Earnings call: Radiant Logistics confident despite challenging market conditions, eyes M&A opportunities
Radiant Logistics (NYSE: RLGT ) reported financial results for Q1 ending September 30, 2023, revealing a challenging freight market due to reduced imports and a slowing economy. Despite these conditions, the company generated $9.2 million in adjusted EBITDA and almost $8 million in cash from operations. The company remains optimistic about future market improvement and plans to invest in stock buybacks and converting agent stations to company-owned stores. Key takeaways from the earnings call include: Radiant finished Q1 with approximately $36 million in cash and no debt drawn on their $200 million credit facility. Despite challenging market conditions, Radiant aims to deliver profitable growth through organic and acquisition initiatives. The company reported a decrease in net income and adjusted EBITDA compared to the prior year period. Radiant’s less-than-truckload (LTL) business was not significantly impacted by recent industry consolidation. The company is actively looking for M&A opportunities and believes more opportunities will arise as distressed situations occur. CEO Bohn Crain expressed optimism about potential deals with distressed companies and emphasized a thoughtful approach to M&A. The company expects revenues to remain relatively flat for the rest of the year, with a likely softer quarter in March. Radiant is witnessing an acceleration of near-shoring and reshoring trends, particularly towards Mexico. The company is well-positioned to receive business from distressed truck brokerage operations. Adjusted gross margins are increasing due to a shift in product mix, with a larger focus on higher-margin domestic services. CEO Bohn Crain discussed the company’s financials, including EBITDA and adjusted net income, and their plans for capital allocation. He mentioned that the typical conversion of EBITDA to free cash flow is around $5 million per year, and that adjusted net income is a good proxy for free cash flow. The company also discussed the potential impact of the Daleray acquisition on their financials, stating that it would be small. Radiant Logistics plans to grow their absolute gross margin dollars and prioritize getting more of those dollars to the bottom line, even if it means having lower gross margin percentages. The company aims to leverage their technology, North American footprint, and global network to create value for shareholders and customers through organic growth, acquisitions, and stock buybacks. Despite current challenges, the company remains optimistic about their prospects and the opportunities available to them. InvestingPro Insights Drawing from real-time data, Radiant Logistics (RLGT) has a market capitalization of $272.01 million and a P/E ratio of 13.65 as of the end of 2023. The company’s revenue for the last twelve months of 2023 was $1.085 billion, indicating a decline of 25.62% in revenue growth. Turning towards InvestingPro Tips, it’s worth noting that RLGT’s management has been aggressively buying back shares, a strategy that aligns with the company’s plans to invest in stock buybacks as mentioned in the article. Furthermore, despite a decline in revenue, analysts predict the company will remain profitable this year, reinforcing the company’s optimism about future market improvement. For more insights and tips, consider exploring the InvestingPro product, which currently features nine additional tips related to RLGT’s performance and prospects. Full transcript – RLGT Q1 2024: Operator : This afternoon, Bohn Crain, Radiant Logistics’ Founder and CEO; and Radiant’s Chief Financial Officer, Todd Macomber, will provide a general business update and discuss financial results for the company’s first fiscal quarter ended September 30, 2023. Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes. This conference call may include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The company has based these forward-looking statements on its current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the company that may cause the company’s actual results or achievements to be materially different from the results or achievements expressed or implied by such forward-looking statements. While it is impossible to identify all the factors that may cause the company’s actual results or achievements to differ materially from those set forth in our forward-looking statements, such factors include those that have in the past and may in the future be identified in the company’s SEC filings, other public announcements, which are available on the Radiant website at www.radiantdelivers.com. In addition, past results are not necessarily an indication of future performance. Now I’d like to pass the call over to Radiant’s Founder and CEO, Bohn Crain. Bohn Crain : Thanks, Angela. Good afternoon, everyone, […]
