Greetings, welcome to Radiant Logistics Financial Discussion for Second Fiscal Quarter Ended December 31st, 2024. This afternoon, Bohn Crain, Radiant Logistics, Founder and CEO; and Radiant’s Chief Financial Officer, Todd Macomber, will provide a general business update and discuss financial results for the company's second fiscal quarter and six months end, December 31st, 2024. 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 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 express 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.

Thanks, Paul. Good afternoon, everyone, and thank you for joining in on today's call. With the benefit of our diverse service offering, we continue to deliver solid financial results and generated $12 million in adjusted EBITDA for our second fiscal quarter into December 31st, 2024. These results are generally ahead of results from the comparable prior year period as well as our most recent previous quarter ended September 30, 2024. We continue to take great pride in our work to support humanitarian and relief-related projects around the globe. Our results this quarter reflect our support of a number of such projects, including chartering 49 flights to bring approximately 8 million units of IV fluid to the U.S. as a result of the national shortages resulting from Hurricane Milton. Notwithstanding these strong results for the quarter, we do expect our future near-term results to continue to be challenged by market headwinds. Near-term results could also be further frustrated by the recently introduced tariffs with China, Mexico, and Canada as we head into our slowest seasonal quarter ended March 31. As previously discussed, we believe we are well-positioned with a durable business model, diverse service offering, and strong balance sheet to navigate through these slower period markets as we find our way back to more normalized market conditions. We continue to enjoy a strong balance sheet with approximately $20 million of cash on hand, no meaningful debt, and an untapped $200 million credit facility. At the same time, we remain focused on delivering profitable growth through a combination of organic and acquisition initiatives and thoughtfully re-levering our balance sheet through a combination of strategic operating partner conversions, synergistic tuck-in acquisitions, and stock buybacks. Through this approach, we believe over time, we will continue to deliver meaningful value for our shareholders, operating partners, and the end customers that we serve. We made good progress in this regard over this last quarter with the acquisition of Texas-based Foundation Logistics, the conversion of our Michigan-based strategic operating partner, Focus Logistics, which is combining with our existing Radiant operations in Detroit, and the acquisition of TCB Transportation in St. Louis, Missouri. We believe these three transactions are representative of our broader pipeline of opportunities, which includes both greenfield acquisitions, those companies not currently part of our network, as well as acquisition opportunities inherent in our agent-based network where we can support our current operating partners in their exit strategies. We look forward to providing further updates as we continue to progress along these lines. With that said, I'll now turn it over to Todd Macomber, our Chief Financial Officer, 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 and six months ended December 31st, 2024. For the three months ended December 31st, 2024, we reported net income attributable to Radiant Logistics of $6.467 million on $264.5 million of revenues, or $0.14 per basic and $0.13 per fully diluted share. For the three months ended December 31st, 2023, we reported net income attributable to Radiant Logistics of $985,000 on $201.1 million of revenues, or $0.02 per basic and fully diluted share. This represents an increase of approximately $5.482 million net income over the comparable prior year period, or 556.5%. For adjusted net income, we reported $10.695 million for the three months ended December 31st, 2024, compared to adjusted net income of $5.496 million for the three months ended December 31st, 2023. This represents an increase of approximately $5.199 million, or approximately 94.6%. For adjusted EBITDA, we reported $12.016 million for the three months ended December 31st, 2024, compared to adjusted EBITDA of $7.708 million for the three months ended December 31st, 2023. This represents an increase of approximately $4.308 million or approximately 55.9%. For the six months ended December 31st, 2024, we reported net income attributable to Radiant Logistics of $9.843 million on $468.1 million of revenues or $0.21 per basic and $0.20 for fully diluted share. For the six months ended December 31st, 2023, we reported net income attributable to Radiant Logistics of $3.607 million on $411.9 million of revenues, or $0.08 per basic and $0.07 per fully diluted share. This represents an increase of approximately $6.236 million over the comparable prior year period, or 172.9%. For adjusted net income, we reported $18.578 million for the six months ended December 31st, 2024 compared to adjusted net income of $12.046 million for the six months ended December 31st, 2023. This represents an increase of approximately $6.532 million or approximately 54.2%. For adjusted EBITDA, we reported $21.468 million for the six months ended December 31st, 2024, compared to adjusted EBITDA of $16.874 million for the six months ended December 31st, 2023. This represents an increase of approximately $4.594 million or approximately 27.2%. With that, I will turn the call over to our moderator to facilitate any Q&A from our callers.

