Radiant Logistics navigating downside of freight cycle

Renton, Washington-based 3PL Radiant Logistics beat analysts’ expectations for its fiscal first quarter ended Sept. 30.

Radiant (NYSE: RLGT) reported adjusted earnings per share of 9 cents for the period. The result was a penny ahead of the consensus estimate but 7 cents lower year over year. A $1.3 million charge, or 2 cents per share, was incurred in bad debt expense tied to the bankruptcy of auto parts manufacturer First Brands.

Consolidated revenue of $227 million was up 11% y/y and $20 million ahead of the consensus estimate. Incremental revenue generated from recent acquisitions was only partially offset by a soft freight market.

Adjusted earnings before interest, taxes, depreciation and amortization of $6.8 million was 28% lower y/y. An 11.4% adjusted EBITDA margin was 500 basis points lower. (The adjusted EBITDA margin would have been 13.7% without the bad debt expense.)

The company outlined a longer-term revenue opportunity from expanded customer adoption of Navegate, a proprietary global trade management platform. It said the offering, which aggregates and organizes supply-chain data, provides customers with improved routing and capacity purchasing tools while reducing costs.

(Radiant acquired Navegate in 2021.)

“We believe this speed to market and ease of deployment represent a clear competitive advantage and that Navegate will serve as a meaningful catalyst for organic growth as we introduce the technology to our current and prospective customers in coming quarters,” said Founder and CEO Bohn Crain, on a Monday conference call.

Radiant ended the quarter with net debt of $2 million. The bulk of its $200 million credit facility remains untapped. It will use cash generated from operations and the credit revolver to fund additional share repurchases and acquisitions, including third-party agent station conversions into company-owned operations.

Shares of RLGT were off 1% in after-hours trading on Monday, after closing the day up 2%.

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