Thank you for joining us. This afternoon, Bohn Crain, Radiant Logistics Founder and CEO; and Radiant's Chief Financial Officer, Todd Macomber, will discuss financial results of the Company's first fiscal quarter ended September 30, 2019. Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes. This conference call may include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Company has based these forward-looking statements on its current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Company that may cause the Company's actual results or achievements to be materially different from the results or achievements expressed or implied by such forward-looking statements. While it is impossible to identify all the factors that may cause the Company's actual results or achievements to differ materially from those set forth in our forward-looking statements. Such factors include those that have in the past and may in the future be identified in the Company's SEC filings and other public announcements, which are available on the Radiant website at www.radiantdelivers.com. In addition, past results are not necessarily an indication of future performance. Now I'd like to pass the call over to Radiant's Founder and CEO, Bohn Crain.

Thank you. Good afternoon, everyone and thank you for joining in on today's call. We are very pleased to report another quarter of solid financial results for the first quarter ended September 30, 2019. While our revenues of $200.5 million were down $18.4 million over the comparable prior year period, we were able to deliver net revenues of $55.5 million, up $0.6 million or 1.1%. A number of factors contributed to our reduction in revenues, including; one, our decision to exit certain low margin businesses earlier in the year; two, non-recurring disaster relief project work reported in the year ago period; and three, general market softness associated with slower global trade and margin pressures on our brokerage operations associated with excess truck capacity that exists in the marketplace. For our first fiscal quarter ended September 30, in the U.S., we reported revenues of $175.9 million, down $15.3 million or 8%, and net revenues of $48.2 million, up $1.1 million or 2.3% over the comparable prior year period. U.S. transportation net revenues of $46.7 million were up $0.3 million or 0.6% from the comparable prior year period. U.S. value-added services net revenues of $1.5 million were up $0.8 million or 114.3%. In Canada, we reported revenues of $24.8 million, down $2.9 million or 10.5%, and net revenues of $7.3 million, down $0.4 million or 5.2% over the comparable prior year period. Canada's transportation net revenues of $3.9 million were down $1.1 million or 22% from the comparable prior year period. Canada's value-added services net revenues of $3.4 million were up $0.7 million or 25.9%. We are also pleased with how our non-asset-based model continues to perform and what is generally recognized as a softer freight environment. Although, we saw a reduction in revenues during the quarter compared to the comparable prior year period, the economic impact to the company was generally offset by improving net revenue margins, up 262 basis points, and a reduction of $0.6 million in operating partner commissions, which resulted in net income attributable to common stockholders of $3.2 million, up $0.6 million or 23.1%, adjusted net income attributable to common shareholders of $6.5 million, up $1.1 million or 20.4%, and adjusted EBITDA of $9.7 million, up $0.9 million or 10.2% over the comparable prior year period. In addition, we also continued to see improvement in our adjusted EBITDA margins, which increased 137 basis points to 17.4% from 16.1% for the comparable prior year period. While we are pleased with our results for this most recent quarter, the outlook for the upcoming quarter looks relatively flat on a sequential basis as we are not seeing the traditional peak season trade flows that we would generally expect heading into the holidays. As an industry, we continue to work through the market uncertainties associated with global trade, tariffs and the prospect of impeachment along with digesting excess truck capacity and inventory build-ups that are part of the current landscape. In any event, we believe our success over this past year in delivering profitability, continuing to invest in our scalable back-office infrastructure and deleveraging our balance sheet leaves us very well positioned to take advantage of incremental organic and acquisition growth opportunities as they present themselves. With that, I will now turn it over to Todd Macomber, our CFO to walk us through our detailed financial results, and then we'll open it up for some Q&A.

