Radiant Logistics, Inc.

Good afternoon. Welcome to Radiant Logistics, Inc.' 's financial discussion for fourth fiscal quarter and year ended June 30th, 2025. This afternoon, Bond Crane, Radiant Logistics founder and CEO, and Radiant's Chief Financial Officer, Todd McCumber, will provide a general business update and discuss financial results for the company's fourth fiscal quarter and year ended June 30th, 2025. Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes. This conference may include forward-looking statements within the meaning of the Securities Act of 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 the 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 the website at www.radiantdelivers.com. In addition, past results are not necessarily an indication of future performance. Now I would like to call over to Radiant's founder and CEO, Bon Crane.

Thanks, Matthew. Good afternoon, everyone, and thank you for joining in on today's call. With the benefit of our diverse service offering and ongoing acquisition efforts, we continue to deliver solid financial results and generated $38.8 million in adjusted EBITDA for our fiscal year into June 30, 2025, which is up 7.6 million and 24.4% relative to the prior year period. The year-over-year improvement in adjusted EBITDA was driven principally through our acquisition efforts. For the year into June 30, 2025, our acquisitions generated $6 million in adjusted EBITDA, driven principally by our greenfield acquisitions of Seattle-based Cascade Transportation in June of 24, Houston-based Foundation Logistics and Services in September of 24, St. Louis-based TCB Transportation in December of 24, and Los Angeles-based Transcon Shipping in March of 25. along with the conversion of our strategic operating partners, Miami-based Select Logistics in February of 24 and Philadelphia-based USA Logistics in April of 25. Notwithstanding these strong year-over-year results, we expect to continue to see some near-term volatility tied to the ebb and flow of the ongoing U.S. negotiations around trade and tariffs. In any event, we continue to believe that there will ultimately be a surge in global trade as these tariffs disputes are brought to rest. In the interim, we intend to remain nimble in response to any tariff announcements by the U.S. administration and continue to support our customers in navigating these quickly evolving markets and executing thoughtful supply chain strategies for competitive advantage. As previously discussed, we believe we are well positioned with a durable business model diverse service offering, and strong balance sheet to navigate through a slower freight market. We continue to enjoy a strong balance sheet with approximately $23 million of cash on hand as of June 30, and only $20 million drawn on our $200 million credit facility. At the same time, we remain focused on the long term, staying true to our strategy to deliver profitable growth through a combination of organic and acquisition initiatives. while thoughtfully relevering our balance sheet to a combination of strategic operating partner conversions, synergistic tuck-in acquisitions, and stock buybacks. We made good progress in this regard over this last year, having completed three greenfield acquisitions and three strategic operating partner conversions in fiscal 25. In addition, earlier this month, we achieved a significant milestone with our acquisition of Mexico-based WePort, Mexico is an important market for us, and in addition to supporting Radiant's legacy and prospective customers across Mexico, WePort is well positioned to serve as a platform to help us continue to scale our North American footprint. We believe these transactions are representative of a broader pipeline of opportunities, which includes both greenfield acquisitions, companies not currently part of our network, as well as acquisition opportunities inherent in our agent-based networks where we can support our current operating partners in their exit strategies and look forward to providing further updates as we progress our acquisition efforts. With that, I'll turn it over to Todd Maycumber, our CFO, to walk us through our detailed financial results, and then we'll open it up for some Q&A.

