This afternoon, Bohn Crain, Radiant Logistics’ Founder and CEO; and Radiant’s Chief Financial Officer, Todd Macomber, will discuss financial results for the company’s third fiscal quarter and 9 months ended March 31, 2022. 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.

Thanks, Vishan. Thank you. Good afternoon, everyone and thank you for joining in on today’s call. We are very pleased to continue our trend and report another quarter of record financial results for the March quarter. It was nothing short of a spectacular quarter, with us reporting new records for virtually every financial metric on which we report: revenues, net revenues, net income, adjusted net income, EBITDA, adjusted EBITDA, EBITDA margin, earnings per share and adjusted earnings per share, all records. Our business remains quite strong across our various service offerings, with a particularly strong showing this quarter in our project charter business in the first full quarterly contribution from our December 2021 acquisition of Navegate. Across the board, in our forwarding operations at both our company-owned and strategic operating partner locations, our Canadian operations, and our U.S. brokerage operations, each and every group is making a meaningful contribution to our collective success. We are particularly proud that during the quarter, the Radiant team had the opportunity to continue to assist in COVID relief efforts, providing mission-critical support to move COVID test kits on behalf of the United States Department of Health and Human Services. The mission, including coordination of cargo at origin, uplift and delivery, involved the chartering of 24 aircraft flying 85.4 million COVID test kits to the interior of the U.S. for final-mile delivery and ultimate distribution. The program details included over 474,000 cartons of test kits on these 24 flights followed by the safe and speedy transfer of the kits to over 230 53-foot trailers for delivery to strategic centers in the U.S., with the ultimate destination into the hands of the American people. In addition, we remain very excited about the opportunities made available to us through our acquisition of Navegate. In addition to solidifying…

Thanks, Bohn, and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the 3 and 9 months ended March 31, 2022. For the 3 months ended March 31, 2022, we reported adjusted net income attributable to Radiant Logistics of $14.339 million on $460.9 million of revenues, or $0.29 per basic and $0.28 per fully diluted share. Please note this quarter included approximately a $2 million gain related to change in fair value of the interest rate swap contracts, and more meaningfully, the quarter was approximately with $62 million of COVID-related charter business. For the 3 months ended March 31, 2021, we reported net income attributable to Radiant Logistics of $4.984 million on $236.5 million of revenues or $0.10 per basic and fully diluted share. This represents an increase of approximately $9.355 million of net income over the comparable prior year period, or 187.7%. For adjusted net income, we reported $16.828 million for the 3 months ended March 31, 2022 compared to adjusted net income of $9.148 million for the 3 months ended March 31, 2021. This represents an increase of approximately $7.680 million or approximately 84%. For adjusted EBITDA, we reported $23.596 million for the 3 months ended March 31, 2022 compared to adjusted EBITDA of $12.885 million for the 3 months ended March 31, 2021. This represents an increase of approximately $10.711 million or approximately 83.1%. I’d also like to call out the increase in adjusted EBITDA margin as a percentage of net revenues, something Bohn and I track regularly, increasing 510 basis points from 22.7% to 27.8%. Moving along to the 9-month results, for the 9 months ended March 31, 2022, we reported net income attributable to Radiant Logistics of $28.366 million on $1.080 billion, representing $0.57 per basic and $0.56 per fully diluted share. Please note, this period included 4 months of our recent acquisition of Navegate, significant charter business captured in the current quarter, slightly offset by $1 million in the cyber event disclosed in December. For the 9 months ended March 31, 2021, we reported net income attributable to Radiant Logistics of $11.884 million on $631.2 million of revenues, or $0.24 per basic and $0.23 per fully diluted share. This represents an increase of approximately $16.482 million for the comparable prior year period, or 138.7%. For adjusted net income, we reported $39.708 million for the 9 months ended March 31, 2022, compared to adjusted net income of $24.308 million for the 9 months ended March 31, 2021. This represents an increase of approximately $15.400 million or approximately 63.4%. For adjusted EBITDA, we reported $55.396 million for the 9 months ended March 31, 2022, compared to adjusted EBITDA of $34.640 million for the 9 months ended March 31, 2021. This represents an increase of approximately $20.756 million or approximately 59.9%. With that, I will turn the call back over to our moderator to facilitate any Q&A from our callers.

[Operator Instructions] I see our first question comes from Mark Argento from Lake Street. Mark, please go ahead.

