Radiant Logistics Inc (RLGT) Faces Headwinds: A Dive into Q2 Fiscal 2024 Results
Revenue: Decreased to $201.1 million, down 27.7% year-over-year.
Gross Profit: Dropped to $58.8 million, a 16.7% decrease from the prior year.
Net Income: Attributable to RLGT fell to $1.0 million, a 79.2% decline year-over-year.
Adjusted EBITDA: Decreased by 52.5% to $7.7 million.
Stock Buy-Back: Repurchased 532,401 shares at an average cost of $5.79 per share.
Acquisitions: Acquired Daleray Corporation and Select Logistics, Inc. to bolster cruise industry logistics.
Radiant Logistics Inc (RLGT), a third-party logistics company, released its 8-K filing on February 8, 2024, detailing its financial results for the second fiscal quarter ended December 31, 2023. The company, which operates in the United States and Canada, faced significant market headwinds that led to a decrease in both revenue and net income.
Financial Performance and Challenges
RLGT reported a notable decline in revenues, which decreased by 27.7% to $201.1 million compared to the same period last year. Gross profit also saw a reduction, falling by 16.7% to $58.8 million. The company's net income attributable to RLGT decreased significantly by 79.2% to $1.0 million, or $0.02 per basic and fully diluted share. Adjusted EBITDA, a key metric for evaluating a company's operating performance, decreased by 52.5% to $7.7 million.
These declines are indicative of the broader challenges faced by the transportation and logistics industry, including weak freight demand and excess capacity. RLGT's CEO, Bohn Crain, acknowledged these difficulties but expressed optimism that the market is nearing the bottom of this cycle, with expectations of a rebound in the latter half of 2024.
Strategic Acquisitions and Share Buyback
Despite the downturn, RLGT has made strategic moves to position itself for future growth. The company acquired Daleray Corporation and Select Logistics, Inc., both of which are recognized for their expertise in the cruise industry. These acquisitions are expected to enhance RLGT's service offerings in South Florida.
In addition to acquisitions, RLGT has been actively managing its capital structure through a stock buyback program. During the six months ended December 31, 2023, the company repurchased 532,401 shares at an average cost of $5.79 per share, totaling $3.1 million.
Financial Statements Overview
The balance sheet shows that RLGT ended the quarter with $32.9 million in cash and cash equivalents, and the company remains debt-free with nothing drawn on its $200.0 million credit facility. The income statement reflects the aforementioned declines in revenue and net income. The cash flow statement highlights the generation of $12.1 million in cash from operations during the six months ended December 31, 2023.
"Our results for the quarter ended December 31, 2023 continue to reflect the difficult freight markets being experienced by the entire industry as well as our operations," said Bohn Crain, Founder and CEO of Radiant Logistics. "We remain optimistic that we are at or near the bottom of this cycle and would expect markets to begin to find their way to more sustainable and normalized levels towards the back half of calendar 2024."
Analysis and Outlook
RLGT's performance in the second fiscal quarter reflects the broader economic challenges impacting the logistics sector. The company's proactive approach to acquisitions and capital management, however, suggests a strategic positioning for recovery as market conditions improve. Investors and stakeholders will be watching closely to see if RLGT's optimism for a market rebound in the latter part of 2024 materializes and how the company's recent acquisitions will contribute to its growth trajectory.
For a more detailed analysis and ongoing coverage of Radiant Logistics Inc's financial performance, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Radiant Logistics Inc for further details.
This article first appeared on GuruFocus.
