Third-party logistics provider Radiant Logistics beat fiscal fourth-quarter expectations Monday after the market closed. A volatile trade landscape is driving demand higher for its customs brokerage and compliance services. It also flagged further tightening in the domestic truckload and intermodal markets, which will propel financial results over time.
“While these market trends are not fully reflected in our results for the June quarter, we view these developments as constructive for our domestic operations in general and our U.S. Brokerage operations, in particular,” said Bohn Crain, founder and CEO, in a news release. “If these trends continue, we believe they support a more broad-based and durable recovery for the domestic freight market.”
The report sent shares of RLGT 16% higher in early trading on Tuesday versus the S&P 500, which was down 0.2%.
The Renton, Washington-based company reported revenue of $261 million for its fiscal fourth quarter, ended June 30. The result was 19% higher year over year and $30 million ahead of the consensus estimate.
Adjusted earnings per share of 15 cents ($7.4 million) were 4 cents higher y/y and 6 cents ahead of consensus. Disaster relief shipments following typhoons in the Western Pacific drove international airfreight results higher in the period.
Radiant (NYSE: RLGT) reported adjusted earnings before interest, taxes, depreciation and amortization of $10.4 million, which was 31% higher y/y. The adjusted EBITDA margin improved 240 basis points to 15.5%.
The company ended the quarter with no net debt. It amended its $200 million revolving credit facility in August. The deal extended the maturity of the credit line by five years and increased the accordion feature to facilitate acquisitions from $75 million to $100 million.
Radiant recently rolled out a new independent agent program at its over-the-road and intermodal brokerage platform, Radiant Road & Rail. It’s an extension of its agent-based freight forwarding model. It gives freight brokers capacity purchasing power, access to better technology and backend support. The program also offers a pathway for owners to sell their operations to Radiant.
“We’re pleased with the early response to the program and see this as a meaningful new avenue for organic growth as we bring the Radiant model to an entirely new market,” Crain said.
Why it matters? Radiant Logistics is seeing strong international results amid a volatile trade landscape along with a meaningful tightening in both the domestic truckload and intermodal markets. The company’s enhanced debt agreement will allow it to further consolidate the 3PL space through agent acquisitions.
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