RLGT - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to your Radiant Logistics Conference Call.

This afternoon, Bohn Crain, Radiant Logistics’ Founder and CEO; and Radiant’s Chief Financial Officer, Todd Macomber, will discuss financial results for the Company's Fourth Fiscal Quarter and 12 Months Ended June 30, 2019.

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. these future on events. based and current has about projections Company forward-looking its statements expectations The that Company's These and be expressed and Company or unknown statements materially risks, cause forward-looking are results such uncertainties assumptions subject different from implied about or achievements by results or actual to the known may to the achievements the statements. forward-looking

the forth actual materially impossible factors website such www.radiantdelivers.com. those that future the may Company's set announcements, Company's and the Radiant the from statements, to differ may SEC in in to all results other our at public identify is are achievements factors it that which on While the or forward-looking have the in those past filings identified cause include be in and available

results an future In indication not addition, necessarily of past performance. are

to Now, the yours. and to CEO, floor Radiant's Crain. over founder call is Sir, the I'd Bohn like pas

Bohn Crain

thank on afternoon, in you Thank joining everyone, you. and Good for call. today's

or of for million, record million up attributable to of (sic) key record up income and XX%; up million, revenues record million of $XXX.X adjusted report of up We’re results million, $XX.X with record million] million, million million $XX.X common or net or adjusted XX.X%. revenues of $XX.X or [$XX.X income financial to XX.X%; to $XX metrics, financial $XXX.X million, common several $XX.X $XX.X up stockholders attributable fiscal $X.X solid EBITDA another net record XX.X%; $XX.X very across record or net stockholders of XXXX including pleased year X.X%; results million

increased from year over our to terms up the comparable adjusted a set also XXX new XX.X% addition, In in record XX.X%, of EBITDA points which basis prior period. margins, we

in and the and supporting are expansion discussed, previously cost benefits to incremental Adjusted our ongoing small investment we continue the excited gross of we've business EBITDA leverage As in scale technology. margin to drive as very about is further very our opportunity margins the next the we of dollar of our

million, revenues $X.X Canada's In fiscal transportation $XXX.X net $XXX.X million $X net the comparable added XX.X% XX.X% comparable reported for million were comparable of net period, or up $X.X X% U.S., XXXX, million, while and $X.X from $XXX.X million net period. million prior added or revenues net year net of prior the million over $XX.X up prior were million value the of year XX.X% reported while or the or $XXX.X and up or year or $XX.X or $XX.X million million our revenues services transportation Canada's up $XX.X comparable of revenues period, prior XX.X% year comparable value U.S. million we $XX.X were period. In the up or $X.X million up of over services million were of over revenues million year up period. Canada, revenues revenues X.X% $X.X up XX.X%. prior we revenues, XX% $XX million, in of from million

softer for We ended XXXX freight what recognized environment. fourth given generally quarter also our a XX, June with was results as pleased are the fiscal

or prior relatively $XX partner economic net period the a and Although revenues. basis year comparable in of we $X.X net generally to of quarter, over million company reduction reduction EBITDA the up on saw $X.X a million, XXX points, margins, XX.X% revenue in the during in revenues up the was which by improving offset operating resulted Adjusted million impact commissions, flat

to XX.X%, for increased in we addition, a adjusted basis In saw prior XX.X% points from also XXX the our comparable up margins, record year EBITDA improvement which period.

$X.X prior income up of million $X.X common also or comparable $X.X for $X.X and adjusted million, addition, income net reported million, XX.X% to million shareholders attributable the stockholders In net to we attributable up common year of period.

cash for strong and flows, year from deliver the operations also cash business $XX.X cash ended XX, three generated June million generating XXXX, in operations to in the months million $X.X The for June ended from continues XXXX. XX,

Having on of to million. approximately debt Company's down stock trailing $XX.X net quarter EBITDA retired million XX, as $XX.X less of June we $XX.X the $XX had December, last pay twelve-month one-time million ended facility total the and the we million continue credit and million, preferred drawn adjusted $XX our approximately of debt than

online the one, on customers the deployed platform, booking the number functionality through TM, On continue also tracking direct technology and air integration in provided of initiatives, the Two, our strategic forwarding the SAP piloting TM progress and SAP our over international freight network, front, new our and that operating our strategic transition of customers of management and our make event-based continued our meaningful us operating customer with within stores XX locations of partner ocean new database of and was now functionality, we computing business. cloud access to computing cost is with SAP power, our effective new production grow SAP-based system to our continue across a transportation scale through to continued including and provides environment technology platform, locations. Company-owned to onboarding we as other both which the portal expansion of the completion Amazon's including

of our combination to through initiatives. head growth longstanding and we into year, a growth remain As deliver the strategy we've organic acquisition to committed profitable

cash acquisition flows, low for leverage geography, purchasing search free to strong bring our that and to offerings. sheet, complementary candidates disciplined power continue and service have platform our current our We respect with critical on balance mass

for open over our walk to some results, it With through it financial Q&A. that, us to will CFO, then our detailed I Todd turn up Macomber, and we'll

