principally by our Greenfield acquisitions of Seattle-based Cascade Transportation from June of 2024, Houston-based Foundation Logistics and Services from our September 24 acquisition.
St. Louis-based TB Transportation from our December 2024 acquisition and Los Angeles-based Trains Town Shipping from our March 25 acquisition.
Speaker Change: along with the conversion of our Strategic Operating Partner Miami-based Select Logistics in February of 2024.
Speaker Change: Notwithstanding these strong results for the quarter-ended March 31, we are expecting some near-term volatility in our results tied to the ebb and flow of the ongoing US negotiations around trade and
Speaker Change: and estimate that approximately 25 to 30% of our gross margins for the Mark's quarter would have been impacted by the recently announced tariffs.
Speaker Change: With that said, we also expect that any near-term slowdown will likely result in a corresponding bullwhip effect with a surge in global trade as these tear up disputes are brought to rest.
Speaker Change: and are encouraged by the de-escalation of U.S. and China trade tensions that have occurred over the weekend.
Speaker Change: and any event we intend to remain nimble in our response to tariff announcements by the U.S. administration and continue to support our customers and navigating these quickly evolving markets and executing thoughtful supply chain strategies to provide our customers with competitive advantage.
Speaker Change: As previously discussed, we believe we are well-positioned with a durable business model.
Diverse service offering and strong balance sheet to navigate to a slower freight market.
Speaker Change: We continue to enjoy a strong balance sheet with approximately 19 million of cash on hand as of March 31.
Speaker Change: and only $15 million drawn on our $200 million credit facility.
At the same time, we remain focused on the long-term.
Speaker Change: staying true to our strategy to deliver profitable growth through a combination of organic and acquisition initiatives, while thoughtfully relivering our balance sheet through a combination of strategic operating partner conversions, synergistic tucking in acquisitions, and stock buybacks.
Speaker Change: 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.
Speaker Change: We make good progress in this regard over this last quarter with the acquisition of California
Speaker Change: The conversion of our Pennsylvania-based strategic operating partner, USA Logistics and USA Careers, which is being combined with our existing Radiant Operations in Philadelphia.
Speaker Change: and the conversion of our Texas-based strategic operating partner, Universal Logistics, which is being combined with our existing Radiant Operation and Houston.
Speaker Change: We believe these three transactions are representative of our broader pipeline of opportunities, which includes both Greenfield acquisitions, companies not currently part of our network, as well as acquisition opportunities inherent in our agent-based network, where we can support our current operating partners in their exit strategies.
Speaker Change: With that, I'm now turning over to Todd Macomber for our CFO to walk us through our detailed financial results and then we'll open it up for some Q&A.
Todd Macomber: Thanks, Pawn, 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 and in March 31st, 2025.
Todd Macomber: The three-month-setted March 31st, 2025, we reported net income attributable to Radiant logistics of $2,541,000 on 214 million of revenues for $5 per basic and full-of-doluted
Todd Macomber: The three months in in March 31st, 2024 reported a net loss attributable to Radiant Logistics of $703,000 on $184.6 million of revenue, or two cents per basic and fully
Todd Macomber: This represents an improvement of approximately $3,244,000 of net income over the comparable prior year period.
Todd Macomber: For adjusted EBITDA, We reported $9.398 million for the three months ended March 31, 2025, compared to adjusted EBITDA of $5 million $208000 for the three months ended March 31 2020 for this.
Todd Macomber: This represents an increase of approximately $4 million $190000.
Todd Macomber: Approximately 85%.
Todd Macomber: Moving along to the nine months results.
Todd Macomber: For the nine months ended March 31, 2025, we reported net income attributable to radiant logistics of $12 million $384000 on $682 1 million of revenues are 26 per basic and <unk> 25.
Todd Macomber: Fully diluted share.
Todd Macomber: For the nine months ended March 31, 2024 reported net income attributable to radiant logistics of $2.904 million on $596 4 million of revenues or <unk> <unk> per basic and fully diluted share.
