Earnings call: Radiant Logistics posts loss amid challenging market

Radiant Logistics, Inc. (NYSE:RLGT) reported a net loss of $703,000 for the quarter ended March 31, 2024, a stark contrast to the net income of $4.183 million from the same period last year. The logistics and transportation company attributed the downturn to a sluggish freight market and industry overcapacity.

Despite the loss, Radiant Logistics experienced some improvements during the quarter and anticipates a sequential quarterly recovery. The company also highlighted its strong cash position, with $31.2 million in cash and no debt, and its strategic focus on organic growth and acquisitions.

Key Takeaways

• Radiant Logistics announced a net loss of $703,000 for the quarter, down from a net income of $4.183 million in the prior year.
• The company cited weak freight markets and excess industry capacity as reasons for the loss.
• Adjusted EBITDA for the nine-month period reached $22.1 million, with $16 million in net cash from operations.
• Radiant Logistics completed the quarter with a robust cash balance of $31.2 million and no debt.
• The company is focusing on profitable growth through organic initiatives, acquisitions, and converting agent stations to company-owned locations.
• Recent acquisitions include Daleray, the Select businesses, and Viking Worldwide.
• Management discussed stock buybacks, noting limited activity due to low trading volume but expecting an increase in the future.
• The company remains open to both smaller and potentially larger acquisitions if they align with their criteria.
• Radiant Logistics observed increased volumes in international shipments and trends such as near-shoring.
• The company is optimistic about improvements in the freight cycle and maintains a strong position in domestic time-definite freight forwarding.

Company Outlook

• Radiant Logistics expects sequential quarterly improvements moving forward.
• The company plans to drive profitable growth through both organic methods and strategic acquisitions.
• They anticipate a stronger fourth quarter compared to the third quarter, which is typically the weakest.

Bearish Highlights

• The net loss this quarter reflects challenges in the freight market and an oversupply in the industry.
• COVID-19 has impacted shipping volumes, though the company has not lost customers.

Bullish Highlights

• Radiant Logistics has seen month-over-month increases in business, with April outperforming March.
• Positive trends have emerged in various markets, including cruise lines, trade shows, retail store rollouts, high-tech, and humanitarian aid disaster relief.
• The company believes they are well-positioned to navigate through slower freight markets and deliver shareholder value.

Misses

• The company did not achieve the net income of the previous year's comparable quarter.
• Specific EBITDA figures were not provided, though profitability on an EBITDA basis was confirmed for January.

Q&A Highlights

• Todd Macomber and Bohn Crain discussed the expectation of business increases and a stronger upcoming quarter.
• The company has repurchased $3.1 million in shares and spent under $2 million on acquisitions over the past nine months.
• Radiant Logistics is comfortable with their current cash position and targets a leverage ratio of around 2.5x funded debt to EBITDA.
• Management remains optimistic about the future despite the prolonged slowdown and is focused on organic growth and supporting agent stations.
• The normalized EBITDA run rate expectation remains at $50 million to $60 million, though reaching this may take longer due to market conditions.

InvestingPro Insights

Radiant Logistics, Inc. (RLGT) is navigating through a challenging period, as reflected in the recent financial results. Here are some insights based on InvestingPro data and tips that could help investors understand the company's current position and future prospects:

• The company's Price to Earnings (P/E) ratio stands at 25.53, which may suggest that investors are expecting higher future earnings relative to the last twelve months as of Q3 2024. This is in line with the management's optimistic view on the upcoming quarters.

• Radiant Logistics' Price to Book (P/B) ratio is 1.22, indicating that the market values the company at a slight premium above its book value. This could reflect the company's strong balance sheet with a robust cash position and no debt, as highlighted in the article.

• In terms of profitability, the company has been profitable over the last twelve months, with a basic and diluted EPS (Earnings Per Share) of $0.13. This profitability is expected to continue, as analysts predict the company will remain profitable this year, despite the current year's anticipated sales decline.

InvestingPro Tips for Radiant Logistics also reveal that while analysts have revised their earnings downwards for the upcoming period and anticipate a sales decline in the current year, the company's liquid assets exceed its short-term obligations, and it operates with a moderate level of debt. These factors may provide some level of assurance to investors concerned about the company's ability to weather the current industry headwinds.