Todd Macomber

everyone. afternoon, good and Bohn, Thanks,

adjusted and Today, X XXXX. including ended months income we the XX for financial EBITDA June results, and will XX, adjusted discussing net be our

months net the income and revenues and three $X,XXX,XXX basic June allocable diluted XXXX, reported million per ended we common of $X.XX or XX, stockholders to For of $XXX.X share.

and an prior approximately year $X.XX over or diluted months ended we common of revenues, XX, basic fully the on three This net of reported X%. allocable comparable per to represents $X,XXX,XXX period stockholders the XXXX, million $XXX,XXX income For June of share. $XXX.X or increase

For $X,XXX,XXX. the June common adjusted ended we attributable three reported stockholders to net XX, XXXX, months income of

attributable XX, $X,XXX,XXX. This June adjusted reported to increase we net approximately of income For months of $X,XXX,XXX XXXX, stockholders the ended XX.X%. represents an common approximately or three

EBITDA the We $X,XXX,XXX $XX,XXX,XXX reported adjusted EBITDA months for approximately of ended XX%. June increase ended three $X,XXX,XXX for to XX, three XXXX. the represents compared June months of or of XXXX, approximately adjusted an XX, This

XX to along Moving month results.

to income of a $X,XXX,XXX $XXX.X basic the fully For reported of a and XXXX, ended on allocable June on per XX consideration. per change in stakeholders $XX,XXX,XXX months of we or gain which XX, revenues, $X.XX million included $X.XX net share, diluted common contingent

of common reported $X,XXX,XXX million $XXX.X allocable $X.XX represents per XX, $X,XXX,XXX to and June revenue, on or over net approximately $X.XX income diluted stockholders we year comparable of prior ended months XX an the XX.X%. For of or the This period, basic XXXX, share. increase per

the attributable For income to of XX adjusted ended net stakeholders months June XXXX, we common $XX,XXX,XXX. XX, reported

XX, XX.X%. months the $XX,XXX,XXX we net XX income attributable represents of June ended increase stakeholders of For XXXX, or adjusted approximately common to This approximately reported an $XX,XXX,XXX.

EBITDA XXXX. approximately of for reported June XX.X%. XXXX, ended adjusted adjusted of XX, the EBITDA an approximately of months represents ended the $XX,XXX,XXX XX June increase $XX,XXX,XXX $XX,XXX,XXX months for This or We XX, XX to compared

to our I that, back callers. moderator to Q&A call from the With our will over facilitate any turn

Operator

Global. floor questions. open from The Please Instructions] your comes is first question. Our for of [Operator state Kevin question now you. Seaport Thank Sterling

Kevin Sterling

and Bohn Todd. afternoon, Good

Bohn Crain

afternoon. good Hey,

Kevin Sterling

Yes.

the kind at I Can when what quarter happened, being say well, seems few of different cost. model still here -- it softer that past, asset maybe big you whereas and is, is profitable mean can not So, Bohn, -- everything it If down can the in be. than your help when a really your of some the it drive system, is is of today, been business what’s scale, have now the and may years is drivers revenue I be acting is EBITDA, this this understand light, like environment, maybe I through either to this to new by your think kind you obviously, office little us is that what’s years of that profitable dig an ago it’s or may supposed And into key past? and seems wins, years pretty me performing case? net picture back I model even to kind be revenue a by look flushing happening. freight let a model here, like new than And, growth have in not

Bohn Crain

I’ll a talked start we’ve number pieces to I with, sure. made There hitting guess, replace business we Yes, mean, factors. a you kind of pieces I few of margin decision business. think points. as of salient quarter, with been I certain And to conscious exit low-margin that of we able last about contributing of higher are the are

that’s of part the thematic. So,

stores. we year, their volumes out commissions reduction the a about activities, through provide we which in freight of why the health in some performance in international our operations forward agent relative rather our move the trade gross of to and ultimate through of to our then, Company-owned more of goes narrative time, last on agent-based operating stores we of the the such that activities as paid stations certainly think to less our commission. as of agent-based stores absorbing to There to the or were given I operating you of that the function Company-owned is the agencies. highlighting our softness of in partners strategies was Company form why flowed ultimate in some of continue as happen And is actually piece results of margins effectively kind as position the than to -- in make exit it of are down kind promise a stores contribution stores, brand to sensitive fiscal ultimately going see reason kind opposed the Company-owned ultimately and how the our some of our bigger, attributed partner the good it a big financial as and XX% land business flow And of part war

