Fourth Quarter Results
Radiant Logistics (NYSE: RLGT) achieved record revenue of $260.9 million in the company’s fiscal second quarter (the fourth quarter of 2018). It beat Wall Street consensus revenue expectations of $230 million according to Benzinga. Radiant Logistics’ revenue increased 26.2 percent or $54.2 million year-over-year (Y/Y) from $206.7 million.
Radiant Logistics is based in Bellevue, Washington and works in third-party logistics and multimodal transportation services. It provides freight forwarding, truck and rail brokerage and value-added supply chain services.
Radiant Logistics also beat Wall Street consensus of non-GAAP earnings per share (EPS) of $0.10 by 60 percent according to Seeking Alpha. Quarterly EPS were $0.16 and adjusted net income was $8.2 million. However, GAAP income increased $500,000 to $3.8 million with a diluted EPS of $0.07, missing the consensus estimates of $0.10 by 30 percent according to Seeking Alpha.
Radiant Logistics’ quarterly earnings call focused on the numerous record financial milestones achieved by the company. In addition to those outlined above, this included record net revenue of $64 million, which increased 35 percent or $16.6 million Y/Y. Record adjusted earnings with interest, taxes, depreciation and amortization (EBITDA) was also reported at $12.5 million, increasing $5.4 million (76.1 percent) Y/Y from $7.1 million.
Net revenue margin increased by 160 basis points (bps) Y/Y from 22.9 percent in the second fiscal quarter of 2017 to 24.5 percent in the same quarter of 2018. Adjusted EBITDA margins also increased by 440 bps Y/Y from 15.1 percent to 19.5 percent.
“We are pleased to report record results and the continued broad-based improvement in our financial performance for the second fiscal quarter ended December 31, 2018,” said Bohn Crain, founder and chief executive officer at Radiant Logistics.
Crain said that Radiant Logistics’ growth strategy was focused on vertical sales. He named government services, retail and humanitarian aid as focus areas for Radiant Logistics’ business. While Radiant Logistics has made nine acquisitions since 2006, it made no acquisitions in 2018 and increased revenue organically.
Expenses
Total operating expenses for the quarter were just over $252 million. The cost of transportation made up 78 percent of expenses at nearly $197 million. Operating partner commissions made up the next largest operating cost at 11 percent (over $28 million), followed by personnel costs at 6 percent (nearly $16 million), selling, general and administrative expenses at 3 percent ($7.5 million), depreciation and amortization at 1 percent (under $4 million), with transition and lease termination costs and change in fair value of contingent consideration under $500,000.
Regional Operations
“In the U.S. we reported revenues increased 29.1 percent Y/Y or $52.3 million to $231.8 million, and net revenues increased 36.0 percent Y/Y or $14.7 million to $55.5 million,” said the quarterly report. “Transportation net revenues increased 35.3 percent Y/Y or $14.2 million to $54.4 million. Value added services net revenues increased 83.3 percent Y/Y or $0.5 million to $1.1 million. In Canada we reported revenues increased 6.2 percent Y/Y or $1.7 million to $29.3 million, and net revenues increased 28.8 percent Y/Y or $1.9 million to $8.5 million. Transportation net revenues increased 24.4 percent Y/Y or $1 million to $5.1 million. Value added services net revenues increased 36 percent Y/Y or $0.9 million to $3.4 million.”
When asked how current tariffs affected operations, Crain said that the majority of revenue generated by Radiant Logistics is within North America. He also said the company’s current record milestones give it confidence for 2019.