For those looking to delve deeper into Radiant Logistics' potential, InvestingPro offers additional insights, with a total of 8 InvestingPro Tips available for the company. These tips, along with comprehensive real-time data, can be accessed at https://www.investing.com/pro/RLGT. To enrich your investment analysis, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

Full transcript - Radiant Logistics Inc (RLGT) Q3 2024:

Operator: Good day. This afternoon, Bohn Crain, Radiant Logistics' Founder and CEO; and Radiant Chief Financial Officer, Todd Macomber, will provide a general business update and discuss financial results for the company's third fiscal quarter and 9-month ended March 31, 2024. [Operator Instructions] This conference is scheduled for 30 minutes. This conference may include forward-looking statements within the meaning of the Securities Act 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 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 and other public announcements, which are available on 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. Sir, the floor is yours.

Bohn Crain: Thank you. Good afternoon, everyone, and thank you for joining in on today's call. Our results for the quarter ended March 31, 2024, continue to reflect the difficult freight markets being experienced by the entire industry as well as our own operation. This extended period of weak freight demand, combined with excess capacity, continues to negatively impact not only our current results but also the year-over-year comparison to our record results for prior year period. With that said, we saw a very difficult January and then steadily improvements throughout the quarter, and we expect to report sequential quarterly improvement moving forward as markets find their way to more sustainable and normalized levels. Notwithstanding the tough year-over-year comparisons, we continue to deliver meaningfully positive results and have generated $22.1 million in adjusted EBITDA and $16 million in net cash for operations for the 9 months ended March 31, 2024. In addition, we continue to enjoy a strong balance sheet, finishing the quarter with approximately $31.2 million of cash on hand and nothing drawn on our $200 million credit facility. As previously discussed, we believe we are well-positioned to navigate through these slower freight markets as we find our way back to more normalized market conditions. At the same time, we remain focused on delivering profitable growth through a combination of organic and acquisition initiatives and thoughtfully relevering our balance sheet through a combination of agent station conversions, synergistic tuck-in acquisitions and stock buybacks. 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. In this regard, we're very excited about our recent agent station conversions with the acquisition of Daleray in October of 2023 and the Select businesses in February of 2024, which will combine to solidify our offering to support the cruise line industry in South Florida, along with our most recent acquisition of Minnesota-based Viking Worldwide in April of 2024. We launched Radiant in 2006 with the goal of partnering with logistics entrepreneurs who would benefit from our unique value proposition and the built-in exit strategy available to the entrepreneurs participating in our network. We believe these 3 transactions are representative of a broader pipeline of opportunities inherent in our agent-based network, and we look forward to supporting other strategic operating partners when they are ready to begin their transition from an agency to company-owned location. With that said, I'll now turn it over to Todd Macomber, our CFO, to walk through the details of our financial results, and then we'll open it up for some Q&A.

Todd Macomber: Thanks, Bohn, and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income, adjusted EBITDA for the 3- and 9-month ended March 31, 2024. For the 3-month ended March 31, 2024, we reported a net loss attributable to Radiant Logistics of $703,000 on $184.6 million of revenues or $0.02 per basic and fully diluted share. For the 3 months ended March 31, 2023, we reported net income attributable to Radiant Logistics of $4.183 million on $244.2 million of revenues or $0.09 per basic and $0.08 per fully diluted share. This represents a decrease of approximately $4.886 million of net income over the comparable prior year period. For adjusted net income, we reported $3.586 million for the 3 months ended March 31, 2024, compared to adjusted net income of $8.221 million for the 3 months ended March 31, 2023. This represents a decrease of approximately $4.635 million or approximately 56.4%. For adjusted EBITDA, we reported $5.280 million for the 3 months ended March 31, 2024, compared to adjusted EBITDA of $11.560 million for the 3 months ended March 31, 2023. This represents a decrease of approximately $6.352 million or approximately 54.9%. Moving along to the 9 months. For the 9 months ended March 31, 2024, we reported net income attributable to Radiant Logistics of $2.904 million on $596.4 million of revenues or $0.06 per basic and fully diluted share. For the 3 months ended March 31, we reported net income attributable to Radiant Logistics of $17.452 million on $853.3 million of revenues or $0.36 per basic and $0.35 per fully diluted share. This represents a decrease of approximately $14.548 million over the comparable prior year period or 83.4%. For adjusted net income, we reported $15.632 million for the 9 months ended March 31, 2024, compared to adjusted net income of $32.845 million for the 9 months ended March 31, 2023. This represents a decrease of approximately $17.213 million or approximately 52.4%. For adjusted EBITDA, we reported $22.083 million for the 9 months ended March 31, 2024, compared to adjusted EBITDA of $46.434 million for the 9 months ended March 31, 2023. This represents a decrease of approximately $24.351 million or approximately 52.4%. With that, I will turn the call back over to our moderator to facilitate any Q&A from our call.

