RLGT - Earnings call transcript Q1 2020

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Operator

Thank you for joining us. This afternoon, Bohn Crain, Radiant Logistics Founder and CEO; and Radiant's Chief Financial Officer, Todd Macomber, will discuss financial results of the Company's first fiscal quarter ended September 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 and to CEO, Radiant's Crain. over Founder call I'd Bohn like pass

Bohn Crain

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

financial report We the are to ended pleased first very of another results XX, quarter for September XXXX. solid quarter

down able $X.X of comparable we period, While our revenues year prior million were the over $XX.X deliver X.X%. or $XX.X $XXX.X million, million million of net up to revenues were

to margin the reduction trade capacity business non-recurring factors three, global associated with market number to our A year period; our truck low the project slower ago work revenues, excess relief on softness that exists with and earlier and disaster marketplace. general certain our brokerage contributed one, including; decision in in of the two, associated exit margin in pressures year; operations reported in

million $XX.X up year X.X% the of reported in XX, net $X.X million the revenues $XXX.X prior of For we million, our first September and ended comparable million, $XX.X down X%, fiscal revenues or period. over or quarter U.S.,

$X.X or million the net or XXX.X%. of X.X% U.S. were revenues prior $X.X U.S. period. services $XX.X million comparable revenues were from value-added up million year of million up transportation net $X.X

period. and XX.X%, the were million the XX.X%. year down Canada's million net period. were $X.X prior $X.X $XX.X down net value-added $X.X net reported X.X% of transportation services million, million, revenues from revenues up year or Canada, or down $X.X of we of million prior XX% comparable revenues revenues In over $X.X million million or $X.X of Canada's $X.X comparable million or

also how are continues with to and softer model environment. recognized We is perform as pleased generally non-asset-based our freight what a

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

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

for outlook our would we looks flows are as this expect a basis upcoming trade the most relatively into generally peak seeing traditional sequential the heading not the we that are recent pleased with on for quarter, flat the While holidays. season results quarter we

build digesting continue of landscape. current part and we prospect the industry, an tariffs impeachment inventory the global of As capacity associated ups and excess to trade, are truck that through market with uncertainties work with along the

and present of in profitability, and as our believe growth we past back-office take event, incremental acquisition balance our themselves. to to well positioned opportunities leaves in delevering infrastructure any scalable year invest this they sheet continuing over In us success advantage our organic delivering very

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

Todd Macomber

Thanks, Bohn including September XXXX. for will afternoon, three income net adjusted everyone. EBITDA XX, our months results and the we be discussing adjusted good and ended financial Today,

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

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

income XX, to per we $X.XX stockholders September common the $X,XXX,XXX and three For reported basic fully net or of attributable months share. ended adjusted diluted

to share. XXXX, This and $X,XXX,XXX attributable common the net increase reported represents stockholders we XX, or adjusted months For per or $X,XXX,XXX of XX.X%. an approximately ended of income $X.XX basic three September diluted fully approximately

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

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

Operator

is the and your [Operator Instructions] Seidl Thank to go Company. and you. floor open gentlemen, now Ladies We'll Cowen for Jason first questions. of

Adam Kramer

Jason. Adam Thank on for This you. is

I far? what like of little with the and you guys tariff trade obviously ask peak or bit peak it looked? ongoing Has how the season issues, about a of looked so are XXXX to seeing season wanted question, regards kind dynamics First to or kind was more are specifically thus XXXX far,

Bohn Crain

season think than it the I peak rather are people peak speaking, calling season. generally the

I it's I marketplace So in the forward not of Coast, anyone been I my unique to, I of West surprise peers we're broader just on are, forward in at given advance that trying talked to and guess some tariffs we're of our it's to industry and kind not particular volumes, the just part not know that the process. full the inventories were people of warehouses I've for least inventories pull us of pull conversation the – in in a from think recognition kind have of seeing guess is, the that us not and and uncertainties

we to kind and got and customers through, we've of to that we've some got through work we those So dynamics. work the of serve, our –

