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Cost reduction offsets COVID impacts for Radiant Logistics in FQ1

Revenue improved sequentially throughout quarter

Containers moved at port (Photo: Jim Allen/FreightWaves)

Third-party logistics provider Radiant Logistics Inc. (NYSE: RLGT) is seeing an “extraordinarily tight” capacity environment as the company’s revenue continues to slowly bounce back from the pandemic.

The Bellevue, Washington-based multimodal transportation company reported Monday after the market close adjusted net income of $6.5 million, or 13 cents per share, for its fiscal first quarter ended Sept. 30. The result was in line with the same quarter in 2019.

“Through a number of cost-saving and other strategic initiatives we were able to manage our operating costs to mitigate this negative financial impact and keep our bottom line largely intact,” stated founder and CEO Bohn Crain in the press release.

Revenue was down 12% year-over-year, to $175.9 million with net revenue declining 17%.

On a call with analysts, management said its Canadian operations have held up well through the pandemic, partly due to bundling value-added warehouse services with other offerings. The company’s forwarding segment has been negatively impacted by declines in activity at cruise lines, retail stores and trade shows, which was somewhat offset by increased shipments of personal protective equipment (PPE) during the quarter.

Revenue did improve sequentially throughout the quarter. “Although the overall demand for transportation services has been significantly impacted, we are seeing slow and steady improvement across many industry verticals that we serve along with a broad-based tightening of capacity heading into peak season,” continued Crain in the press release.

Radiant’s key performance indicators

Tight capacity led to a 160-basis-point increase in purchased transportation expense as a percentage of revenue at 73.9%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was slightly lower at $9.2 million. Management said that the company’s gross margin eroded by approximately 30% to 35% during the depths of the pandemic, only half of which has been recouped so far.

Radiant generated $13.4 million in cash flow from operations, ending the quarter with $23.9 million in cash and net debt of $10.4 million, down from $17.1 million at the fiscal year end in June.

Management said they are continuing to look at the M&A market as the primary means to grow the business and increase returns to shareholders. However, they said the market for acquisitions is a little difficult to judge as the past 12 months’ results at potential targets are skewed either favorably or unfavorably due to the impacts of COVID.

“In the months ahead, we will continue to closely monitor how we and the economy are progressing and look forward to re-engaging in acquisition opportunities and/or our stock buy-back activities as the opportunities present themselves,” Crain stated.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.