Thanks, Bon, and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the three and 12 months ended June 30th, 2025. For the three months ended June 30th, 2025, we reported net income attributable to Radiant Logistics for the quarter of $4,907,000 on 220.6 million of revenues or 10 cents per basic and fully diluted share. For the three months ended June 30th, 2024, we reported net income attributable to Radiant Logistics of $4,781,000 on 206 million of revenues or 10 cents per basic and fully diluted share. This represents an improvement of approximately $126,000 of net income over the comparable prior year period, or 2.6%. Quarterly adjusted net income results. For adjusted net income, we reported $5,485,000 for the three months ended June 30th, 2025, compared to adjusted net income of $7,015,000 for the three months ended June 30th, 2024. This represents a decrease of approximately $1,530,000 or approximately 21.8%. For adjusted EBITDA, we reported $7,890,000 for the three months ended June 30th, 2025 compared to adjusted EBITDA of $9,078,000 for the three months ended June 30th, 2024. This represents a decrease of approximately $1,188,000, or approximately 13.1%. Moving on to the 12-month results. The 12 months into June 30, 2025, we reported net income attributable to Radiant Logistics of $17,291,000 on $902.7 million of revenues, or $0.37 per basic and $0.35 per fully diluted share. The 12 months into June 30, 2024, we reported net income attributable to rating logistics of $7,685,000 on $802.5 million of revenues for $0.16 per basic and fully diluted share. This represents an increase of approximately $9,606,000 over the comparable prior year period for 125%. For adjusted net income, we reported $30,944,000 for the 12 months ended June 30, 2025, compared to adjusted net income of $22,647,000 for the 12 months ended June 30, 2024. This represents an increase of approximately $8,297,000, or approximately 36.6%. For adjusted EBITDA, we reported $38,756,000 for the 12 months ended June 30th, 2025, compared to adjusted EBITDA of $31,160,000 for the 12 months ended June 30th, 2024. This represents an increase of approximately $7,596,000, or approximately 24.4%. With that, I will turn the call over to our moderator, to facilitate any Q&A from our callers.

Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star 1 on your phone. Thank you. Your first question is coming from Elliot Alperon from TD Cowan. Your line is live.

Yeah, thank you. This is Elliot Alperon for Jason Seidel. Can you talk about, hey guys, can you talk about the changing trade policy and how that's affected your business? I guess maybe more specifically first on the Mexico side, given your recent acquisition of WePort.

Sure. You know, it remains fluid, obviously, and there's, you know, it's fits and starts, right? So, you know, initially there were some pull forward, you know, with people trying to get ahead of tariffs. Then there's little inventory builds up. There were some, you know, warehousing constraints with everybody trying to navigate various strategies around the tariffs, including, kind of bringing freight to U.S. adjacencies, whether that's Canada or Mexico. So there's, you know, it remains an interesting time. I think we're seeing, you know, definitely a continued shift or diversification away from China to Southeast Asia. And markets like Mexico, we believe, will continue to be a beneficiary of kind of the trade dynamic. I can't tell you kind of which way the wind will blow next, but it will remain volatile or I would expect that it will. And, you know, we're going to be there to support our customers through that process while at the same time continuing to build out and solidify our own presence across North America. You know, for the longest time we've been strong in the U.S. back in 2015. We acquired another public company formerly known as Wills that represented our platform in Canada. And so our opportunity to partner with WePort in the Mexico transaction is kind of a continuation along the theme and making good on our own kind of vision or aspirations to really have a robust kind of one-stop shop opportunity for North America on a more comprehensive basis. And WECOR represents that for us, helping kind of complete our North American puzzle, you know, as we move forward.

Okay, great. And then, yeah, so we've seen a lot of volatility on the imports this year. I guess two different pull forward events. We've also seen kind of more capacity in TEUs come online this year. I guess, how are you managing your business differently given all that's going on? And how are your customers managing their businesses differently?

Well, it's been an interesting time. It's harder for the customers to manage their supply changes given the volatility. So a lot of a lot of shippers have been just doing their best to buy time, you know, in and around when they, you know, either, you know, getting in ahead of tariff effective dates or back to this idea of bringing freight, you know, either into Canada or Mexico, you know, while trying to decipher what's going to happen next or which commodities are going to be impacted and so on. So, you know, until more announcements are made around various, you know, commodities or times for changes, it remains difficult. And then, of course, we've got the whole, you know, whether the tariffs are even legal, I guess, is coming before the Supreme Court. So, needless to say, our and our competitors' customs brokerage operations are extremely active trying to keep up with with kind of these uncertain times and doing what we can to support our customers through that journey.