Hey, Bohn. Hey, Todd. Congrats on enormous quarter. So really, really impressive and I concur with your thinking about not getting credit. If you could just help us parse things a little bit. If you give us – firstly, I know if you could give us the – what the COVID-related project revenue and EBITDA contribution was in the quarter? And then remind us of the size and scope of Navegate as well, how much they contributed in the quarter and then kind of backing into the kind of the organic growth rate of the core platform?

Sure. I will take the first crack at that. The COVID charter business, we don’t take it to EBITDA, but I believe it’s in the press release there, I think it was $62 million and change was the revenue for the quarter, that’s in the press release. Relative to Navegate, that – we did not break that business out separately. So I don’t want to get kind of just scope of the – yes. But in terms of a high level, so Navegate is a Minneapolis-based company that we acquired back in December. That transaction was valued at roughly $35 million purchase price on notionally $6 million of earnings power. We are happy to report they are outperforming or outpacing those historical results and we are really excited to have them as part of the team moving forward. They bring to us a significant competency in ocean freight forwarding and customs brokerage, a presence in Shanghai and some incremental technology that we are excited to bring back to the broader network that will provide kind of enhanced in-transit visibility tools down to the PO level, which will allow shippers to kind of better manage their supply chains down to the SKU level. And with all the disruptions in the supply chain and everything going on in Asia and around the world, customers are increasingly interested in these types of tools and visibility to be more proactive in managing their supply chain.

And when you think about the disruption in the supply chain and kind of the catch-up in the air freighting of components and is there any way to quantify or when you kind of think about the growth kind of – we will call it more steady-state growth and do you think you guys have benefited disproportionately from more air freighting going on given this environment? Maybe try to help us think about a more normalized kind of run-rate for the business, if there is such a thing?

Yes. I don’t know that we – I appreciate the question. I would say it’s been the proverbial rising tide lifts all boats. I mean – and literally and as well as figuratively. In terms of modality, we’ve had significant growth in the ocean product, notwithstanding some of the port congestion and those types of things, while also doing charters and other expedited freight as well. But it’s certainly a fair question, and it gets to this kind of notion of new normal and kind of how do we think about the kind of the ongoing run rate of the business. And we don’t want to go so far out onto the proverbial limb in terms of providing guidance at this point relative to upcoming quarters. But at least it’s my perception that the way that people think about us and our business isn’t consistent with the company that we are today. We’ve grown substantially. And while I think everybody expects there to be some level of softening as we move forward and a lot of these uncertainty, even in kind of a downside scenario, we’re still going to be meaningfully ahead of our historical levels of performance. And I think I want to leave that conversation here for now relative to specific guidance.

Yes. No, that’s fair. Todd, just quickly, can you just remind us on the new – I think you guys put a new debt facility in place, what kind of what you have pulled down on it, what the balance sheet looks like right now?

Yes. So I mean as of the period, I think we’re at 100 and might have to 4Q. We have $40 million on the balance sheet as far as cash. We paid it down a lot. The net debt is $73 million. As of this, we had $113.6 million, which was really the facility and the IPD loans. But to get more specific as far as the facility, as of the balance sheet date, it’s $103.5 million as of – or I’m sorry, as of March. So with the $40 million, and like I said, since then, obviously post balance sheet, we paid down about $40 million.

Got it. And then with the stock in broader markets and you guys aren’t the only stock that’s not really getting a whole lot of love. But have you thought about committing a certain percentage of your free cash flow to the buyback or kind of taking advantage of the situation? I know you alluded to the buyback, but anything more concrete [indiscernible]. So go ahead...

I think kind of our baseline scenario remains intact, Mark, which is people should expect us to effectively take half of our free cash flows and have those earmarked to stock buybacks and the other half of our free cash flows targeted to tuck-in acquisitions. And then opportunistically, we may deviate off of that baseline in pursuit of one or the other. But our intention is to continue to take a balanced approach. We believe we can progress both of those opportunities, with stock buybacks being a meaningful and quite viable place for us to deploy our capital.

And in terms of tuck-in acquisition size, would you consider like a Navegate tuck-in acquisition size now? Or what is tuck-in in your world today, because you’ve grown quite a bit?