The first question today is coming from Elliot Alper from TD Cowen.

This is Elliot Alper for Jason Seidl. Maybe just starting off, can you give more detail on maybe the outperformance in the December quarter? Was Milton the primary driver? Maybe anything else you saw unusual about peak season? Or curious if you saw any pull forward in the market?

I will take a crack at that. I think the conversation had to start with the kind of the diversity of our service offering and the fact that we did have an opportunity to support a number of initiatives, you know, in and around Hurricane Milton that was the real driver in the outperformance for the quarter, and we're appreciative for that opportunity. We tried to do our best to temper the press release itself because it's still tough going out there and kind of this project activity helping us through the trough, but it's still slow going. I do think as you were alluding to, there was some pull forward this quarter, kind of in anticipation of tariffs. So, we got a little of what I would call a modest bump there. But more broadly, it's pretty tough out there for us and our competitors, and we were just fortunate enough to have some meaningful impact in terms of human impact and ultimately meaningful in terms of financial performance for us in and around supporting this IV fluid project.

And then I wanted to ask about the acquisition of TCB made in December. Can you talk about the strategic rationale of acquiring an intermodal marketing company and maybe a ballpark of how we should think about the size of that business or maybe the margins versus your existing business?

Yeah, sure. So, this is really, that's a great question. Thank you for that. Just to provide some foundational comments to my response. Back in 2015, we acquired another public company that was called Wills Group, which we rebranded as Radiant Global Logistics Canada. Wills itself had done some acquisitions and had acquired a company from ABF back in the day that many people will know as Clipper Express. We ultimately rebranded Clipper Express as Radiant Road and Rail. So, and we often refer to that as a U.S.-based brokerage platform. And for us, that means both intermodal and truck brokerage. Anecdotally, Radiant Road and Rail, formerly known as Clipper Express, is quite literally the oldest subsidiary in our consolidated group. It was incorporated in 1938, one of the original intermodal marketing companies. But in any event, their core business was in the 53-foot space. TCB brought an incremental competency to our intermodal offering around 40-foot. And again, just for context, we've been working hard to build out a true bimodal service offering from our road and rail platform in Chicago to have a robust over-the-road and intermodal service offering. So, we see a lot of potential revenue synergies through the onboarding of TCB. They are a small but mighty player in the 40-foot space. We are really excited to have them and the team as part of our organization moving forward. I think we've kind of stayed away from a lot of details around the precision of the purchase price and numbers. But dimensionally, we anticipate about $2 million to $3 million of incremental EBITDA contribution from that business.

And then maybe this last one. And there's been just a lot of news on tariffs changing by the day. Can you talk about your customs brokerage operation, kind of what you're seeing now or how shippers are reacting? Like, how big is that business? Or do you charge customers on how much they're spending with their sales contract contact? Any color there would be helpful. Thank you.

Sure. There again, I'll ground the conversation in our prior acquisition activities. We had historically been what I would characterize as dabbling in the customs brokerage space. But a few years back, we acquired a company called Navigate, which was principally an NVOCC and customs brokerage platform based in Minneapolis. We've since rebranded that business as Radiant World Trade Services. So, we have a relatively small but extraordinarily strong competency in the customs brokerage space, both transactionally and from an advisory standpoint, trying to help our customers understand and respond to the shifting sands of tariffs and the quickly evolving landscape in which we're all operating. I would be remiss not to mention the technology that we acquired in connection with our acquisition of Navigate, because we are very excited about what I'll call the bundled solution offering that we now enjoy, to provide a robust collaboration platform for PO management, vendor management, customs brokerage, in a holistic way that historically we and most people at our relative size do not operate in that dimension. We are very active; we are growing our customs brokerage and continue to cross-sell our customs brokerage capabilities into our other international clients. I am quite hopeful that over time we will have more to tell, more of a story to tell around our technology platform which we are kind of repositioning our branding as Navigate, inclusive of custom brokerage that'll set inside that platform. So, that was a really broad answer to your customs brokerage question, but we're a meaningful player, and we're definitely punching above our weight these days in and around that offering. It's probably one of the most exciting threads and opportunities as we move forward and a catalyst for growth for us.