Operator: [Operator Instructions] And our first question comes from Mark Argento from Lake Street Capital.

Mark Argento: Bohn, Todd, just any kind of color on the environment right now. I know it continues to be a little tough out there. But have you seen any kind of green shoots out there? Any sectors that are maybe starting to perform a little better across the platform?

Bohn Crain: Mark, this is Bohn. I guess I would start by kind of reiterating the prepared remarks, which was January started off really, really slow. And we have seen kind of sequential, February was better than January, and March was better than February. And kind of early indications, April is continuing to build on that trend. So I think we're effectively calling the bottom in terms of the slowness here. Quarter ended March is our seasonally slowest quarter as well. So we would expect prospective quarters to worked their way back to more normalized levels. What I think, kind of our world is similar to other, to the others that calls that you might have participated in. The international has been soft, but that seems to be improving. So we're seeing a little bit of light, I guess, in terms of the international or the performance of the international services within the solution set. Canada, who typically is, really, really shine bright, had their own struggles with the quarter ended March, but they're making meaningful progress there. Probably our, one of our most challenged areas has been in the intermodal space. But even that, too, we're very optimistic of the trajectory of what we're doing in Chicago with our bimodal initiatives. And for those that might remember, we, on a greenfield basis, opened a truck brokerage capability in Kansas City, kind of in the wake of Yellow (OTC:YELLQ)'s bankruptcy, that we're pretty excited about. So we've got a number of things working. If anything, I think what I would emphasize is, notwithstanding the really tough market, we think we're in a really good shape in terms of financial flexibility and no debt. And so we're kind of continuing to lean into this whole environment and try to identify opportunities to take advantage of kind of in this market environment. Because while the numbers are not where anybody wants them to be, on a relative basis, we think we're in really good shape and excited to continue to execute our strategy. And we've done, as I had kind of telegraphed on some of our earlier calls, we see a big opportunity emerging in the conversion of our agent stations to company-owned stores, we've all talked about kind of the gray tail and kind of the inherent pipeline of tuck-in acquisitions that we would expect to come to us over time. And that's manifesting itself, and we're happy and proud to be able to support our operating partners when they're ready to do that for us to kind of meet them at that intersection and support them in that transition. So everything is playing out kind of the way we would have hoped or expected. We're just unfortunately in this kind of global freight recession right now. But I'm pretty optimistic that the kind of the ultimate worst is behind us, and we'll kind of be rebuilding here and have an opportunity to hopefully get some things done kind of more strategically in an environment where a lot of people are handcuffed.

Mark Argento: That's helpful. And then I know, obviously, the balance sheet is in great shape and happily so. But at the same time, any thoughts on incrementally getting a little more aggressive here? Or are you just kind of whatever comes to you, it comes to you and it is what it is at this point in terms of deploying capital?

Bohn Crain: Yes. Well, we've always been, or I like to view or think of ourselves as always being good kind of disciplined allocators of capital. So we've never chased deals, and we're not going to be chasing deals in this environment. But I think kind of our view about kind of valuation and structure, that kind of work for us. I think the market is coming to us a little bit, if you will. So I think we'll have more of an opportunity to get things done in a way that makes sense to us in terms of value and structure. And we expect to be active in our stock buyback moving forward. We weren't particularly active this quarter, knowing that it was going to be a soft quarter and our stock is thinly traded. And we didn't want to kind of step into it, if you will, so to speak. But kind of, as the trading window opens up and all that type of stuff, we would expect to kind of be out there in the market beginning again to reengage in our buyback, so kind of continuing along the course we've been describing. It's kind of our baseline plan is a balanced approach of stock buybacks and the smaller tuck-in type of acquisitions. And if something larger comes along, we'll certainly look at it. But it'll have to kind of meet these fundamental criteria that we look at as we think about how we're deploying our capital.