Yes. It’s getting to the edge of that. That’s another interesting observation, but I think you’re right. Historically, we would have thought of our tuck-in acquisitions of being plus or minus $2 million of EBITDA. That’s not to say we wouldn’t continue to do those, and it’s not to say that we won’t continue to support our operating partners in their own exit strategy. But we have a lot of dry powder. And so it’s – at the end of the day, it’s probably less about size and where we see good strategic fit and the opportunity to create shareholder value. But certainly, probably – I really haven’t had to think of it in these terms what – the size of a tuck-in acquisition, but it probably – if we’re at a run rate of $70 million of EBITDA, that number probably gets up closer to $5 million to $10 million numbers. Yes. And just to kind of build on that thought a little bit more, part of the notion of tuck-in is having a platform and infrastructure and management team to tuck it in and be a good steward of that organization. And we continue to build out really solid teams here in Renton, in Canada and in Chicago to support our acquisition activities. So tuck-in is not only a function of balance sheet but also a function of the management teams that we continue to build out.

Alright. Again, congrats. Fun to watch you grow the business over the number of years I’ve covered you guys, and keep doing what you’re doing and you’ll get rewarded at some point.

Thank you.

Next on the line, we have Jeff Kauffman from Vertical Research. Jeff, please go ahead.

Thank you very much. Congratulations, guys. A quick question. Now that you have direct Shanghai exposure, can you talk about what’s going on over there, how that may or may not be affecting your business this quarter versus last quarter? And now that you’re doing more ocean than you used to, you have kind of a broader view of what’s happening in global markets. I would just here – be interested in hearing how March and April were comparing to January and February.

So thanks for your question, Jeff. And I’m kind of consistently interrogating my own organization with that very question. And we’re still seeing good volumes. I mean I think it’s fair to say everybody is having to work a lot harder than we might have had to in different times. But freight is still moving. We’re still busier than heck. And while there might be certain little pockets where customers or accounts are might be approaching inventory levels and might be slowing down in their own purchases, at the end of the day, our ability to support our customers and sourcing capacity and moving freight continues. So even though we hear about these lockdowns, which are true, right, freight is still moving. And so we’re working hard to get it done. And I think those opportunities, we don’t see them diminishing in any material way for the foreseeable future.

Okay. Same question for your domestic network. Is it getting easier to find capacity? Are there still challenges getting available capacity of the places you need it?

I think capacity is loosening up a little bit. But in some respects, it’s also shifting, right? So it’s been a little softer off the West Coast, but demand has picked up in other geographies of the country. So I think on an absolute and aggregate basis, we’re seeing – I won’t say – I don’t know if softness is even the right word. I think we’re seeing some – and I won’t even say reversion to norm, but there is less rejections on quotes and all that stuff going on. So it’s getting a little easier to get at the capacity, right? There is certainly a time where you could be on the phone all day trying to secure a single truck for an account, and folks aren’t having to work quite that hard. But I think it still remains. And I guess, here’s, I guess, another opportunity to kind of ring the bell for the non-asset-based 3PL, right? So the – I can’t speak on behalf of how the asset-intensive businesses are doing in this environment. But as a non-asset-based 3PL, we’re still very bullish about the market and the opportunities that it presents.

Thank you very much. That’s my question.

Alright. Thanks, Jeff.

Okay. And our last question comes from Mike Vermut from Newland Capital. Mike, please go ahead.

Hi, guys. How are you doing? Phenomenal quarter. It’s amazing being around this long and seeing what this company can do now. Just following up something on what Jeff’s saying, what are your guys saying about – you have, I guess, 300 million, 400 million people shut in, in China right now, and I know we have offices in Shanghai. But what are they saying or what are they believing will happen once that starts to open up? And I assume we’re going to be flooded with freight when that happens, and how do you look at that for opportunity?

Well, only time will tell, I guess. But the – sure enough, the folks in China are just as effective at working from home as some of us here in the states are, right? So it’s a combination of things. I think where it will be interesting, I guess there is a couple of thematics. One, there is still boats that anchor trying to be ingested in L.A. So I think we’re having a chance to try to kind of work some of that through. But the fact is there is still a backlog. And as things open back up, we would – I’m kind of anticipating a second surge to a certain extent. What I don’t have particularly good visibility into is what’s happening on the manufacturing floor in Asia and what impact these shutterings are having on their ability to – for production and their ability to kind of ramp back up as they are able to come back in to do their work. But I – but I’m anticipating kind of another wave, right, another surge, continued disruptions, continued capacity issues, all those things that make the work we do that much more valuable in supporting our customers.

