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Radiant Logistics benefits from COVID-related freight

Management ‘very bullish’ on opportunities for Radiant

Radiant Logistics outpaces expectations (Photo: Jim Allen/FreightWaves)

Third-party logistics provider Radiant Logistics (NYSE: RLGT) is seeing “slow and steady improvement” across several of the verticals it serves. Management from the company called specific attention to strength in government freight, which includes COVID-related supplies, on its call with analysts Tuesday after the close.

Company Founder and CEO Bohn Crain is recovering from COVID and was unable to join the call.

The Bellevue, Washington-based company reported adjusted net income of $8.6 million, or 17 cents per share, for its fiscal second quarter ended Dec. 31. The result was more than twice the consensus estimate and beat the prior-year result of 12 cents.

“Our overall results have been positively influenced by tightening capacity and positive demand trends within a number of the business sectors that we service,” said Crain in a press release. “These demand trends have produced positive results that more than outweigh the headwinds that are still being experienced in some of the sectors that continue to be challenged by COVID, such as in the retail, hospitality, travel, and trade show sectors.”

Revenue was up more than 8% year-over-year but net revenue declined slightly as purchased transportation expenses increased 240 basis points as a percentage of revenue. Radiant’s net revenue margin was 25.3%. Management said capacity tightness will linger for a while as freight moving from West to East continues to be impacted by equipment shortages given delays at the ports.

Management will continue to weigh potential acquisition opportunities against share repurchases, noting they are “very bullish” on the company’s prospects. Total debt remains less than one turn of earnings before interest, taxes, depreciation and amortization, which was up 34% year-over-year in the quarter even though net revenue declined.

Management did caution that M&A multiples have generally been a headwind to acquisitions of late. However, the company is pursuing a number of smaller deals that aren’t on the radar of private equity, meaning the purchase price may be more palatable.

“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 in the release.

Radiant Logistics’ key performance indicators

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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.