Radiant Logistics, Inc.
Q4 2017 Earnings Call Transcript

Published: 13 Sep 2017

[Operator:]

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 Fourth Fiscal Quarter and Year Ended June 30, 2017. 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.

[Bohn Crain:]

Thanks Omar. Good afternoon, everyone and thank you for joining in on today’s call. We’re very pleased to report another year of solid financial results for fiscal 2017 setting new records across several key financial metrics. Net revenues of $194.6 million up $7.9 million or 4.2%, adjusted net income of $15.8 million up $4 million or 33.9%, adjusted net income per share of $0.32 per basic and fully diluted share up $0.08 or 33.3%, EBITDA of $23.4 million up $11.9 million or 103.5% and adjusted EBITDA of $29.6 million up $5.2 million or 21.3%. In addition, we also set a new record in terms of our adjusted EBITDA margins up 210 basis points to 15.2% up from 13.1% over the comparable prior year period. As we previously discussed, our incremental cost of supporting the next dollar of gross margin is very small and we're very excited about our opportunity to drive further expansion of our adjusted EBITDA margins as we continue to scale the business and we leverage the benefits of our ongoing technology investments. For the quarter ended June 30, 2017 we posted revenues of $201.8 million up $19.4 million or 10.6%, net revenues of $49.8 million up $3.3 million or 7%, and adjusted EBITDA of $6.9 million up $1.5 million or 27.8% over the comparable prior year period. These quarterly results reflect the impacts of the margin pressures on our U.S. brokerage operations associated with the excess capacity that continued to the quarter ended June 30 which proved to be a drag on the balance of our operation. There are early indications that this excess capacity of the asset base carriers may finally be getting absorbed in the marketplace which would suggest some relief on the margin pressure on our brokerage operations on the horizon. It will take a few quarters to work its way into our results given the contracted nature of our U.S. brokerage business but we would view this as a net positive over the longer term assuming of course that this trend holds. We also continue to make progress on the acquisition front having recently completed three tuck-in transactions with Canada-based Lomas Logistics in April 2017, Dedicated Logistics Technologies in June 2017, and Sandifer-Valley Transportation & Logistics in September 2017. We're very happy to have these new operations as part of our organization. One of the principle thematics of our acquisition strategy is supporting our strategic operating partners in their exit strategies by converting them to company-owned operations and we believe this gives us the best opportunity to drive margin expansion and create durable shareholder value. I will also provide a quick update on our technology initiative. Through our ongoing investment and technology, I believe we have a unique opportunity to deliver state-of-the-art technology platform to our strategic operating partners and the end customers that we serve. At the same time technology is the key to driving productivity improvement in the back office, and can ultimately help facilitate revenue synergies across the platform. With the new SAP accounting system fully deployed here in Bellevue, we are now focused on a number of productivity initiatives to streamline our back office processes and accelerate the realization of back-office cost synergies associated with existing and future acquisitions. We are also on track to hit our next major milestone which is the deployment of a new SAP based TMS which we are expecting to file little later in calendar 2017. Over time we will sunset our legacy freight forwarding platform CargoWise, as we migrate our forwarding operations on the SAP. We expect the transition from CargoWise to SAP one station at a time giving us the opportunity to address any challenges as we go and mitigate the risk of this transition. Similarly over time we will also expect to replicate the same two-step integration process for Wheels International in Toronto and Wheels Clipper in Chicago. First, integrating the various legacy TM applications at Wheels to our SAP accounting system and eliminating within a back-office operations and shedding legacy accounting systems, and then ultimately sunsetting the same Legacy Wheels TM applications as we migrate to SAP. Getting our various operations onto a singular platform will not happen overnight, but we believe that we have the right strategy to drive long-term shareholder value in terms of maximizing our opportunity to capture revenue and cost synergies while positioning ourselves to support future growth through acquisition. Let me also take a moment to talk about our capital structure. In June of this year we were able to expand and extend our senior credit facility with Bank of America and Bank of Montréal. We expanded the facility and that - we increased the facility from $65 million to $75 million and also added a $50 million accordion feature to support our M&A activities. The facility is available to fund future acquisitions, capital expenditures or other corporate purposes including if warranted at the time the repurchase of the company's common stock and/or the redemption of the company's $21 million redeemable perpetual preferred stock which is redeemable at the company's option beginning in December 2018. As most of you on the call will appreciate, there's been some level of confusion surrounding our redeemable perpetual preferred stock. As a reminder, we raised $21 million of the preferred back in 2013. The preferred pays a dividend of 9.75% and included a five-year no-call feature at the time we issued it. This no-call feature expires in December 2018. This means we have the right but not the obligation to call the preferred at par at any time starting on or after December 2018. We estimate an after-tax tax savings of approximately $1.5 million per year assuming we retire the preferred. Also as of June 30, we had over $50 million of availability under our facility clear capacity to retire the preferred. I'll wrap up my comments by saying that we head into the new year with a focus on leveraging our ongoing investment in technology, focus on continuous improvement of our existing business. We have low leverage on our balance sheet, strong free cash flow, and remain committed to our long-standing strategy to deliver profitable growth through a combination of organic and acquisition growth initiatives. With that, I'll turn the call over to Todd our CFO to walk us through our detailed financial results and then we'll open it up for some Q&A.