Thanks, Bohn and good afternoon, everyone. Today, we will be discussing our financial results including adjusted net income and adjusted EBITDA for the three months ended September 30, 2019. For the three months ended September 30, 2019, we reported net income attributable to common stockholders of $3,235,000 on $200.5 million of revenues, or $0.07 per basic and $0.06 per fully diluted share. For the three months ended September 30, 2018, we reported net income attributable to common stockholders of $2,572,000 on $218.9 million of revenues, or $0.05 per basic and fully diluted share. This represents an increase of approximately $663,000 over the comparable prior year period or 25.8%. For the three months ended September 30, we reported adjusted net income attributable to common stockholders of $6,484,000 or $0.13 per basic and fully diluted share. For the three months ended September 30, 2018, we reported adjusted net income attributable to common stockholders of $5,376,000 or $0.11 per basic and fully diluted share. This represents an increase of approximately $1,108,000 or approximately 20.6%. We reported adjusted EBITDA of $9,678,000 for the three months ended September 30, 2019 compared to adjusted EBITDA of $8,813,000 for the three months ended September 30, 2018. This represents an increase of approximately $865,000 or approximately 9.8%. With that, I will turn the call back over to our moderator to facilitate any Q&A from our callers.

Thank you. Ladies and gentlemen, the floor is now open for your questions. We'll go first to Jason Seidl of Cowen and Company.

Thank you. This is Adam on for Jason. First question, I wanted to ask a little bit about peak season thus far, specifically with regards to obviously the ongoing trade and tariff issues, how has peak season looked? Has it kind of looked more like 2018 or 2017 or what are the dynamics you guys are seeing so far?

I think generally speaking, people are calling it the peak season rather than the peak season. So we're just not – and it's not unique to us and kind of my industry peers anyone I've talked to, we're just not seeing the volumes, I guess it's not a surprise given some of the uncertainties in the marketplace and I guess part of that broader conversation is, I think the recognition of people trying to pull forward inventories in advance of the tariffs and I know at least for us on the West Coast, in particular our warehouses are, have been full from inventories that were kind of pulled forward in that process. So we've got to work through, we and our customers that we serve, we've got to kind of work through some of those dynamics. So for us at this point, as we kind of commented in our prepared remarks, our comparable quarter ended December isn't going to look like last year's peak. I think it's going to look more comparable to the quarter we just reported. So still plus or minus $10 million and EBITDA for the quarter is something that I think we're certainly pleased about on a relative basis given the uncertainty in the marketplace and what's going on. So I hope that’s my response to your question.

Yes, definitely. Very helpful. Just a second one for me. What are you guys hearing from your customers regarding potential or possible resolutions to the ongoing trade war with China? Do customers seem hopeful that a resolution is near or that one will be reached at all or what are you hearing from them?

I wouldn't want to get too far out over my skis on that one. I think we'd all like to be cautiously optimistic I know, I myself am a little more skeptical on a near-term resolution. But again, I'm not the geopolitician. I would just have to kind of come back to the viewpoint that we are and as good of our relative position to deal within the uncertainties as anyone that I'm aware of, as I just think about being a non-asset based business model, having very, very low leverage on our balance sheet that we're in a position to be opportunistic and respond to opportunities as they present themselves. And if things continue as they are, we're still doing extraordinarily well. And if there are some things – things went sideways, we're in a great position to weather whatever storm would be on the horizon. So we can't predict the future only know that we're in a reasonably good position to deal with whatever might come our way.

Great. Thank you for that color. And then just a final one for me and I'll jump back into the queue. Maybe just a quick update on M&A, what are you guys seeing in terms of valuations? How is the pipeline looking? Thank you.

Yes, sure. So we continue to look for transactions that make sense as I've alluded to, we've got low leverage and for the right opportunities where we're certainly looking to do deals, if we can find the right deals to do kind of categorically those land in a few different buckets. For a long time talked about conversions of existing agent stations that are participating in our network. So as those opportunities would present themselves, we would certainly look forward and support our partners in doing those types of transactions. And then we can look outside of the network, either on tuck-in type acquisitions or ultimately even larger transactions – part of the dynamic is the larger transactions. The market clearing multiples may well prove to be higher than where our own kind of implied multiple would be trading that create some of its own challenges. So at the end of the day, if we do a larger transaction for the absolute right deal, I think we would. At the same time as I kind of look on the landscape, I don't know of a better value than our Radiant Logistics stock. And I don't know any other $40 million EBITDA businesses out there that we can buy with zero integration risk at a multiple of 6x or 7x. So that will remain a viable alternative as we think about our allocation of capital here going forward. But back specifically to M&A, we are actively looking and would expect the transaction is generally to be the smaller tuck-ins in nature with the asterisk that for the right opportunity we would certainly look at a larger transaction.