This represents an increase of approximately $9 million $480000 over the comparable prior year period or 326, 4%.
Todd Macomber: For adjusted net income, we reported $25 million $459000.
Nine months ended March 31, 2025, compared to adjusted net income of $15 million $632000 for the nine months ended March 31, 'twenty 'twenty four.
Todd Macomber: This represents an increase of approximately $9 million $827000 or <unk>.
Only 62, 9%.
Todd Macomber: For adjusted EBITDA, We reported $30 million $866000 for the nine months ended March 31, 2025, compared to adjusted EBITDA of $22.083 million for the nine months ended March 31 2020 for.
Todd Macomber: This represents an increase of approximately 8 million to $783000 or approximately 39, 8%.
Todd Macomber: With that I will turn the call over to our moderator.
Todd Macomber: Facilitating the Q&A from our callers.
Todd Macomber: Okay.
Todd Macomber: Thank you at this time, we will be conducting our question and answer session. If.
Todd Macomber: If you would like to ask a question. Please press star one on your telephone keypad account.
Todd Macomber: A confirmation tone will indicate your line is in the question Keith.
Todd Macomber: And you May press Star two if you would like to remove your question from the queue.
Todd Macomber: Participants using speaker equipment, it may be necessary to pick up your handset before pressing this darkens.
Todd Macomber: One moment, please while we poll for questions.
Todd Macomber: Thank you.
Todd Macomber: Our first question is coming from Elliot Alper with Cowen Your line is nice.
Speaker Change: Alright, great. Thank you. This is relied on for Jason Seidl.
Todd Macomber: So can you have a lot of early on.
Speaker Change: Hey could you elaborate more on what drove the outperformance.
Todd Macomber: The base business this quarter.
Todd Macomber: And kind of given your commentary on the bullwhip effect could.
Todd Macomber: Could you talk about maybe the puts and takes into the June quarter.
Todd Macomber: It's certainly a little early into the June quarter to have a lot of it.
Todd Macomber: I get that.
Todd Macomber: With any granularity.
Todd Macomber: We certainly saw some.
Todd Macomber: Got it.
Todd Macomber: Slowing are beginning to see some slowing in some of the international trade volumes in response to the.
So all the trade tensions that are going on.
Todd Macomber: Okay.
Todd Macomber: But we'll see how long that last in the scheme of things and.
Todd Macomber: And then you know.
Todd Macomber: Kind of early indications for <unk>.
Todd Macomber: April or that.
Todd Macomber: Got it.
Todd Macomber: Candidly the business was doing better than I was expecting it to or kind of that we're not being as heavily impacted as I thought we might be but its certainly.
Todd Macomber: Got it early in the process and it seems like.
Todd Macomber: You know everyday things are shifting around so it's quite fluid right now and.
Todd Macomber: Wow.
Todd Macomber: We certainly have a fair amount of our business you know involved in the support of a global trade.
Todd Macomber: It also.
Todd Macomber: Challenges create opportunities kind of one of our Taglines is never waste a good you know.
Todd Macomber: Chaos here.
Todd Macomber: Or do what they ask other ways in terms of the opportunities that that it is creating for us to support.
Todd Macomber: Our partners in navigating the current environment. So.
Todd Macomber: So we would expect.
Whatever near term impacts that we will experience.
Todd Macomber: Sure.
Todd Macomber: Pretty optimistic that.
Todd Macomber: Over time, we will get more than offset that.
Todd Macomber: No.
Todd Macomber: <unk>.
Todd Macomber: Following surge that is sure to come.
Todd Macomber: Folks begin to reset their supply chains.
Todd Macomber: At the same time.
Todd Macomber: You are familiar we do have a fairly good sized presence in Canada, and Mexico, and they kind of those markets have been kind of quasi beneficiaries of some of these trade dynamics.
Todd Macomber: As shippers.
Todd Macomber: Or kind of working to kind of navigate within the constraints of.
Todd Macomber: These <unk> are.
