Radiant Logistics again announced record quarterly results during its fiscal first quarter ended Sept. 30. The third-party logistics provider reported 21 cents in adjusted earnings per share, 11 cents better than consensus and 8 cents higher year-over-year.
Every vertical Radiant (NYSE: RLGT) serves, other than the cruise line industry, is seeing significantly higher-than-normal demand.
“Everything is a firefight right now and what traditionally were easy moves [international air and ocean shipments], capacity is just tight, said Bohn Crain, founder and CEO, on a call with analysts and investors. “We’re having to, kind of, consistently and perpetually interrogate the market to find capacity, literally box by box for the benefit of our customers.”
He said shippers continue to divert freight to the air to avoid port congestion when the price of the product can absorb the cost spread between the modes.
Radiant reported a 63% year-over-year increase in revenue to $286 million. Net revenue increased 41%, to $65 million, resulting in a 22.7% net revenue margin, 350 basis points lower compared to the year-ago quarter. Across the transportation complex, capacity remains constrained, which has pushed rates higher along with purchased transportation costs.
Crain said just a couple of months ago industry observers were speculating that the overworked supply chain could see relief around Chinese New Year. He said that’s likely been pushed back.
“I think everybody sees this going deep into next year, deep into calendar ’22,” Crain added. “There’s no immediate end in sight.”
Radiant’s ability to source capacity has allowed it to bring on new customers in recent months. Crain said its ocean offering has seen the most interest.
“There’s a lot of shippers out there scrambling to find capacity and fortunately we’ve been in a position to kind of step in and get opportunities to support customers where they couldn’t find capacity and allow us to kind of demonstrate some of our relationships in the marketplace to get things moving.”
Adjusted earnings before interest, taxes, depreciation and amortization increased 58% year-over-year in the quarter and reached $54 million on a trailing 12 months’ basis. Net debt leverage remained well below one-time trailing EBITDA.
Radiant plans to continue to use positive cash flow and the balance sheet to repurchase shares and seek accretive M&A opportunities. Share repurchases will likely remain the near-term priority of the two as many potential takeout candidates are demanding lofty valuation multiples, and as “our current share price does not accurately reflect Radiant’s intrinsic value or long-term growth prospects.”
The company has 3.8 million shares remaining on the current repurchase authorization, which expires at the end of the year. It expects the board to renew the program at that time.
Following the earnings print, shares of RLGT increased 7% in after-hours trading.