Okay, that's helpful.

And then maybe just one on the near term. So adjusted EBITDA was a bit below us, specifically EBITDA margins. I guess anything to call out in the quarter, any pull forward or lack thereof would be helpful. Thank you.

Yeah, I think it's more lack thereof. I think, you know, it was more of a pull forward in earlier periods. is what it was. And so, like Vaughn said, you know, I mean, people pull forward and you build inventories and you burn through them and then you need to get back to, you know, bring the product in. So, but that's what I was seeing. You know, it's, you know, I think it's, you know, it's timing, right? You know, and it's hard for us to really quantify when these things are going to change. You know, but clearly, you know, it's impacting us, you know, sometimes favorably and sometimes not. So, in this particular quarter, I think there was less pull forward is what we saw. so that's that's you know it's nothing alarming but it's and it's going to be to be expected but it's hard for us to quantify you know exactly how things play out in the near term thank you guys you bet thank you your next question is coming from mark argento from lake street your line is live hey guys yeah just a quick follow-up on on the last question in terms of the eva doc

I did notice, it looks like depreciation and amortization in the quarter was down at like 3.6 million, running closer to five a quarter. Obviously, that ad back wasn't there for us. Did you guys end up writing something down?

No, no. As Vaughn mentioned, in 2015, we did a pretty big acquisition wheels group, and that was a 10-year life. And so basically, it was a substantial... amortization associated with that acquisition that basically got to the end of its life. Now the numbers you see for this quarter are going to be more baseline going forward. It's purely that.

The wheels deal fell off with the amortization.

Just pivoting back, obviously you guys have been super aggressive or active. I don't know if aggressive is the right word, but active on the M&A side. and buying in. I mean, you know, a lot of these guys you're buying, you're doing business, you know, you're integrating, you've already, you know, they're already almost integrated effectively. Is there kind of a capacity limitation? Is there any reason you couldn't do 10 or 15 of these a year? I mean, not to get overzealous, but, you know, maybe you just talk through how you're thinking about the pipeline and your ability to do more of this.

Sure. You know, we've always talked about kind of what are the constraints around acquisitions. And we really don't think there's a true constraint on interesting acquisition candidates. And given our low leverage, we've got ample capacity to do deals. So the ultimate constraint really becomes our ability to kind of integrate and digest the things that we acquire. And Mark, you'll remember we've historically thought of having a couple of different platforms to support M&A. So we've historically had our U.S. forwarding operation platform. That's where you're seeing all of our agent station conversions occurring. We also have our U.S. intermodal and truck brokerage platform in Chicago where we're looking to do transactions. That's where we were able to do the TCB transaction from. And then we have our Canadian platform where we're always interested in exploring Canadian-type opportunities. And now, most recently with WePort, we'll have yet a fourth – I think of that as yet a fourth platform where we could explore kind of other potentially interesting opportunities from a Mexico standpoint to continue to build out our capabilities. in Mexico and kind of coming back, you know, for the longest time we've talked about our, you know, extreme low leverage on our balance sheet. And as we kind of work our way back to a more normalized level, we have quite a bit of capacity within our existing capital structure to continue to grow, you know, particularly when you consider kind of the free cashflow characteristics of the business, you know, that's kind of part and parcel of what we're doing. So, I like your choice of words. I really don't view us as being aggressive, but I do view us as being active. And I think, you know, kind of the overall market dynamics, you know, kind of point the arrow our way right now. So we're, you know, we're trying to lean into that opportunity. And we're really excited about the things that we're doing. as well as some other kind of organic initiatives that are pretty exciting that we're working towards.

And this final one for me, in terms of, you know, the tariff situation and, you know, we're getting also getting closer to year end here and the holidays and everything else going on. I mean, is it, are you starting to see any activity, like if a country Looks like they've come to terms with the administration. All of a sudden, you start to see things maybe moving around a little bit more and around those geographies, or everybody's still playing a little bit of wait and see here, regardless that we're two and a half months or three months out from your end.