Todd Macomber: They are proving to be interim interim tariffs.
Todd Macomber: So while Theres a lot of uncertainty you know I think at the end of the day, we're going to be.
Todd Macomber: Better than Okay I think.
Todd Macomber: But having said that the quarter ended June.
Todd Macomber: <unk>.
Todd Macomber: It should be solved I would expect it to be solved.
Todd Macomber: Yes.
Speaker Change: Yeah, and then maybe just looking back at the March quarter, I mean Hum.
Speaker Change: Bob kind of where we were coming out for the estimate startup costs anything to call out there or was it broad based strength or any pockets of outperformance you saw.
Speaker Change: Got it got some of the details there.
Speaker Change: He is looking at so yes, I mean, it's just yeah.
Speaker Change: Yes, it would be Canada, Canada performed better than we did I anticipated I'll put it that way and we have had.
Speaker Change: I mean, some of the files were down on account like for the international but the margin characteristics were.
Speaker Change: Profile were up you know so.
Speaker Change: It was really broad based and then factoring in the acquisitions that we ended up getting done.
Speaker Change: Also helped contribute to the overall increase in the quarter.
Speaker Change: Makes sense. Thanks.
Speaker Change: Historically had some good insights into our bookings out of Asia.
Speaker Change: Just given all the tariff news I mean curious about any trends you've seen evolved through April and maybe how youre expecting shippers to react and anything out of Asia bookings Youre seeing.
Speaker Change: Just in the last few days would be helpful.
Speaker Change: Well.
Speaker Change: We all woke up to the same news you did this morning right. So it's.
Speaker Change: I think it's a little early.
Speaker Change: To start calling it out but.
Speaker Change: In terms of how how folks will ultimately respond but.
Speaker Change: Basically ocean imports ex China had come to a virtually a virtual standstill.
Speaker Change: Most recently.
Speaker Change: But again I think it's going to be very short lived.
Speaker Change: But time will tell right but.
Speaker Change: There had been so much.
Speaker Change: Movement in terms of trying to find alternative sources or diverting.
Speaker Change: Manufactured sharing sites to southeast Asia, or otherwise where this.
Speaker Change: Certain things have been set in motion that will have to run its course.
Speaker Change: No.
Speaker Change: I think it will.
There's been some level of kind of damage done that we'll have to kind of run its course.
Speaker Change: And then we'll see kind of how quickly things.
Speaker Change: Revert back to some semblance of normal I'm sure you're aware a number of the the steamship lines.
Speaker Change: Blank sailings are they reposition ships, you know kind of in anticipation of the slower volumes. So it's a little bit of a.
Speaker Change: Fire fight out there.
Speaker Change: I guess on another call out that I would make to just give a little bit more color is that.
Speaker Change: Before some of our most recent transactions the majority of our international business was actually comes to us through our agency stations.
Speaker Change: And so this.
Speaker Change: We will we.
Speaker Change: We will be.
Speaker Change: Less affected on a net basis than you might otherwise expect because our historical kind of trailing 12 month international numbers.
Speaker Change: Much of that comes through our international agent locations.
Speaker Change: With that said our most recent acquisition of Transcon in particular has focused heavily on ocean imports and out of.
Speaker Change: And out of Asia.
Speaker Change: The Trans Pacific trade so we're.
Speaker Change: Particularly interested.
Speaker Change: So.
Speaker Change: See how.
Speaker Change: Things progress.
Speaker Change: In and around.
Speaker Change: Trade and tariffs and.
Speaker Change: What kind of happened over the weekend Whatsapp.
Speaker Change: I came in early this morning, and tweaked must tweak the press release a little bit.
Speaker Change: In connection with the kind of this.
Speaker Change: Very recent news, which we view.
Speaker Change: All was positive and hopefully constructive.
Speaker Change: Getting things moving forward again.
Speaker Change: Couple. Thank you Brian Thank you Todd.
Speaker Change: You bet you bet. Thanks.