So December look as isn't ended in our commented this to comparable like we point, peak. quarter us for last kind year's going our at remarks, of prepared

it's going comparable just think to the I more to reported. quarter we look

So $XX quarter think for and about is million certainly that on. given the the what's a pleased EBITDA or I basis in relative marketplace on still we're going minus something and plus uncertainty the

I response So question. your hope that’s my to

Adam Kramer

Very helpful. Yes, definitely.

what ongoing customers potential Do hopeful will with Just from a you that second customers war to be is regarding them? a China? or or are you one hearing from at reached kind trade hearing of one for near possible resolution guys me. What that or the resolutions your are seem all

Bohn Crain

want my on too over out get to that wouldn't far I one. skis

near-term deal they business anyone think leverage having a position our opportunities we'd resolution. that the we all think the and opportunistic optimistic just myself again, I little as am non-asset and viewpoint, model, on that would relative I to themselves. in very, to present cautiously respond about we're good as a be very I sheet as like to I geopolitician. the to just skeptical not back within position to of, that I'm low of based more uncertainties being I'm as But our to have aware kind I are know, on come be a of a balance

would continue the – position in things to still on storm a things And went are, things they if great as some we're well. sideways, whatever weather be if doing are we're extraordinarily horizon. And there

can't might we to a the that predict whatever know So future position in reasonably our way. deal we're only good with come

Adam Kramer

the seeing back for you Great. into of and final guys for valuations? a queue. pipeline Maybe on color. Thank update terms are quick in one that Thank I'll How me M&A, you the And looking? jump just is just a then you. what

Bohn Crain

sure. Yes,

kind got and certainly I've the to find opportunities for to transactions we for few leverage where looking make So different we've to, in deals, low sense a do look the we right of categorically continue we're land to buckets. as deals those if right can that do alluded

a For about in network. time agent that conversions long participating of our are stations existing talked

transactions forward we either outside would we So types network, even partners of present tuck-in support of than themselves, its and transactions. to multiples doing well look our would larger can or opportunities on multiple ultimately acquisitions certainly then create the larger look kind and those implied that type of dynamic the And may transactions. as The part higher trading own own those prove the challenges. of some our – is be of be where would market clearing

on or with of a can other $XX any And a stock. multiple EBITDA So at we Xx better there deal, Logistics of Radiant I zero a right the we do don't the if think I the look of same the end At the for out don't I value integration day, I know risk at landscape, that of million know larger Xx. kind buy absolute businesses would. time as we our transaction than

here as So capital that allocation forward. going think a about our remain will we alternative viable of

generally back smaller But we is the looking are actively nature to to would transaction for M&A, larger specifically we certainly be asterisk right the would look that the the tuck-ins with a at opportunity transaction. and in expect

Adam Kramer

it. for the Got time. guys you Thank

Bohn Crain

you. Thank

Operator

to Street Lake next Argento go Mark of We'll Capital.

Mark Argento

Hey Todd. Bohn, hey

ones here. couple a Just of quick

update in I know of you Just last terms XX in said, in any technology locations. your quarter integration, running SAP been you'd I think

you where seek rollout? to are the wanted guys Just with at and SAP

Bohn Crain

progress. the continues begun Thanks in a the now international have pilot functionality to international capabilities That We have locations. to of Yes. and Mark. activated handful

calendar across be that solution move – able will it will aggressively the more deploy peak folks that out robust across piloting the the I broader proves program. busy. And calendar. network, that I are the be As would round various as season out see is get backside brands, to to expect XXXX, and guess the of of kind more a on what as we would in rollout in to network international

tweaks short user feedback, make to the continue is we to make modest progress, to take long story good user enhance continue experience. But

So now having within approaching networks. transactions XXX,XXX the we're TM across occurred I think

that the and forward, So cash continue order we'll system within from captured shipment. it's and functional, process, it's lifecycle in to on shape We've track. good progress of fully the but moving operational the to