Excellent. Now getting to – I’ve been with the company, invested in the company for quite a long time. And our stock price, when you look at it now is, I believe, have done – is below where we were 5 or 6 years ago, and we are consistently putting up phenomenal numbers. We’re doing now about 3x the EBITDA that we were when our – 5, 6 years ago when our stock was higher. So there is some massive disconnect. And there becomes a breaking point with management. You guys are – your entire company is doing so well right now. You have such free cash flow, low leverage that you say to yourself, it’s not worth being a public company anymore, right? And if you do the math, even at $10, the payback, if you borrow 90% of that, you could pay off that debt in 7 years, right? So something has to give eventually, right? If we’re saying it was trading at the same spot we were 6 years ago and we’re generating 3 to 4x the EBITDA, when does management start to say, this can’t sustain itself, we have to do something. I understand buying stock, maybe you expedite the buyback. Or is there a point where let’s go and try to do something strategic here because it doesn’t make any sense? There is no other company in our space trading at these valuations or even close on a non-asset basis. So I’m just trying to understand where you guys are thinking, it’s not sustainable to remain at these valuations.

So thanks for your questions. I share your frustration and your observation. We continue to believe that we’re creating shareholder value every day when we get up and come to work, and that kind of bears it our financial results, if not our stock price. There is a number of things that we will continue to do because we think kind of fundamentally, they are sound and help us get where we want to go. Part of the – at its heart or part of the trade-off is ultimately financial flexibility. So if we go and meaningfully lever up our business to do a stock buyback that will negatively impact our financial flexibility to do some other things. A great example is all this charter business that we just had the opportunity to do. Had we done a significant stock buyback in one lump sum, we would have really not been able to take that phone call and said, yes, we’re here to support everything the government was trying to do around COVID relief and all those types of things. So part of this equation is financial flexibility and dry powder to take advantage or support opportunities as they present themselves, whether it’s project work that’s going to, on a short-term basis, consume a lot of working capital, or whether it’s to be there to support our operating partners and their own exit strategies. These are all things that we’ve got to keep on our peripheral vision as we think about capital allocation. So we’re not thinking around taking the company private, which I think is kind of at the – was at the heart of your question. I think we are – believe we’re creating long-term value. I and I think the management team has a long-term view or horizon around what that looks like, and we’re happy to continue to create shareholder value, take a balanced approach in terms of capital allocation. And to the extent this disconnect is going to continue to exist, we will likely do more than less of the stock buyback, while trying to preserve our financial flexibility to also grow the business strategically in terms of acquisition and incremental capabilities and the like.

Excellent. Yes. No, I – look, I was really saying it in management is creating all the value for the company and it’s not being rewarded in the marketplace. So there is – this disconnect is unsustainable at some point in time, right? And that’s all I’m saying is that you are creating the value, it’s just not being recognized. So there are opportunities out there. And accelerating the buyback is one of them if it stays at these levels, for sure, so...

Yes. One of the things that we’ve talked about before is kind of this notion of – that our stock price seems to kind of unlock value in a step function type way, right, as we’re kind of a micro cap and kind of been working our way through institutional discovery and then that whole process. And so ever so often, the cumulative weight of the evidence allows some acknowledgment of all the work we’ve done. And I don’t know how many consecutive quarters we have to put together for that tipping point where we get one of those kind of step function unlocks. But I’m hoping one or more analysts or investors on this call are out there. We will do the work and put out a report that kind of highlights the disparity in kind of implied multiple of our stock relative to effectively the rest of our peer group because while, generally speaking, most of the transports have had a nice run up, we never did, right? So while there may be some perceived downside in some of these other transports that have run up, it’s hard for me to see anything but upside in investing in Radiant Logistics at these prices.

Fully agree. And a great job, guys. Eventually, it will fix itself or you’ll get to buy in more and more stock. So keep it up.

Thanks, Mike.

There are no further questions at this time.

Alright. Thank you, operator. 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, extensive global network of service partners and recent acquisition of Navegate to continue to build on the great platform we’ve created here at Radiant. At the same time, we’ve begun to thoughtfully relever our balance sheet, and through a combination of strategic acquisitions and stock buybacks, we believe we’re creating meaningful intrinsic value for shareholders that has yet to be recognized in our stock price. Through this multi-pronged approach of organic growth, acquisitions and stock buybacks, 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.

Ladies and gentlemen, this does conclude today’s teleconference. You may now disconnect your lines at this time and enjoy the rest of your day.