Operator: Our next question comes from Kevin Gainey from Thompson, Davis.

Kevin Gainey: Maybe just to kind of delve a little bit deeper into the question about end markets. How are you, what are you guys hearing from maybe the manufacturing side or the retail side? Or what are you hearing from those customers as you kind of roll into the next quarter and maybe the back end of the year.

Bohn Crain: I guess I'll go first and then Todd can add in as appropriate. The, as has historically been the case when we're in these types of environments, we're certainly not losing customers. Our customers have just been shipping less in this environment. There was a lot of talk historically about COVID, safety stocks and excess inventories and kind of chewing through those inventories. And so as we think about kind of the international component, I think that is effectively playing out and that we're starting to see some increased volumes and opportunities at the margin on our international shipments. Some of the global conflict going on, that's acted at least as a temporary catalyst on price in terms of ocean and air freight that we're enjoying at the same time. The underlying trend of near-shoring and what's going on in Mexico continues to play out and remains a very interesting kind of area of growth and opportunity for everyone as we spend a fair amount of time talking about how to support our current and prospective customers that historically have sourced from China and how they're, I mean no one's abandoning China, but they're diversifying their sourcing strategies, and we want to be able to support our current and prospective customers as they're kind of executing against those diversification strategy. But some of the slowest markets to recover for those that have been on some of our prior calls, cruise line is certainly coming back, trade shows coming back quite strongly. So those are definitely some positives. We continue to do a lot of what I'll call retail store rollouts, kind of big distributions to the big box retailers, some of our underlying customers that are vendors to those big box retailers. That business is, I wouldn't say red hot, but it's certainly still there and moving along nicely. We do a fair amount of work in kind of high-value servers, kind of the high tech space, and moving servers around, here in the U.S. and around the world for some of our accounts. That continues to do well. Our kind of humanitarian aid disaster relief continues to see opportunities, given what's going on in the world environment. So those are some kind of areas or thematics that we observed within our own biz.

Kevin Gainey: Yes. That all sounds really good. Maybe you can also, at least what we've heard is there's been a lot more pushback from a pricing standpoint, at least in the entire transportation industry. And I'm wondering if you guys are encountering that as well, when it comes to your service offerings, that people are pushing back on pricing.

Bohn Crain: Well, I think, for the benefit of the listeners, I think what you're describing is we've been in an environment where kind of the pendulum of power has shifted to the customer, and they've been kind of doing their best to extract the best pricing they can out of the carrier base. But I think the pushback is coming is that they're just effectively nothing left to give from the asset-based guys. And to kind of build on that concept a little bit further, as a non-asset base, as a principally non-asset based 3PL, when the asset-based guys have excess capacity sitting idle, they effectively begin to offer service at irrational, unsustainable pricing because they've got some cost and they would rather keep their fleets rolling than sitting idle. And so that environment is a very tough environment for everybody, but including the non-asset based guys because the asset-based carriers are effectively taking as much freight as they can. And so there's not as much left over to enjoy, if you will, for the non-asset-based players. But if we look at that over time, the kind of this window in the freight cycle is a very small window in time within what I would call a normal rate cycle. And you hear a lot of people talking about an elongated recovery because this window is taking longer than usual to kind of work its way through. And that, there's obviously a lot of contributing factors. But when COVID and, was going on and there was such rich margins to be enjoyed by the transports, everyone out, was out investing in capacity. But, and then so we know what kind of happens at the end of that movie or in the kind of the down part of that cycle, which we're working through now.

Todd Macomber: Yes. I'll echo that. I mean, we're seeing increases in domestic international incrementally per quarter. And with those, I'm looking specifically at our net margins, it's volume. The volumes are starting to pick up. And at some point in time, obviously, we'll get back to more of that equilibrium and that whole, the scenario that Bohn's describing will obviously be behind us. So it's, I'm thinking that'll change in, hopefully, next quarter, here, this quarter we're in. And the dynamics of what you're discussing, I think, will be back to a more normal healthy environment for everyone.