Speaker Change: Thank you once again, ladies and gentlemen, if you do have any questions. Please press star one on your telephone keypad.
Speaker Change: Our next question is coming from Jeff Kaufman with vertical research partners your line of sight.
Speaker Change: Thank you very much congratulations guys chat.
Speaker Change: Challenging quarter, so solid results.
Speaker Change: A couple of questions I guess, the first one I just wanted to understand what you're saying when you say gross margin.
Speaker Change: Was affected 25% to 30% is that implying that the AGP of 58 million could have been 70 or 80 million or is that more talking about the percentage of 27% could've been 30 or 31%.
Speaker Change: Exactly did you mean, when you said AGP.
Speaker Change: 25% to 30% was affected.
Speaker Change: Yeah, I would I would say, 25% to 30% of our gross margin is associated with the international trade.
Speaker Change: Okay, so not necessarily that the number could have been 25 or 30% higher. It's just that's how much of your freight was touched by it okay. Yes.
Speaker Change: Yeah.
Speaker Change: Well.
Speaker Change: Part of part of how you should also interpret that or are you shouldn't necessarily interpret that as.
Speaker Change: Yeah.
Speaker Change: It's necessarily exposure to the downside right.
Speaker Change: 25% to 30% of our business as an opportunity to engage.
Speaker Change: On a real time basis with our customers to try to kind of help.
Speaker Change: Them through the situation.
Speaker Change: But as we have was there certainly are.
Jeff: Aspects of this so Jeff as you might remember we have a.
Jeff: Our customs brokerage capability in.
Jeff: Fairly robust.
Jeff: Oh management and collaboration platform called <unk> that came to us as they navigate transaction.
Jeff: Mhm.
Jeff: And that team has just been extraordinarily busy on a consultative basis.
Jeff: Trying to help customers.
Jeff: And kind of figure out.
Jeff: Whether the zig zag in the context of the information that keeps Florida.
Jeff: <unk>.
Jeff: One of the things, we probably didn't focus on enough as I'm thinking about it is.
Jeff: The removal of the sort of $800 de minimis.
Jeff: Historically, we really work.
However, it didn't have much if any exposure to that parcel lever parcel level direct to consumer E. Commerce play at all well those businesses are getting crushed by that kind of change in the rule.
Jeff: And going to I think ultimately kind of create more opportunities for.
Jeff: So the companies like us because theres a lot of freight that's been moving by.
Jeff: Hello International parcel type carriers that are not well positioned to support these trade flows.
Jeff: Outside of that de Minimis relief, and so I think theres going to be kind of incremental opportunity for us around that that particular change.
Speaker Change: So, but I have a big picture question here I know, it's only been a day.
Speaker Change: Since we heard about.
Speaker Change: The thoughts and U S China here, but.
Speaker Change: <unk> said that there's some things that still are going to be impacted by this ive even on the reduced level. So I'm just kind of curious in your mind well no. This isn't really a green light on everything.
Speaker Change: What do you think it's still kind of frozen are stuck in the mud and what kinds of business from your customers gets kind of.
Speaker Change: Todd.
Speaker Change: By this change.
Speaker Change: I don't know if that's a good question.
Speaker Change: But.
Speaker Change: Before.
Speaker Change: Kind of this kind.
Speaker Change: The tariff discussion revealed itself there was already a move afoot for people to continue to look critically at their supply chains and look to further diversify their there.
Speaker Change: Sourcing strategies.
Speaker Change: Ultimately.
Speaker Change: Certainly not abandoning China, the diversifying to southeast Asia, and India, and Mexico, our other locations.
Speaker Change: And I, just don't think that.
Speaker Change: I think this kind of volatility is just going to reinforce the continued pursuit of those strategies. So I think the kind of whatever metaphor you want to use the genie is out of the bottle or the conversations already been started.
Speaker Change: I don't think you can.
Speaker Change: Got it.
Speaker Change: But the bullet back into the good and the continued mixed metaphors.
Speaker Change: So I think this is where just kind of continuing along.