to been costs things metrics gross working and dollars our scale the efficiencies terms back infrastructure of continue we that in investments back to of the kind I gross drive and think, continuing beat dollars well office margin the of of in provide bottom all help more effectively, are to technology way drum, in without as grow as the the helping that as line. get our margin ultimate those us we’ve office hard to that growing and making

of the margin believe a quarter, history quarter EBITDA the comparative basis, I of ever, I in face but what even of kind margin quarter, think that was still probably we EBITDA. the highest softer best on was for a million of so, in that Company a that on quarter the only was delivered, the And not $XX

Kevin Sterling

And Yes. you so, records I are breaking think, again.

Bohn Crain

still. Still, Indeed.

Kevin Sterling

stop. Don't Yes. Yes, still.

that you into dig me little a let if bit mind. So, more, don't

And revenue this wins are have of Are contribution you think you is the highlighted new little new about organic than in ago? wins and so, business some growth just and incremental may better margin coming to of some net business. opportunities, to bit a higher business a that and it what quarters maybe thought EBITDA organic growth, obviously couple these

Bohn Crain

know industry deliver would continue additional to continues and I that for broaden up say I worse. for don't we And approach organization. that I as our initiatives, would numbers it look those certainly to continue of better to the to positive think that. or we’ll kind put results characterize we verticals industry through vertical

invest we're looking that strategy. vertical because such success and said is resources to vertical incremental for had succinctly, vertical broaden approach, in guess, approach industry and can the more strengthen I working, So, to sales we’ve that work, opportunities that in continues

Kevin Sterling

Okay.

like So, with pipeline? your at additional business as look pipeline, how we wins, -- think healthy sales it as pretty should your sales does we organic look growth potential about opportunities, you

Bohn Crain

in reasonable a X% we comfortable You’re a of feel our out here twice a I margin topic come I target. to We with kind sales X% guess think, and to walking which focused we're the frame engage want margin growth talking our call to me the then, back thinking terms And this But, on idea leverage. limb to is gets that, of and with dollars back gross grow to investors to it of -- dollars. growing on expect is, our pipelines. about too the way our EBITDA gross we kind far on in still try

that that So, playing without game, ourselves to health those and baseline, still hot base pre-acquisition the in hard getting -- and dollars we working EBITDA terms metrics those cold and into of around in the are pipeline gross of growth. of margin deliver kind growth

Kevin Sterling

flow in I cash -- fair. said generated operating Okay. What know quarter of I That free generation? And, million. the Bohn, No, was think, that's helps. cash you flow $X.X

Bohn Crain

investment the quarter? Todd, do for technology you our have

Todd Macomber

on. investment, hold Technology

is technology $X.X the million. $X.X For versus million quarter,

about $X.X million. So, it’s

Bohn Crain

cash million from of $X that for IT off investment. take So, operations

So, you’re $X plus free flow. in million cash or minus

Kevin Sterling

Very good.

lastly, and seems Okay. Canada, to like off I'll in Thank seeing highlighted continue? Canada jump it you in What back better. and that And trend you doing But, are expect is then, you. maybe queue. Do hop Canada? you

Bohn Crain

Yes.

it think, Radiant including that's little plus And where in And of that. organization -- Clipper, -- great it. now of Wheels even think, at easier dollars. To Canada bit time. we million as a Clipper, Canadian time of acquired point a dramatically for the kind context at conversation put of I the is it, is doing, that this call C$XX the of kind Canadian back was excluding benefit it XXXX, me was acquire outperforming or Wheels in in we minus EBITDA Canada. Radiant Wheels organization, I the dollar and Canada Radiant when Back rebranded kind in

of and I So, early of of at was of largest that transaction our acquisition. not, the you back are of just kind pause that and the to lot certainly, looking do the and you of acquisition, Wheels we you beginning definitely the happy in in we're cause the did and not the at kind for acknowledge kind transaction, glad that was of kind have days or decision road a pleased time look to transaction bumpier. on good Canada. for back the we're we -- the a can which quite But, glad We're transaction? are us, done say, things did you And Wheels think, now little

up value there marketplace. proposition a our there. logistics doing some they job. has continue the with Harry and really contract what call, giving folks to offering us about most is combining how service bundling in up We are talk fantastic services the Smit core differentiated team effectively do a type and things -- transportation would strategy lot a impressive And

Operator

Any further questions Sterling? Mr.