Got it. Thank you guys for the time.

Thank you.

We'll go next to Mark Argento of Lake Street Capital.

Hey Bohn, hey Todd. Just a couple of quick ones here. Just any update in terms of technology integration, I know in last quarter I think you said, you'd been running your SAP in 25 locations. Just wanted to seek and where you guys are at with the SAP rollout?

Yes. Thanks Mark. That continues to progress. We now have activated the international functionality and have begun to pilot the international capabilities in a handful of locations. As that proves out, that will round out the solution and we will be able to move more aggressively to deploy across the broader network. Peak season as it is folks are busy. And I would expect to see a more robust kind of rollout across the network in various brands in calendar. I guess what would be calendar 2020, as we get on the backside of piloting the international program. But long story short is we continue to make good progress, continue to take user feedback, and make modest tweaks to enhance the user experience. So I think we're approaching 100,000 transactions now having occurred within TM across the networks. So it's fully functional, from the order to cash process, operational lifecycle of the shipment. We've captured within the system and we'll continue to progress that moving forward, but it's in good shape and on track.

And then just pivoting on the value-added services, you said you continue to grow that still off of a relatively small base, but any thoughts on continuing to grow that business with go-to-market strategy? And then do you guys typically see an uptick around the holidays you guys providing more kind of holiday centric e-commerce type value-added services?

So yes and yes. So yes, it remains an area of success and interest for us. Again, I would like to – just kind of start this conversation in the context of Canada and the success that they are having in bundling value added contract logistics services with their core transportation service offering. We're trying to bring that back on the U.S. side of the border. We're also starting to get a little bit of traction with some cross-sell opportunities as between existing Canadian customers and being able to broaden the solution to include various geographies in the U.S. for some of our existing Canadian customers. So that's exciting and we'll continue to expect value-added services to continue to be a thematic growth potentially even M&A opportunities as we move forward. That can take the form of contract logistics. It can take the form of customs brokerage services or just two areas that come to mind immediately where as you mentioned, although on a small base, they continue to grow nicely and enhance the user experience and the overall value proposition.

Last one for me, but can you just remind us with the share buyback in place, what kind of availability you saw built on that? Thanks.

I believe we were authorized up to 5 million shares is how it was structured, and we have not tapped into that yet. So we have on paper of 5 million shares authorized that we could currently action on. That current program expires under its own terms December 31. So as we move forward here will be evaluating whether or not we would refresh that I would expect, we would those decisions haven't been finalized yet. When and if we do renew it, we would issue a separate press release and 8-K around that at that time.

Thanks, Bohn.

All right. Thank you.

We'll move to Jeff Kauffman of Loop Capital Markets.

Thank you very much. Hi, guys. How are you?

Good, Jeff.

Good. I wanted to talk a little bit about the war chest. For acquisitions, I noticed that you adopted the FAVs for leases. So it optically changes the balance sheet a little bit. Can you talk about where – how much dry powder you have for the right opportunities and are there any credit metrics or anything like that that may limit you from using the full amount of that?

Okay. Thanks, Jeff. So, good questions, I guess as a reminder, we have a $75 million ABL credit facility in place. I think we have roughly $15 million drawn on that $75 million facility. So that would at least begin to frame out kind of where it sets in terms of gross availability currently under the facility, it's like right at $64 million of gross availability. As we did acquisitions, we would get the benefit of adding in the incremental AR of the customers that we would acquire. So, at least one way that I like to think about it, because I think it is an aspect of our story and kind of balance sheet where with all the people may not necessarily appreciates. And so let's just to kind of I guess express it in terms of capacity. So – and just playing with some math for a second. So let's assume that we went out and did acquired $20 million of EBITDA in the aggregate over a series of transactions that would be – and used our traditional earn out mechanism. So $20 million at a multiple of $5 million would be $100 million of purchasing power, half in earn outs, half in cash, so we would need $50 million of effectively cash at closing to acquire that portfolio of acquisitions. And I think that the ultimate takeaway is within our existing capital structure, we could do that. So we could go from $40 million of EBITDA to $60 million of EBITDA serially acquiring smaller acquisitions with virtually no dilution to our common shareholders.