Mark Argento

And small guys grow holidays then base, strategy? but typically And any of business e-commerce off just you go-to-market type guys pivoting centric services, the grow around see an value-added uptick on holiday more on relatively value-added still said a you do continue to kind services? to with that you of continuing you then thoughts that providing the

Bohn Crain

yes. and yes So

this of Canada added core like it kind bring conversation services start are they remains just interest of logistics side the that success having us. with would for value offering. success in area context their yes, border. to and U.S. Again, bundling on of and the So transportation service of back – and trying the contract, the We're I to an that

customers also include to solution some We're various bit opportunities existing of with get for traction existing Canadian cross-sell and in broaden between geographies being of as U.S. the starting to little Canadian some to a our able customers. the

to continue we'll value-added services move to growth potentially even and to exciting that's continue opportunities expect as we forward. M&A So thematic a be

That the just can the take they experience you services as the form nicely take two of the continue immediately small mind that form value of and enhance to contract areas or can where It base, and grow although come proposition. a on user overall to mentioned, brokerage logistics. customs

Mark Argento

can one us the buyback Last you just of kind share on what availability with remind but for me, Thanks. saw place, built you in that?

Bohn Crain

up X authorized and how were have it yet. share we to we believe that was into structured, not is million tapped I

of currently its So That terms we own that current under expires we on X on. paper XX. million action authorized have December shares program could

yet. those as decisions we it, a around separate would release would that I be not or and haven't time. issue will forward that here move do that finalized would expect, evaluating would So refresh at if press been we X-K and renew we whether we When we

Mark Argento

Thanks, Bohn.

Bohn Crain

you. Thank right. All

Operator

Loop We'll Markets. of move Capital to Kauffman Jeff

Jeffrey Kauffman

much. you Hi, Thank you? guys. How very are

Bohn Crain

Good, Jeff.

Jeffrey Kauffman

chest. talk bit war to the little a wanted I about Good.

For noticed for acquisitions, leases. you FAVs I the that adopted

you any where there changes and like So you have amount the credit or may opportunities it for bit. much of Can a optically the from the talk dry anything metrics little using – how that balance that right sheet powder full about you limit are that?

Bohn Crain

Okay. Thanks, Jeff.

facility we questions, good have credit $XX I reminder, a in million ABL a place. guess So, as

million I have $XX roughly facility. million we on $XX that think drawn

frame to it's facility, right the sets kind of gross currently begin of under in where that it gross availability. availability out $XX million So least would at terms of at like

incremental the acquire. we we customers adding of we that did would As would the the in acquisitions, get benefit of AR

appreciates. of it I So, where aspect at people is may it, way about necessarily that least the to like kind an think and with story our think one because sheet all of balance I not

capacity. just let's it guess so express of And to I of terms kind in

So – with just for some a and playing math second.

our used transactions went – series assume of acquired let's and $XX that So earn the and over a EBITDA aggregate we that million out traditional did be would mechanism. of in out

half So need at half in outs, of acquire million of power, $X would in that so acquisitions. closing purchasing $XX at a $XX $XXX to cash of million earn of million effectively we be portfolio multiple cash, would million

our ultimate think we that. I the structure, that And do takeaway could existing is within capital

could So EBITDA virtually with to million common acquisitions from smaller go to $XX we of our acquiring $XX shareholders. of million no serially EBITDA dilution

Jeffrey Kauffman

Okay. kind invested What an you That's give and the up us still great. needs in? you What's along of to that investment update running? Can are where be of IT path?

Bohn Crain

Sure.