Kevin Sterling

Thank got. Thank your That’s you. evening. for I all you time this

Bohn Crain

Thanks, Kevin.

Operator

next Instructions] from Cowen. question Jason question. your Please Our Seidl [Operator state comes of

Jason Seidl

about of operator. of debt. Hey wanted along little bit hey talk sort you, the I a use taking for some cash more to Bohn, Thank with free outlook on Todd. potentially your

Your [technical difficulty]

Operator

Instructions] Mr. you. Hey, lost Seidl, I believe we [Operator

Bohn Crain

restate his I’ll questions, can let in the I fill blank think, I for but him it.

Jason, sorry. So, go ahead,

Jason Seidl

hear guys you Can Hey. me now?

Bohn Crain

Yes, we can. Yes.

Jason Seidl

which acquisition? versus to out I flow how when generation where what come be of work you sword in ones own marketplace look look terms any cash was to ability on large buying you your stock, your Yes. free is, then, No, trading always at at when and back your about And double-edged versus up. acquisitions take you saying do your debt, they this in stock’s balance the tuck-in can with your a Forget liquidity. that seem how

Bohn Crain

Yes.

majority alluded that tuck-in take kind kind looking is smaller -- of the acquisitions. at I we’re what the have From time, continue at to, from which we we transactions. I'll a up, we do, you’ve the certainly, the said, to as guess, in that. They traditionally be be marketplace larger us compelling larger would look we’ve of time So, would to the to top, transaction. continuously pay for transactions effectively to like would And do look of

with at least done it have before success Wheels transaction. the once with We

would doing for compelling It we consider. it’s something that something strategically would have something it’s But, to would us definitely look we consider. at So, to that. be like

it’s at back to is enterprise times to at bluntly, question, I’ll that M&A we which trading own think or a about on plus the Now, whatever our say when your more bring to EBITDA how context currently minus of value or trading into six basis. try stock answer activities do broader

of part times at the think, XX least we idea the would I is answer we is so, the the question of And to of a to value we business XX and think is believe have to that kind continue we that that to in build link multiple. grounded intrinsic

we of value the So, doing. in -- ultimate creating that what value of the about is and transactions we're context intrinsic think

around volatility to play being our allocation of ever tried short-term anything able long-term accomplished. that terms sure I'm manage stock, capital out not of quite would we get in of the how our to If

types in a find points particularly to these valuation quite buy we ultimately would at how right that back market willing couple type of about minus other regard, or our sheet. up today. If it of around this And see of of of we so, plus also kind that we're should the our we And a normalized own stock. ratio I We're be kind us around conversation. debt-to-EBITDA would and multiples this And opportunities, people conversation data don't of cash, M&A think the comfortable buying fully expect we to accumulating about in stock, a part then, think in we of as would leveraging conversation funded leverage. normalized balance ultimately, include a X be times call think, to

of folks balance for in hard really and we paying summer we've just call, have of debt our the when on since our XXXX. secondary. in kind in ever then, we of got the as effectively reminder this public a the been had We’ve delevered never financial relevered And we've did flexibility some -- put the we of more XXXX have position the business than And we worked this to Company. where ourselves history off sheet

the the in context a President. stock we're of marketplace tweeting with of worked think So, allocators and terms to acquisitions, lot create. our of continuing heart which tuck-in the look of your the at options committed good got be I of question. is to ultimately of And in comprehensive and to opportunity all a vagaries front hard in which our buybacks, we taking we've us, We're transactions, capital, of larger

complete but I brain-dump. sure did So, if to I’m your justice that's not question, the

Jason Seidl

that in in I you plus be take Bohn, Is get out said the the for as marketplace, may in near-term, minus you the and because correctly? what willingness some with properly there you as see times you is, like say, could an tuck-ins guess, realize higher to if dilutive with something it's usually they around while right that the you're help or yourself. because bit multiples that Well, it longer-term, marketplace you obviously, a in little a the But the acquisition. fit, do giving Wheels saying such integrate buy protecting now, that them will potentially come, X

Bohn Crain

Yes.