Okay. That's great. Can you give us an update of the IT investment kind of where are you along that path? What's up and running? What still needs to be invested in?

Sure. So I think – well, that's a big question, right. I'm just going to kind of jump into the – I'll just jump into the middle of it and then you can redirect me as appropriate. So I guess just a level set, we are in SAP shop. We've been on SAP from an accounting standpoint, from the beginning of the time, when we acquired the first platform company Airgroup back in 2006. They were on SAP. So we've always been an SAP shop. We've been transitioning away from a third-party TMS called CargoWise to SAP. We took a modular approach to that deployment, first deploying SAP TM's domestic product, which we've done. We are in the middle of piloting the international functionality, which all is going well on that front. In the meantime, we've deployed our production environment into the AWS cloud environment. So as we think about scalability of our infrastructure. We're in really, really good shape. In terms of financial spend, we're probably would spend call it $3 million to $5 million a year. If we were trying to – you didn't ask me the question precisely, but I think indirectly is you're thinking – as we're all kind of collectively thinking about cash from operations and free cash flow and kind of what portion of our cash flows we are earmarking or anticipate spending in the ongoing care and feeding of our technology platform $3 million to $5 million is kind of where I would expect that to land at this point. And we have a number of really interesting initiatives under way to kind of leverage the platform that we would have in place. And when we talk about that in terms of a number of different portal strategies a customer portal, a carrier portal and operating partner portal, all of those things are in progress. So and kind of a companion idea to our technology investment is – in our SAP platform is, we will be one of the first third-party logistics companies in North America to have deployed SAP-TM, and there is a big universe of shippers of manufacturers of hard freight that operate on SAP. And we believe that's going to put us in a unique position to call upon those customers and really bring to them a new value proposition that people historically have been able to, which is the ability to kind of, engage with them on an SAP to SAP platform. And not only help to move their freight, but also drive productivity improvements back into their own back offices because of the fact that we like they are operating in an SAP environment.

That was a great answer, Bohn. Thank you.

All right. Thank you.

We'll move to David Campbell of Thompson, Davis & Company.

Thanks for taking my question. Bohn and Todd, what do you think about the sustaining adjusted gross profit margins, which have been roughly 28% in the last two quarters? Do you think that sustainable in the current quarter, or could it increase as the business slows down?

David, I guess, my reaction to that is I think it is sustainable, so long as international trade volumes remain weak, as those volumes recover because our international traffic moves naturally at a lower margin, some of our domestic expedited. So I think kind of in this current environment, I think the margins will stay higher though actually go down as things improve, which is a little counterintuitive, which is why we like to think about growing our gross margin dollars and getting as many of those gross margin dollars to the bottom line as we can as opposed to necessarily thinking about gross margin percentages on an absolute basis without getting into a deeper conversation around mix between domestic and international and charters and truck brokerage and intermodal and so on.

So the international is a lower margin business, so that is under more pressure than the domestic – your domestic businesses. So that should help sustain a gross profit margin?

Yes. I believe that's what I had said or at least intended to say.

Yes, right. So the international is of course going to pick up if there is some Chinese deals if there's a deal with China, but that going to pick up anytime soon. So maybe the first quarter next year would be the first indication of that. But you're doing really well in a tough situation and the ability to hold the gross margins, profit margin – gross profit margin is very, very good. Thank you very much for your answer.

Thank you.

And gentlemen, at this time, I have no other questions holding. I'll turn the conference back for any additional or closing comments.

Thank you. Let me close by saying that we remain very bullish on the growth platform that we've created at Radiant and the scalability of our non-asset-based business model. Our now more than 12-year first to market advantage in executing our multi-brand strategy and consolidating agent base reporting networks, ongoing investment in technology and low leverage on our balance sheet puts us in a unique position to support further consolidation. We believe this represents our longer-term and almost perpetual opportunity and we continue to invest in technology and our people with an eye toward building out a world-class scalable back office infrastructure to support a much larger enterprise going forward. We are patiently persistent in the pursuit of this long-term vision, which we believe over time, we will deliver meaningful value for our shareholders, our operating partners and the end customers that we serve. Thanks for listening and your support of Radiant Logistics.

Ladies and gentlemen, that will conclude today's conference. We thank you for your participation, and you may disconnect at this time and have a great day.