Speaker Change: The journey, but.
Speaker Change: Honestly, I think I'd take even kind of Ah Ah.
Speaker Change: A broader.
Speaker Change: Point of view personally, which is which of these strategies are going to survive.
Speaker Change: The Trump administration, because I expect the eye and radiant is going to be here long after Trump's dawn and I just don't know.
Speaker Change: But I fail to see how some of this stuff is really going to be durable. So we're trying not to be.
Speaker Change: Two affected I mean, we're all obviously were all affected.
Speaker Change: On the near term, but we're really trying to.
Speaker Change: Stay the course in terms of our fundamental strategies and not be.
Speaker Change: Swayed, if you will by <unk>.
Speaker Change: Ultimately are going to be kind of a short term phenomenon. So you'll see we've continued to be aggressive in our M&A activities. So we're still kind of executing the same strategy is notwithstanding.
Speaker Change: The noise of tariffs.
Speaker Change: And then along those lines currency has moved a lot in the last 90 or 100 days.
Speaker Change: How do you think the battlefield of the roadmap whichever metaphor you want to roll with here.
Speaker Change: Changes as a result of the changes in the currency flows.
Speaker Change: Yeah.
Speaker Change: I don't know.
Speaker Change: So yes that was all I'll leave that to the autonomous [laughter].
Speaker Change: What I would what I would tell you is.
Speaker Change: We have a little exposure to the Canadian dollar based on what's happening in our based upon our business up there.
Speaker Change: Outside of that most of our business is conducted in U S dollars now, let's not say so.
Speaker Change: So I can't sit here today and tell you what.
Speaker Change: Landed cost.
Speaker Change: No of a particular widget the sensitivity of the landed cost of a widget based upon the exchange rate relative to the pound.
Speaker Change: Yeah.
We would have to have several bottles of wine to answer that question.
Speaker Change: Okay, well I can't get you one right now, but let me just one last one in.
Speaker Change: You did mention.
Speaker Change: Yes.
Speaker Change: Kind of.
Speaker Change: Lucky fourth fiscal quarter here.
Speaker Change: May be a bullwhip sometime in the next fiscal year, but I think going into.
Speaker Change: The release today.
Speaker Change: Census was thinking that fourth quarter is normally a pretty strong quarter for you fundamentally maybe it'll be your second best quarter. This year do you still feel that the fourth quarter might be the second best quarter. This year would you kind of put the caveat that there's just so much we don't know.
Speaker Change: We can still be thinking along those lines I think traditional sensitivity or traditional seasonality is kind of out the window right now.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: We still don't have.
Speaker Change: Great visibility to what's there.
Speaker Change: How quickly things are going to change or how people are going to react to this news for how durable. This news is or what tomorrow's tweet might be.
Speaker Change: So I would say at least for me.
Speaker Change: On.
Speaker Change: Yes.
Speaker Change: I am expecting softness in the June quarter.
Speaker Change: And so I would not so I guess the answer to your question more precisely.
Speaker Change: I would not expect it to be June to be our second strongest.
Speaker Change: Quarter, if I had to.
Speaker Change: But our feeling is that yeah, well, what you might lose in the June quarter at some point you recapture in fiscal 2000, and so that's what.
Speaker Change: Thank you.
Speaker Change: Yes, okay.
Speaker Change: Okay, great. Thank you so much.
Speaker Change: Thank you.
Speaker Change: As we have no further questions on the line at this time I would like to hand, the call back over to Mr. Crane for any closing remarks.
Speaker Change: Thank you.
Speaker Change: 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.
Speaker Change: And through a combination of agent station convergence strategic tuck in acquisitions and stock buybacks.
Speaker Change: Through our multi pronged approach, we believe we will continue to create meaningful value for our shareholders operating partners and the end customers that we serve.
Speaker Change: Thanks for listening and your support of Radiant logistics.
Speaker Change: Thank you ladies and gentlemen. This concludes today's call you may disconnect. Your lines at this time and we thank you for your participation.