The next question is coming from Mark Argento from Lake Street.

Just a quick one, if you could just help us think through a little bit. Guys have been pretty active on the M&A side, which is great, and anticipating that we'll continue just given the environment, but could you help maybe just size up a little bit and you did that with the TCB acquisition, but just help us think about either gross or net revenue or adjusted and or adjusted EBITDA contributions from some of these acquisitions. And I know it's a little bit tough to probably pin it all down, but is it, in this quarter $12 million, was that same store EBITDA contribution, did you benefit a couple million bucks from these acquisitions? Is it more, is it less, just trying to get a feel for organic versus acquisition type contribution?

Yes, sure. Again, we got to, as you described, we have to paint with a pretty broad brush here for a number of contributing factors. So, I would start with, when we acquire an agency station or convert an agency station, we really don't see any change at the revenue or gross margin line item because that business is already flowing through our financials. We end up reducing commission expense paid out and kind of that difference, if you will, is what will flow through in terms of incremental EBITDA. So, that's one of the areas where we talk about margin expansion. Margin expansion defined as EBITDA divided by gross margin and kind of one of the byproducts of those conversion efforts of agency stations. We've done a number of those recently and we would anticipate, in fact, for those following our story for a long time, the theme of the gray tail and kind of the aging of our strategic operating partners. We think that theme will continue and just continue to accelerate as we move forward. So, there's not going to be a lot of top-line impact of that particular piece. TCB is a little different because that's a greenfield acquisition, but we only had one month of those activities in our December quarter. So, we really haven't seen the flow-through effects of TCB in our financials yet, as it relates to the December quarter. And without getting into too much detail, I would say on a same-store basis, we were relatively flat. Candidly, best case flat. And some of this project opportunity really helped lift the numbers. I'll say it again for emphasis. That's why we were cautioning, as good as this is and we're really grateful to have it, we don't want people to take this quarterly result and multiply it by four and think that's our run rate, because it's going to be tougher sledding ahead in particular this March quarter seasonality and tariffs and everything else going on. So, hopefully, that's at least somewhat responsive to your question, Mark.

It's a challenging question to answer with a lot of detail, but your insights were very helpful. Reflecting on your previous experiences with tariffs, I understand this is a unique and somewhat unprecedented situation. It's difficult to make precise predictions, but as you noted, there was some anticipation of this adjusting the market. Typically, after an initial surge, there's a normalization phase. How do you approach this scenario, or how do you try to navigate it?

It's a tough one. I will give you kind of my perspective, but I think it's worth what you pay for it. At the end of the day, I think when tariffs get put into place, there will be some short-term disruptions as people try to respond and kind of reconfigure or adjust individually within our own portfolio of customers. There could conceivably be some winners and losers within our own portfolio of customers and kind of what happens to the underlying products that they're making and how they are impacted to the good or the bad relative to the tariffs. But at the end of the day, we simply don't, as a country, have the manufacturing capability to support the consumption requirements of the U.S. consumer. So even though prices may go up, someone is still going to have to pay for them just by the laws of simple supply and demand. Whether it continues to come from China or gets repositioned, it's coming from Vietnam and/or the U.S. and Canada, those trade flows still have to happen albeit at likely higher prices for consumers, but that's an entirely different conversation and kind of beyond the scope of this call. So, I can't tell you what will or won't happen and what's posturing or is actually going to come to pass. But we and the rest of the industry will digest it and continue to move forward.

Just one last one, I think I asked a question pretty much every time, so I'm going to do it again. But in terms of the environment on the M&A side, it seems like things remain robust. Is this kind of environment of uncertainty, is that what compels some of these conversations to turn into transactions? Or what do you foresee there?