Operator: And our next question comes from Jason Seidl from TD Cowen.

Jason Seidl: So I wanted to sort of get an idea about 4Q, given just how slow 3Q started. Can you sort of walk us through EBITDA per month so we can get a better feel of what the run rate is as we head into the quarter here?

Todd Macomber: No. We're not going to get that granular in terms of the deep, of our numbers. I think that would be problematic in terms of just disclosures. And I don't have to turn around issue an 8-K on the back side on this call.

Jason Seidl: All right. So let me ask you this. So were you guys profitable on an EBITDA basis in January?

Todd Macomber: Yes.

Jason Seidl: Okay. That's fair enough. Also, how should we think about the current mix between sort of your international air business and your more domestic stuff versus, and your ocean as well? I'm just curious where you guys ended the quarter on a mix basis.

Bohn Crain: I'll let Todd hop in because I'm painting with a broad brush. But historically, our core business is a domestic time-definite freight forward. So again, painting with a really broad brush. If we're normally a $1 billion revenue company, maybe $350 million or $400 million might be international. And then we could kind of peel that apart between air and ocean. But the bigger piece of the pie is on domestic. And when I say domestic, I'm including North America. So I'm including our Canadian business and Canadian cross-border and our Mexico and Mexico cross-border business is kind of domestic. And the international being true international, air and ocean, kind of coming to North America.

Jason Seidl: Todd, were you going to have a...

Bohn Crain: Historically, yes, have a go. So what, I don't know if you want to kind of peel that apart a literally further.

Todd Macomber: I agree with what you're saying, so.

Bohn Crain: Jason, I'll build on it just a little bit more for you. So on the, certainly, historically, we were, as we thought about international, we were much more airfreight than ocean freight. And then during COVID, we ended up doing a fair amount of ocean, kind of during the peaks of COVID, given all the constraints and everyone looking for space. So that was a little bit anomalous, kind of the spike in ocean kind of during the height of COVID. But you would expect us to be more heavily leaning towards airfreight than ocean freight in terms of margin contribution.

Jason Seidl: Okay. So as I think about the additional capacity coming on in the ocean space, you guys are going to be less impacted than your typical freight forwarder might be?

Bohn Crain: Certainly, because well, I think the answer to that is yes. Because most people, when they say freight forwarder, they think international freight forwarding. And again, the majority of our business is actually on the domestic part.

Jason Seidl: Okay. I just want to make sure we're thinking about the right...

Todd Macomber: I mean, historically, our gross margins, 65% of it, if you go back to the prior year, was domestic. So that's the, and that will continue to be, we'll have, it'll be absolute the majority, the vast majority of our net margins.

Jason Seidl: Perfect. And Bohn, as I, you talked a little bit about usage of cash, and I understand that it's going to be spread out depending upon where the market is. But at least for the near term, should we expect you guys to sort of just stay in that buyback and agent tuck-in mode? Because right now, given where your stock is trading, it might be just difficult to do any sort of other outside transaction for the multiple type?

Bohn Crain: I always want to choose my words carefully because I, never say never, right? But certainly, we'll continue to look with a great deal of scrutiny around the multiples that we pay and the relative trade-offs relative to the stock buyback. We really look at that in and around every transaction. So certainly, that's the, what you described is definitely the baseline case and kind of what we would generally expect to happen. But I don't want to paint myself into a corner where if a transaction came along that we really felt was compelling, we would look at it. And so I don't want to say anything on the call that would leave us at another conclusion than that.

Operator: Our next question comes from Jeff Kauffman from Vertical Research.

Q - Jeff Kauffman: So a lot of my questions have been answered. So let me go in a different direction. The last 2 years, from third quarter to fourth quarter, we've been dealing with this inventory destocking and what ended up being almost negative seasonality in a quarter that should be displaying more positive seasonality. Do you feel like that's going to be a little different this year? Like do you think we're past the worst of the storm and we're going to see more normal 3Q to 4Q seasonality? And then if you could just remind us because I don't think we've seen it in 3 years, what does normal 3Q to 4Q seasonality look like?

