Radiant Logistics has experienced a rise in freight volumes as shippers look to get ahead of potential disruptions, including a possible dockworker strike at East and Gulf Coast ports slated for October 1. Additionally, concerns over changes in U.S. trade policy have prompted some shippers to move their goods earlier than the usual peak season.
Bohn Crain, founder and CEO of the Renton, Washington-based third-party logistics provider (3PL), addressed the situation in a call with analysts. While he didn’t predict the likelihood of a strike, Crain emphasized that Radiant is prepared to assist its clients. “If a strike does happen, we’ll be here to support our customers with diversions and other solutions,” he stated.
Radiant has also seen tightening on the West Coast over recent months as shippers move to avoid potential disruptions on the East Coast. This trend comes as the company navigates a challenging freight market.
Strong Financial Performance Amid Uncertainty
For the fiscal quarter ending June 30, Radiant Logistics (NYSE: RLGT) posted an adjusted earnings per share of 14 cents, outperforming analyst expectations by 4 cents. This marked a 1 cent improvement compared to the same period last year. Revenue for the quarter came in at $206 million, representing an 11% year-over-year decline, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) remained stable at $9.1 million.
Despite the revenue drop, Radiant managed to increase its net revenue margin to 29.4%, an 80 basis point improvement compared to the previous year. The company’s revenue, net of transportation expenses, fell 9% to $61 million.
Crain noted that the third fiscal quarter, which ended on March 31, likely marked the lowest point in Radiant’s performance cycle. From March to June, the company’s revenue grew 12% quarter-over-quarter. While there’s been a slight uptick in volumes and revenue per transaction, Crain doesn’t expect any major catalysts for significant growth in the near future. He sees the June quarter as the likely run rate for the company for now.
Cash Flow and Acquisition Strategy
In the fiscal year ending June 30, Radiant generated $17 million in cash from operations despite completing six acquisitions during the period. The company ended the quarter with $25 million in cash and no outstanding debt on its $200 million credit facility.
Crain highlighted that Radiant plans to continue using its balance sheet for growth through acquisitions. “We believe we are well-positioned to navigate slower freight markets as we work toward more normalized conditions,” Crain said. He also emphasized the company’s focus on profitable growth through a mix of organic expansion, strategic acquisitions, and stock buy-backs.
Radiant repurchased $4.1 million in stock during the fiscal year and currently has a market capitalization of $331 million.
At the time of reporting, Radiant’s stock was up 6.2% on Friday morning, outpacing the S&P 500’s 0.6% gain.
As Radiant continues to strategically navigate the logistics industry, its ability to remain flexible and financially strong positions it well to weather future disruptions, from potential labor strikes to trade policy shifts.
