Radiant(US:RLGT)2025-09-15 21:30Financial Data and Key Metrics Changes - For the fiscal year ended June 30, 2025, the company reported adjusted EBITDA of $38.8 million, an increase of $7.6 million or 24.4% compared to the prior year, primarily driven by acquisition efforts [3][10] - Net income for the quarter ended June 30, 2025, was $4.9 million on revenues of $220.6 million, representing a slight increase of 2.6% in net income compared to the same quarter in the previous year [8][9] - Adjusted net income for the fiscal year was $30.9 million, up 36.6% from $22.6 million in the prior year [10] Business Line Data and Key Metrics Changes - The company completed three Greenfield acquisitions and three strategic operating partner conversions in fiscal 2025, contributing significantly to the adjusted EBITDA growth [5][10] - Acquisitions generated $6 million in adjusted EBITDA for the year, highlighting the impact of strategic acquisitions on financial performance [3] Market Data and Key Metrics Changes - The company noted ongoing volatility in trade and tariffs affecting business operations, particularly in relation to U.S.-Mexico trade dynamics [4][12] - There is a continued shift away from China to Southeast Asia and Mexico, which the company expects to benefit from in the long term [12][33] Company Strategy and Development Direction - The company aims to deliver profitable growth through a combination of organic and acquisition initiatives while maintaining a strong balance sheet [5][10] - The recent acquisition of WePort in Mexico is seen as a strategic move to enhance the company's North American footprint and support existing customers [6][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities despite near-term volatility due to trade negotiations [4][64] - The company is focused on leveraging technology and expanding its service offerings to enhance customer relationships and drive growth [58][64] Other Important Information - The company maintains a strong balance sheet with approximately $23 million in cash and only $20 million drawn from a $200 million credit facility [5] - Management indicated that the depreciation and amortization expense has decreased due to the end of amortization related to a significant past acquisition [21][39] Q&A Session Summary Question: Impact of changing trade policy on business, especially regarding Mexico - Management noted that trade policy remains fluid, with customers navigating tariffs and supply chain adjustments, and emphasized the importance of supporting customers during this period [12][13] Question: Adjusted EBITDA performance and margin concerns - Management indicated that the lower adjusted EBITDA was due to less pull-forward activity in the current quarter compared to previous periods [16][17] Question: Capacity limitations for future acquisitions - Management stated that there are no true constraints on acquisition candidates, but integration capacity is a consideration [27][29] Question: Expectations for the upcoming peak season - Management anticipates a muted peak season due to ongoing trade uncertainties but expects continued growth in sourcing from Southeast Asia and Mexico [31][32] Question: Target leverage ratio for the balance sheet - Management indicated a normalized target leverage of approximately 2.5 times, with flexibility for temporary increases for the right transactions [37][38] Question: Overview of customer feedback and future business outlook - Management highlighted the importance of cross-selling opportunities and the positive feedback received from customers regarding new technology offerings [58][61]