Radiant Logistics Inc. (RLGT) 2024 Q4 Earnings Call Summary

Optimistic Highlights

• Sequential Improvement

Net income up over 750%, adjusted net income up 94.4%, and adjusted EBITDA up 75% in Q4 compared to Q3.

• Strong Financial Position

Generated $31.2 million in adjusted EBITDA and $17.3 million in cash from operations for the fiscal year ended June 30, 2024.

• Successful Acquisitions

Completed five tuck-in acquisitions and deployed over $4 million in stock buybacks, finishing the quarter with approximately $25 million in cash on hand.

• Agent Station Conversions

Supported three agent station conversions in fiscal 2024, indicating a strong pipeline of opportunities.

• New Teams and Acquisitions

Welcomed new teams from Portland-based DVA Associates, Seattle-based Cascade Transportation, and Houston-based Foundation Logistics.

Pessimistic Highlights

• Year-over-Year Decline

Net income for the fiscal year ended June 30, 2024, decreased by 62.7% compared to the previous year.

• Revenue Drop

Revenue for the fiscal year ended June 30, 2024, was $802.5 million, down from $1,085 million the previous year.

• Decrease in Adjusted Net Income

Adjusted net income decreased by 42.4% year-over-year.

• Decline in Adjusted EBITDA

Adjusted EBITDA for the fiscal year ended June 30, 2024, decreased by 44% compared to the previous year.

Company Outlook

• Positive Outlook

The company is optimistic about navigating slower freight markets and expects to continue delivering profitable growth through organic and acquisition initiatives.

• Focus on Acquisitions

Plans to remain active in the M&A market, looking for opportunities that align with their valuation, structure, and fit criteria.

• Strategic Initiatives

Intends to re-lever the balance sheet through agent station conversions, strategic tuck-in acquisitions, and stock buybacks.

Q & A Highlights

• Q: Can you talk about the drivers of the outperformance in the June quarter? (Elliot Alper, from TD Cowen)

  A: It's hard to pinpoint specific drivers, but we are seeing sequential growth in volume and pricing. (Todd Macomber)

• Q: What are you seeing in terms of peak season and potential port strikes? (Elliot Alper, from TD Cowen)

  A: We did see some pull forward due to global events and potential tariffs. We are prepared to support our customers in case of a port strike. (Bohn Crain)

• Q: How do you see the market shaping up for fiscal year 2025? (Kevin Gainey, from Thompson Davis)

  A: We believe the worst is behind us and expect this quarter's performance to be indicative of future run rates. We are also focusing on acquisitions. (Bohn Crain)

• Q: Have seller expectations changed in the M&A market? (Kevin Gainey, from Thompson Davis)

  A: Seller expectations haven't changed much, but the numbers have settled down, making it easier to transact. (Bohn Crain)

• Q: Can you talk about the USA contract and its impact? (Kevin Gainey, from Thompson Davis)

  A: We are not in a position to disclose details but expect to be one of the first called for support in natural disasters and other opportunities. (Bohn Crain)

• Q: How much incremental EBITDA are the six acquisitions adding? (Jeff Kauffman, from Vertical Research Partners)

  A: We have not disclosed that information. (Todd Macomber)

• Q: Why were operating partner commissions down more than revenues? (Jeff Kauffman, from Vertical Research Partners)

  A: This is due to significant non-recurring project business and the conversion of agency stations to company-owned stores. (Todd Macomber)

• Q: What is holding back the global economy? (Jeff Kauffman, from Vertical Research Partners)

  A: We need our customers to conduct more business and invest in hard freight. The service economy doesn't create much hard freight for us. (Bohn Crain)