I So the appropriate. into that's – a just it you well, of and kind jump going I'm think the me of as question, right. middle can big into jump then I'll redirect – just to

Airgroup when time, on company acquired a from on level are in an I SAP from were They accounting first just So guess the SAP. we beginning We've shop. platform back SAP the been standpoint, the XXXX. set, we of in

So third-party TMS deploying to from that which transitioning CargoWise domestic SAP. SAP always modular an TM's took We've been shop. to done. a a SAP away deployment, product, called We we've been approach first we've

We are middle the going of piloting that which all international well is functionality, the on front. in

environment our production the cloud the we've AWS into meantime, In deployed environment.

our think shape. good in as really infrastructure. really, scalability we about So of We're

In to financial $X we're spend, call would million terms probably million spend year. a of it $X

care If me as indirectly ongoing of I technology feeding our is but anticipate our about $X to earmarking that cash million ask what I operations collectively of million where to were flow or the from and precisely, the of of we are trying you cash free this in question think you're didn't – we're kind kind of platform thinking is $X would and portion kind at to expect spending flows cash and all thinking land point. we –

talk portal progress. that strategies place. And things kind portal, initiatives platform in really And portal a in that we a would customer number the a have portal, of of of we in partner those to under operating and have a different about terms way leverage of interesting number carrier we when all are of

kind of on idea is to one third-party will first America of in and is, that technology manufacturers logistics – be there we of and SAP companion companies of a of SAP. So our platform deployed in a hard shippers investment big the is North to operate have universe SAP-TM, our freight

only freight, operating bring on platform. put of, an to customers people improvements those not we to that a them new move their have believe able drive And to value also in of that to with SAP SAP ability upon a into is them unique we because to, SAP going environment. they back in fact been engage historically offices proposition position that's us call their the the but And and really which kind like are own to productivity help back an to

Jeffrey Kauffman

Thank you. was great That a Bohn. answer,

Bohn Crain

All right. Thank you.

Operator

& [Operator Company. Thompson, Instructions] Davis Campbell to We'll of move David

David Campbell

which gross sustainable the increase Thanks the been last that business down? my for in in two margins, profit or think quarters? you have quarter, adjusted the taking what and Bohn about it think XX% do you the slows could Do question. current Todd, as sustaining roughly

Bohn Crain

sustainable, is guess, of it I as think expedited. those volumes because lower trade naturally remain a my our long I David, international reaction weak, so domestic some traffic that margin, volumes at to moves recover our international is as

as stay higher the little So though like a getting we as current is growing gross dollars I improve, I which about down necessarily around margin gross of between which things mix is an as think a margin as to environment, brokerage margin will go in many this think our we think percentages margins and domestic and international and thinking why of kind actually getting and intermodal truck dollars on. gross basis charters and conversation on into to line so counterintuitive, to about deeper without and bottom can absolute those the opposed

David Campbell

the margin So that pressure lower is than domestic domestic business, under the your a businesses. more – international is so

margin? profit a that help sustain So gross should

Bohn Crain

had I least believe said to Yes. intended I what or that's at say.

David Campbell

right. Yes,

going deals soon. some anytime if a if international to but the pick course going deal up to that there of is with up So Chinese pick is China, there's

be the quarter profit a your very first gross the very you gross – margin is answer. the really next year ability that. situation tough and in good. doing very, much margin margins, maybe profit first indication well hold But you're of So would the Thank for to

Bohn Crain

you. Thank

Operator

this I at gentlemen, turn any questions have time, And no holding. other I'll additional comments. back for or the closing conference

Bohn Crain

Thank you.

that of and Let non-asset-based we've me created the close growth remain by platform the Radiant we saying very scalability bullish our model. business on at that

Our now ongoing on sheet a base further executing puts and agent leverage position technology to in in our strategy support consolidating first consolidation. multi-brand networks, unique more than advantage to us low in reporting and XX-year investment our balance market

almost believe to larger an eye we toward represents enterprise this back forward. We much world-class perpetual technology people continue going support opportunity our building our to longer-term out invest a and and with and scalable infrastructure in a office

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

Operator

and today's and day. at Ladies that you gentlemen, a We for may and will disconnect participation, time conclude you great this your have conference. thank

Radiant Logistics (RLGT) 13 Nov 192020 Q1 Earnings call transcript