Todd Macomber: Yes. I mean, I, personally, I mean, it's too early to tell, right? But I do think it's going to be much more normal. I mean we're seeing increases, tracking, through tracking each month versus each quarter. And as we mentioned earlier, I mean, April has been stronger than March, et cetera. So, and typically, our Q3 is our weakest quarter. So we are fully expecting Q4 is going to be certainly much stronger than our existing Q3. So it's, so yes, I think it's, I think we're, what we saw in the past, I think that is, in my opinion, not going to, I mean, we're going to be back to more of a normal Q4 increase over historical Q3.

Jeff Kauffman: All right. And I know there's not a cash flow statement in the release. But if I was looking for the first 9 months of the year at an unaudited cash flow statement, what would be my year-to-date use of cash on acquisitions and share repurchase?

Bohn Crain: So obviously, that is in the Q that should also be filed by now, but Todd is looking here to give you that number.

Jeff Kauffman: Yes. I mean, we can always collect offline.

Todd Macomber: Yes. So share repurchases, Jeff, for the 9 months was a little bit $3.1 million. That's what we purchased through for the 9 months ended March 31, 2024.

Jeff Kauffman: Okay. So all the shares really this quarter?

Todd Macomber: Yes. And then as you also asked about acquisitions and payments to acquire businesses for the 9 months was just under $2 million. .

Jeff Kauffman: All right. So is there a certain, I know you're being opportunistic, and you're sitting on a powder keg of liquidity here for opportunities. But is there a certain cash level that you just don't want to go below, given the environment?

Todd Macomber: Not necessarily. I mean, I would answer, I'll come at that slightly differently, which is we would target probably plus or minus 2.5x funded debt to EBITDA in terms of leverage while leaving kind of cushion within our capacity. So we would be comfortable up to 2.5x. So that's kind of an answer. But we would, only with the kind of benefit of the cash we generated through COVID are we sitting in a net cash positive position. Almost always to the history of the company, we've been a net borrower and had amounts outstanding under our credit facility. So it's not that we're not prepared to, we're not seeking or intentionally targeting some targeted level of cash. At the end of the day, we're looking more at what are we comfortably carrying as kind of a net debt position relative to our financial covenants and all that kind of stuff.

Jeff Kauffman: One last question, Todd, if I can. So shares outstanding started the year around 49 million, and I'm talking fiscal year. And currently, they're right around 47 million. So they're down about 2 million shares, but you've only repurchased 0.5 million shares. I think I know the answer. But can you help me understand what that other 1.5 million share difference is? And is it a situation where if you return to profit and the stock goes up $1 or $2, are we looking at 48 million to 49 million in shares as opposed to 46 million to 47 million? I'm just trying to model here.

Todd Macomber: So I'm sorry, let's see, so we've, yes, we start, well, the treasury shares were 4.3 million at the beginning of the year June 30, 2023. And so we have, yes, we purchased 500,000 shares. So our treasury shares are now 4.8 million.

Jeff Kauffman: Right. But the fully diluted shares finished the fiscal year at 49.1 million, and they're currently 47 million-ish. So that's a 2 million share difference in reported shares outstanding on 0.5 million shares repurchased. I'm just wondering...

Todd Macomber: Yes. I think that dilution has to do with the fact there was a net loss in the quarter.

Bohn Crain: Well, I think it has more to do that there's out-of-the-money security that wouldn't be counted in that share outstanding basis. Let me get to the point you're getting at.

Jeff Kauffman: Yes. Right. So I guess my question is in terms of modeling, if you swing to a profit, will that drive it back to 48.5 million shares? Or is it something more to do with stock price?

Todd Macomber: Well, yes, it'll drive it back. Obviously, we'll recast calculations. And as those numbers change, it's going to obviously impact the overall fully diluted shares of the calculation. So the answer is yes.

Jeff Kauffman: Okay. Congratulations. Hopefully, this environment gets better soon.

Todd Macomber: Thank you, Jeff. We appreciate your support.

Operator: And we do have one last question from Mike Vermut from Newland Capital.