The short be accretive, basis only reason is I still building kind be transaction a I larger a think, relative the wouldn’t larger on intangibles transaction looked a think, enterprise since be The would on quarter-on-quarter, answer accretive. amortization GAAP relationship is, yes. the that of a at would financial caveat customer EPS one the of it if -- would even basis, type here. XXXX, underlying be talked of we year-over-year we we're of being, false about because to which adjusted negative

Jason Seidl

Okay. a having September more away Landstar one And, today go heard on I’ll little than about and M&A, just bit trends from less more talk [indiscernible]. We towards out that are Bohn, a ask there. here, seasonal

Just, market. spot in they're XXX% the obviously

you're September seeing now, what Radiant. curious right Just at here in

Bohn Crain

I in a comments little more forward-looking Landstar be. is choose their than aggressive to

I'll put So, this I way. -- think, it

ended us the is I think, business. earnings this for of the indicative of run rate June or power quarter

whatever in that to handle in our growing all-in-all, we're our we've best business. way. coming little And, I ever of But, been is focused have our through kind bit think, the of seasonality We we're rolls a business. on position

Jason Seidl

or So, this quarter most the saw recent intact? trends that are you more less basically,

Bohn Crain

true. That's

Operator

your Please next comes Thompson Our Davis. Campbell Instructions] question from David of [Operator question. state

David Campbell

to into agents environment to in your I environment attractive bit fit been -- And haven't about surprised Hi would you heard haven’t agent bit talk business strong soft Hi than environment. Company-owned which soft think network. offices, that smaller I’m a in able Bohn, secondly, surprised this I I'm likely trucking find of acquisitions, that converting be little more to a Todd. any acquisitions you a would Bohn, happen

a little out haven’t you with at help that. why us So, I'm found you anything? Can on surprised all

Bohn Crain

doesn't stations exit One, our and when two, as for to mean -- here to ready. kind they're think Company-owned ready, comments. I you couple not about we haven’t, their effectively I because ready, are them And on to of our that good a just strategies haven't when call, stores, converting agent we one. partners told yes, operating they're I set the provide a probably Well, level have when but our support everybody we're

of we to With try getting to they conversions. where that demographics want of none are terms any said, meet So, agent of younger, the them be kind station including us in do of of referencing. the rate And our over talking believe, we you to kind are will agent station partners. of conversion across that are time, folks owner increase. I categories And, the certainly met

our just both network. we We’re acquisitions, to constantly one just external conclude chose It’s talking tuck-in type and internal have yet. to to not

David Campbell

-- second know, ago the question than forwarding substantial Pacific. success has market guess is, you business, stronger freight the on the freight had the had you in in some and that market the I I the forwarding especially acquisition business international transatlantic And been business, Atlantic Philadelphia the years in brought

that So, hasn’t can relatively you the than that freight it has. better? I'm your surprised, do I Is done explain or -- situation, better understand forwarding

Bohn Crain

think acquisition done was because years year-over-year -- agency acquired action reference there is softness And basis, whether see a Air. one little a that’s before was to us ultimately tariffs. a stations relative This to fastest a I remains But, we of have hard ocean By happen ahead in acquired that premature to operations your an probably Philadelphia SBA You growing of mean, to international the growing. most modes our large conclusions it of of think, whether somebody international segments. the -- our accelerate in modality with on might ocean immediate pull were And a standpoint, Philadelphia that ocean our else I a From it Service side. a draw that going basis the we the one at forward slowdown, have to ago, we try pinpoint agent get to quarter, it’s nicely. tuck-in one whether confused to to smallest historically, up our ultimately transportation. absolute to international. some But, was is what’s of was -- of same on on continues quite I It’s some time, small

while part driven So, for the was by the in quarter for revenues the international year, the was in decrease kind up international meaningfully. of

David Campbell

Thank Okay. else let have you very I’ll it. much. someone

Bohn Crain

you. Thank right. All

Operator

There appear to questions I this will be closing to at turn back further the no over remarks. for time. management conference now

Bohn Crain

right. All you. Thank

close progress me that the at saying model. by on based and Let we remain we prospects we’ve very non-asset created bullish very remain excited growth and our that scalability our the here platform business with and Radiant, of

freight people Our networks, first-to-market building agent-based to our and believe advantage low towards and We support in and our strategy and continue going infrastructure an this consolidation multi-brand now we a and a executing a enterprise position to with puts the leverage sheet, almost unique office represents in term in further to the technology marketplace. investment in us scalable eye invest opportunity, on consolidating technology out balance support XX-year and a more ongoing our forward. than back larger longer perpetual world-class, forwarding much

for persistent operating that listening serve. Thanks Logistics. the vision, will deliver partners, believe our we customers for meaningful Radiant which patiently pursuit this time our of and long-term your in the of support we value We’re shareholders, over and end

Operator

This you. participation. conclude does your thank today's you Thank We teleconference. for

time, a day. at this and lines your great You have may disconnect

Radiant Logistics (RLGT) 12 Sep 192019 Q4 Earnings call transcript