Yeah, well, I think people are generally expecting, and I guess I would call it a muted peak. I don't think we're going to see the traditional peak season that we might have otherwise. But we do have kind of these underlying thematics of kind of more freight being sourced out of Southeast Asia. You know, I don't think that's going away. But the growth, you know, I can't say enough about the growth that, you know, has occurred and is expected to continue to occur in Mexico. And so, you know, I think, you know, it was really important for us to expand our presence, not only for kind of new opportunities, but to support our own existing customer base as they themselves are diversifying more and more of their own supply chains kind of to a kind of a near sourcing type strategy.

I'll tell Paul. Awesome. Thanks, guys. Appreciate it.

You bet.

Thank you. Your next question is coming from Jeff Kaufman from Vertical Research Partners. Your line is live.

Thank you very much. Congratulations, guys. Crazy year. You know, Bon, I'd like to go revisit your comment about getting a little bit more active and levering up. Do you have a particular target where you don't necessarily want to level up past a certain point as you relever the balance sheet and grow?

I think the short answer is yes. I think for me kind of the normalized target would be call it plus or minus two and a half times. That's not to say we might – I mean, who knows whether we'll ever get there. But at the same time, we might flex up a little bit more than that on a very temporary basis if we had the right type of transaction. But we certainly don't have any expectations to go lever up at 4 or 5x like some of our DE-sponsored competitors might.

Well, and you stepped up and acquired a Mexican operation at a time when the the trans-border tariff situation is a little bit unclear. Was that a special situation, or are you seeing this more as an opportunity where, look, eventually we're going to get these tariffs figured out, and if we can find the right international partners, it makes sense?

Well, I think it was opportunistic. I also think it's the right international partners. But we all, myself included, have a tendency to think of – the U.S. being the center of the world, but there's a big set of global commerce going on where we're not necessarily the center of. And there's an extraordinary amount of trade between China and Europe and Mexico. And WePort's international business really was virtually little, if any, cross-border business. It's true international air and ocean business. you know, from the Pacific and Europe. So, you know, we have for a long time been in the cross-border business independent of the WePort transaction. But what we really didn't have was a strong, true international air and ocean capability as it relates to Mexico that we now enjoy by operation of the WePort transaction.

Okay. And just a couple of detailed questions for Todd, if I can. Todd, I think you answered an earlier question on the DNA. So there's a step down there and 3.6 is kind of the right forward run rate we should be thinking about. Was that the answer?

Yeah, I'd have to look at it closely. But I think if I remember correctly, we did the acquisition right at the beginning of the fourth quarter in 2015. I mean, we're going back 10 years, right? So, but, you know, I can validate that, but I'm pretty sure it was at the very beginning of the quarter. So I think what we've got, you know, we could circle back, but, you know, that's kind of my only question is, was there some within the quarter, which I don't think there really was. I think it really kind of fell off, you know, the wheels transaction at the end of Q3. But I just want to validate.

So the wheels came off at the end of Q3. Got it. So the way I think about, I guess, 26, there we go, is it's going to be about a $4 million drag on EBITDA in terms of the comparison, 26 over 25. Is that the right way to think about it?

For EBITDA, you're saying?

Yeah.

Well, I mean, it's an ad back, right? So, you know, it wouldn't.

I'm sorry. It's a benefit. Thank you. Thank you. Benefit.

Yeah. So it'll help us, well, it'll help us for, you know, net income, right? But it'll be, it's kind of, I think it's, you know, it wouldn't matter with EBITDA, correct?

Correct. And then just two other quick detail questions. The contingent consideration ad back, that was just kind of more of a one-timer, but these things happen every now and then. Yeah, you know, we...

know we have to evaluate all the time you know we do that every quarter and you know we've got some headwinds going on right now and it's you know it's it's you know quite honestly it's impossible for us to know what where we're going to be 18 months from now but we do our best and use our judgment to kind of true up where we think the overall contingent consideration liability what it is today and you know we're always adjusting and sometimes we adjust up and we adjust down you know so

Let me hop in one second. Jeff, for me, that kind of line item is really just a manifestation of our earn-out structure at work, right? Mitigate to ensure we don't overpay or underpay for the businesses that we're acquiring.