Mike Vermut: A couple of quick ones for you. Obviously, a lot of your competitors are, we've seen a lot of reports, are hurting pretty bad right now. And I believe some of your direct competitors do have a lot of leverage on that. They've been, I think the private equity zone. ] Have you seen any concern from their customers coming to you? Are you winning any new business? I guess what I'm getting here, is this, are we going to come out of this stronger than we went into this, forgetting about acquisitions, but just on the pure organic win basis?

Bohn Crain: Well, so I don't want to take advantage of the softball you're throwing out there, talk negatively about our competitors. So I'm going to stay...

Mike Vermut: I'm talking more positively about the balance...

Bohn Crain: Yes. Yes. We know. No, I think we are in a good relative position. Everybody's got their own set of constraints and their own strategies to address those issues, and we're going to do all we can to take advantage of the opportunity sets that come our way. And I can't, I don't know what some of those, I don't know what financial flexibility some of those folks have to go recapitalize their balance sheets or whether it's going to cause some other types of, or create some other types of opportunities, I don't know. And if I did, I wouldn't be in a position to say so anyway. But your observations aren't, we're kind of, candidly, we're kind of curious as well to see kind of what's going to happen out there because we're certainly not having a lot of fun in this market. But we're kind of top of class in my mind around the situation. So I don't envy...

Mike Vermut: on that topic though, are you seeing more deals come to market? Not necessarily ones that we would want, but are there more distressed companies shopping themselves around that may, may not be an interesting that? Are you seeing more?

Bohn Crain: Absolutely, and candidly, particularly on the truck brokerage side, right? There's a, that's been a really tough place for folks. And we've certainly, without any specifics, we certainly hear, heard and continue to hear, there's quite a few folks out there that are just go and kind of payroll to payroll, trying to live to fight another day. So they're, we've seen it underway, and I think we're not done with the constructive destruction that's got to take place over on the trucking side of things, in particular, return some more rational pricing to the marketplace.

Mike Vermut: Excellent. And then one last one for you. I know over the past couple of years, we, and I'd say we had peak earnings, I don't remember what we did, $70 million, $80 million of EBITDA. Now we're down here. And you had always said forget about the ups and downs, they are normalized. It's somewhere between, let's say, $50 million and $60 million, I think you said, maybe, if I remember correctly, somewhere in that area. Is that still a good bookmark? In normal times, we should be in that range, and, hopefully, everything that we're doing during the downturn, bringing in some of the agent, maybe some acquisition, maybe that creeps up over time. But has anything changed in your mind, that normalized-type EBITDA run rate for the company?

Bohn Crain: No. I mean I think the only thing that's changed is just this, is the elongated nature of this slowdown. So the time that it is taking us all collectively to get back to that normal is being extended kind of beyond what people were expecting. But in terms of how we think about the business, the opportunity set, the strategies, the, our areas of focus, none of that has changed. But probably what has, not directly responsive to your question, but we were, in some respects, fortunate we didn't go, do a lot of, take all of our cash and go do a lot of M&A and pay higher multiples for businesses or go to a tender offer for a bunch of our stock at $6 and $7 a share or whatever it was at the time when we would get those questions from time to time. I'm really glad we didn't do those things. Because we were as cautious as we were, it just put us in a better situation or we're better positioned. Some people are kind of burning the furniture, and we're not at all doing that, right? We're continuing to invest in the business and continue to grow and focus on organic growth and salespeople and supporting our, making good on our brand promise and supporting our agent stations and those conversions. So we are largely business as normal, notwithstanding the fact that this is a really tough mark.

Mike Vermut: All right. Excellent. Well, we're happy with the balance sheet, happy with the continuation of positive cash generation. So it'll get better and you're doing a great job.

Bohn Crain: Thanks.

Todd Macomber: Thank you.

Operator: Thank you. That is our last question. I'd now like to turn it back to management for any closing remarks.

Bohn Crain: Thank you. 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 relever our balance sheet and through a combination of agent station conversions, synergistic tuck-in acquisitions and stock buybacks. Through our multipronged approach of organic growth, acquisitions and buybacks, we believe we will continue to create meaningful value for our shareholders, operating partners and the end customers that we serve. Thanks for listening and your support of Radiant Logistics.

Operator: Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.