Well, not necessarily that. I think for us, there are a number of factors at play. We have our aging agent stations raising their hands because they are aging out, and we need to think about their own succession planning and exit strategies. We have been playing that as a long game for a very long time, and that is one thread of it. There's also a good number of folks in our space who were ultimately leveraged up at peak earnings. As the markets soften, they find their balance sheets in disarray. There's a lot of what I would characterize as normal participants in the M&A space sidelined while they try to get their own balance sheets right-sized so they can become actionable again. From my standpoint, we are still executing the same plan with the same discipline we always have been. The market is coming back to us because of some of these dynamics. The transactional space is hard to conduct on peak earnings. We are now in trough earnings and working through some of those dynamics. We use earn-out structures in our deals and really try to structure to mitigate risk to ensure we don’t overpay for the businesses we acquire. We still have a lot of dry powder and expect to continue to be very disciplined. We are executing the same playbook we were a decade ago, Mark.

Yes. No, it’s true. One final. Anything on the buyback in the quarter?

No.

No. Not this quarter. We're too busy doing deals.

The next question is coming from Kevin Gainey from Thompson Davis. Kevin, your line is live.

Hi, Bohn, Todd, good quarter, guys. Maybe if you could kind of talk about how you're feeling about market conditions currently? I know you've reiterated that they're still slow, but maybe compare it to how you guys felt this time last year.

I would say I'm more optimistic today. Business remains soft, and I think it will continue to be soft as we approach 2025, not just for us but for our entire industry. The near term will be challenging. However, I’ve never felt more positive about our position in the market; we are proactive and have financial flexibility. We have some exciting technology initiatives that we believe will set us apart. Still, there will be challenges as we approach 2025. If tariffs are implemented, they could create additional short-term disruptions and confusion in the market. Despite all of this, to answer your core question, I feel more positive about Radiant's prospects and our position in the cycle.

That's good to hear. Can we discuss the competitive landscape and how you've observed your competitors? Compared to the last cycle, is there more risk maturity among some competitors? Is everyone maintaining pricing despite the various factors they might consider?

Yeah, I'm not sure. I mean, I think it certainly remains a very, very tough market out there. The shippers have been more aggressive in their pricing expectations. But I don't think we have, and again, not just us, but I think as an industry, we've been kind of bouncing along the bottom here for more than a couple of quarters. I see significantly more upside than downside in terms of where we go from here. We still need more capacity to come out of the marketplace. There are quite a few asset-based transports struggling, and we need that to resolve to get better alignment between supply and demand and transportation capacity. I think we're slowly getting there, but we still have a little way to go.

All right. And maybe one more, just on kind of the near-term outlook for Q1. If you could kind of talk about what you guys maybe saw in January or if there's anything that you may think has happened so far and what you think you could do for Q1.

I mean it's seasonally our slowest quarter, and I think that we're starting to see a little uptick, but nothing. It's going to play out, we believe, similar to last year. Like Bohn's saying, looking at the numbers we posted for the month, we're seeing some strength in some areas. Ocean is one, for instance. But by and large, it's going to be a soft quarter. I think when we get to Q4, that’s when hopefully we will see an uptick. The tariffs are really anybody's guess, right? That's the wildcard that I don't think we really know at this point, but that's what we're seeing. It's going to be like Bohn's saying; we have some headwinds compared to the sequentially.

Yes. But I would look to the year-ago March quarter as more indicative of where we're likely to land.

The next question is from Jeff Kauffman from Vertical Research Partners.

First of all, congratulations. I apologize for joining a bit late, but did you discuss currency and how it might be affecting your market? I know you have a significant operation in Canada. How is this impacting comparisons between the first quarter, the third quarter, and the fourth quarter? Many companies have indicated that currency is having a bigger effect than anticipated.

Yes, it did have some impact, but after running the numbers, I found that it wasn't significant when we converted it to U.S. dollars and considered the EBITDA. Specifically, for last quarter, the figures we reported didn’t show anything substantial. I would say it had a minor effect.

And that does conclude today's Q&A session. I would now like to hand the call back to Bohn Crain for closing remarks.

All right. Let me close by saying that we remain optimistic about our prospects and opportunities to continue to leverage our best-in-class technology, robust North American footprint and extensive global network of service partners to continue to build on the great platform we've created here at Radiant. At the same time, we intend to thoughtfully relever our balance sheet through a combination of agent station conversions, synergistic tuck-in acquisitions, and stock buybacks. Through our multi-pronged approach, we believe we will continue to create meaningful value for our shareholders, operating partners, and the end customers that we serve. Thanks for listening and your support of Radiant Logistics.

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.