But overall, you'd rather be a payer of that contingent consideration because that would mean the earn-out.

Of course. Overall, we would, but at the same time, You know, if we have a benefit, which means we had overestimated the liability that we're needing to unwind. Correct. You know, that is just kind of a, again, just kind of the earn out structure at work to protect us from overpaying or to mitigate.

Okay. And then last question for Todd. Todd, thank you. I was expecting a 24% income tax rate this quarter, and I see in the detail tables that you're saying that should be the effective tax rate. But taxes were a net add to that income. What happened with taxes this quarter?

Yeah, that was a true up basically with the end of the year. You know, when we went through all the calculations, the net net was an actual benefit, slight benefit. And so that's, you know, it's an overestimate in the prior period.

Okay, so that's just evening up an overpayment.

Yeah, so I would not expect that going forward, right? You know, I would use a normalized rate going forward, and this was just simply a true-up when we went through all the mechanics. So definitely don't use this.

Thank you. You bet. No, I appreciate that. Thanks, guys. Yeah, you bet, Jeff.

Thank you. Your next question is coming from Mike Vermitt from Newland Capital. Your line is live.

Hey, guys. How you doing? So, you know, our numbers have held up, you know, our results much better than most in our space, right? So, you know, hats off to you guys. It's been very steady, great results. And you've played a lot of offense during this downturn at a time where, you know, I guess most haven't. Most have kind of held back and haven't done the acquisitions that we have. So it's really laid the foundation for, what I see for the future for when things start to pick up. Any way to give us a look, you know, you've brought all these new entities into the fold, what your customers are saying, new business wins that are out there, you know, just a sense of what it's going to look like over the next year, two years that you see and how it's going to be additive to the business. You know, we're one of the few that's actually gone out there and expanded and in this time so hats off to us you know you've kept the balance sheet in perfect shape our numbers are great our cash flow is great and i assume that our customers are loving what we're doing it's just we haven't gotten that kind of view into it so if you give us a little look as to what we should expect over the next year two years with what we've brought in yeah thanks mike that's a great question you know we are really

you know, we've been talking a lot here internally recently about just getting, you know, kind of working towards a more unified sales organization because we've got so many tools in the toolbox and we want to make sure that our sales organization is in the best position possible to kind of sell all of the products and services. So, you know, more so than ever, you know, we're starting to see cross-sell opportunities and kind of, you know, really getting at kind of this notion of wallet share within customers and selling more services. And, you know, particularly, I'm just going to kind of reflect back on our acquisition of Navigate a few years ago. And if you'll remember, it has some really interesting technology that we picked up as part of that transaction. that you know is for all intents and purposes a you know a state-of-the-art market differentiating what i'll call collaboration platform that we really don't see anybody else in the market place having something quite like what we have and so we're on the front end of beginning to roll that out with customers. And we're getting some really positive feedback around that. So it's definitely early innings, keeping with the baseball metaphor as we're approaching the end of the regular season.

But we're really excited about the whole

kind of our position on the field around technology and our technology set and how we think that's going to be a differentiator for us moving forward.

Excellent. Yeah. You know, we've obviously our valuation has been at a massive discount for years. And so the hope now is that people start to realize customers, you know, I guess acquisition targets and investors, what has been created here. So, Yeah, hopefully things like that on the technology side, on the new customers, on the acquisitions, that starts to gel. You know, it's been great when things have been really soft, and it should be super as things expand. So, you know, hats off to you guys.

Thank you. Thanks.

Thank you. That concludes our Q&A session. I'll now hand the conference back to Radiance founder and CEO, Bon Crane, for closing remarks. Please go ahead.

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 through a combination of agent-station conversions, synergistic tuck-in acquisitions, and stock buybacks. Through our multi-pronged approach, 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. Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day.

Thank you for your participation.