Radiant(US:RLGT)2025-09-15 21:32Financial Data and Key Metrics Changes - For the fiscal year ended June 30, 2025, the company generated $38.8 million in adjusted EBITDA, an increase of $7.6 million or 24.4% compared to the prior year, primarily driven by acquisition efforts [3][10] - The 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% from the previous year [8][9] - Adjusted net income for the same quarter was $5.5 million, down 21.8% from $7.0 million in the prior year [9][10] - For the 12 months ended June 30, 2025, net income was $17.3 million on revenues of $902.7 million, a significant increase of 125% compared to the previous 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 to the overall growth in adjusted EBITDA [6][7] - The acquisition of WePort in Mexico is expected to enhance the company's capabilities and support its North American footprint [7] Market Data and Key Metrics Changes - The company anticipates continued volatility in the near term due to ongoing U.S. trade negotiations and tariffs, but expects a surge in global trade once disputes are resolved [4][5] - There is a noted shift in sourcing from China to Southeast Asia and Mexico, which the company believes will benefit from the changing trade dynamics [13] 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][6] - The focus is on leveraging technology and expanding the sales organization to enhance cross-selling opportunities and customer engagement [57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects, emphasizing the importance of a robust North American footprint and global service partner network [62] - The company is preparing for a muted peak season due to ongoing tariff uncertainties but remains committed to supporting customers through these challenges [31] Other Important Information - The company has approximately $23 million in cash and only $20 million drawn on its $200 million credit facility, indicating a strong financial position [5] Q&A Session Summary Question: Impact of changing trade policy on business, especially in Mexico - Management noted that trade policy remains fluid, with customers navigating tariffs and supply chain challenges, but sees Mexico benefiting from these dynamics [12][13] Question: Management of business amidst import volatility - Management indicated that customers are struggling with supply chain management due to volatility, leading to inventory adjustments [15] Question: EBITDA margins and quarter performance - Management attributed lower EBITDA margins to a lack of pull-forward in the current quarter compared to previous periods [16][17] Question: Depreciation and amortization changes - Management clarified that the decrease in depreciation and amortization was due to the end of the amortization period for a previous acquisition [21][22] Question: Capacity for future acquisitions - Management expressed confidence in their ability to pursue multiple acquisitions, citing low leverage and a strong capital structure [26][28] Question: Expectations for year-end activity amidst tariff situations - Management anticipates a muted peak season but expects continued growth in Mexico and Southeast Asia as customers diversify their supply chains [30][31] Question: Target leverage for balance sheet - Management indicated a normalized target leverage of around 2.5 times, with flexibility for temporary increases for the right transactions [35] Question: Tax rate and adjustments - Management explained that the tax rate for the quarter was adjusted due to an overestimate in the prior period, resulting in a slight benefit [48][49]