[Todd Macomber:]

Thanks Bohn and afternoon everyone. Today we will be discussing our financial results including adjusted net income and adjusted EBITDA for the three and 12 months ended June 30, 2017. Quarterly net income results; for the three months ended June 30, 2017 we reported a net loss attributable to common stockholders of 1,028,000 on 201.8 million of revenues or $0.02 per basic and fully diluted share which includes $953,000 of transition and lease termination costs and $1,638,000 on change in contingent consideration expense. For three months ended June 30, 2016 we reported net loss attributable to common stockholders of $633,000 on $182.5 million of revenues or a loss of $0.01 per basic and fully diluted share. This represents a decrease of approximately $395,000 with the comparable prior year period. Quarterly adjusted net income results; for the three months ended June 30, 2017 we reported adjusted net income attributable to common stockholders of $3,441,000. For the three months ended June 30, 2016 we reported adjusted net income attributable to common stockholders of $2,792,000. This represents an improvement of approximately $649,000 or 23.2%. Quarterly adjusted EBITDA results; we reported adjusted EBITDA of $6,915,000 for the three months ended June 30, 2017 compared to adjusted EBITDA of $5,420,000 for the three months ended June 30, 2016. This represents an increase of $1,495,000 or approximately 27.6%. Adding back transition costs associated with SBAs back-office representing an additional $275,000, adjusted EBITDA would have been $7,190,000 for the June 30, 2017 period versus $5,897,000 for the June 30, 2016 period which included an add-back for the 2016 period of $477,000. This represents an improvement of $1,293,000 or 21.9%. For the 12 months; 12 month net income - for the 12 months ended June 30, 2017 we reported net income attributable to common stockholders of $2,816,000 on 777.6 million of revenues or $0.06 per basic and fully diluted share which includes $2,260,000 of transition and lease termination costs and $3,431,000 on change in contingent consideration expense. For the 12 months ended June 30, 2016 we reported a net loss attributable to common stockholders of $5,565,000 on $782.6 million of revenues or a loss of $0.11 per basic and fully diluted share. This represented an improvement of approximately $8,381,000 over the comparable prior year period. For the 12 months ended June 30, 2017 we reported adjusted net income attributable to common stockholders of $15,792,000. For the 12 months ended June 30, 2016 we reported adjusted net income attributable to common stockholders of $11,793,000. This represents an increase of approximately $4 million or 33.9%. For adjusted EBITDA results we reported adjusted EBITDA of $29,595,000 for the 12 months ended June 30, 2017. This compares to adjusted EBITDA of $24,406,000 for the 12 months ended June 30, 2016. This represents an increase of $5,189,000 or approximately 21.3%. Adding back transition costs associated with SBAs back-office representing an additional $1,539,000 adjusted EBITDA would have been $31,134,000 for the June 30, 2017 period versus $26,814,000 for the June 30, 2016 which included for 2016 and add back of transition cost of $2,408,000. Overall this represents an increase of $4,320,000 or 16.1%. With that, I’ll turn the call back over to our moderator to facilitate any Q&A from our callers.

[Operator:]

[Operator Instructions] Our first question is from Jason Seidl of Cowen and Company. Please proceed with your question.

[Jason Seidl:]

Bohn, couple of quick questions here. When you're looking at your different businesses, can you talk a little bit about ranking them and what's the strongest right now as you look at the marketplace? And also on the brokerage, what gives you confidence that sort of the margin squeezes behind you guys?

[Bohn Crain:]

So if we kind of rack and stack the different elements of the business our forwarding business is performing well, has been performing well pretty consistently. It’s more transactional in nature and hasn’t been caught up in the tightening capacity environment to the extent - that our U.S. brokerage operations have been. The Canadian operations have really started to hit their stride. When oil prices went down and the Canadian economy was suffering relative to exchange rates and et cetera, it had been down a bit but it really is coming on strong and looks very positive as well in terms of the trend lines in our expectations for the Canadian operations. And as we've alluded to in our prepared comments kind of the weakest of the component parts right now is certainly been our U.S. brokerage operations the Wheels Clipper operations in Chicago, the ones that have been most directly impacted by the excess capacity dynamics and with the asset base guys trying to fill their trucks kind of caught up in that vortex. Even so we posted extraordinary results notwithstanding those challenges and as we get some - hopefully some tailwinds coming for brokerage, I think we can really start to print some really exciting results for folks. Ultimately the why - certainly the narrative and dynamics over the last call it six to eight weeks have been meaningfully more positive in terms of kind of seeing the behavior of the asset base carriers and kind of what they're doing in the marketplace and they are basically starting to the de-market customers in terms of taking their own pricing higher only to filling minimum contractual requirements and pushing more freight volume back out into spot market which is now trending higher than the contract rates. And the ultimate question that - you may in fact have a better perspective than me is how durable or the likelihood that this is going to sustain itself but with ELDs and regulation and driver shortage and all of those kind of macro trends, I think everybody has an expectation at some point the supply demand dynamic is going to come into a more normalized environment which is going to give us some relief. Whether this is that point of inflection and its going to stick or not that remains to be seen. But certainly the narrative - is more pervasive of I think across the industry and I think there is more bullish view on just in the conferences that I have attended a more bullish view across the industry of hopefully a change here.

[Jason Seidl:]

Now remind us obviously your forwarding business is more transactional, remind us of the split between contract and transaction in your U.S. based truck brokerage?

[Bohn Crain:]

Well it’s - in rough numbers I would say we're probably - within our brokerage business in the U.S. we’re roughly I would say 75% intermodal and 30% truck brokerage and it’s that intermodal business that’s more contract in nature than the brokerage component.

[Jason Seidl:]

So you’re going to get squeezed more so on the rail costs going up on the intermodal side right now then?

[Bohn Crain:]

Correct, well I said it a little bit differently, we have been getting squeezed and we see some relief on the horizon.

[Jason Seidl:]

Also looking at some of the opportunities you'll see there for more acquisitions some of the more recent ones have been tuck-ins by nature, do you foresee that continuing when you look at the pipeline that you have in front of you or should we read something different into getting that $50 million accordion feature put in there?

[Bohn Crain:]

Well we certainly place a lot of value on financial flexibility and being actionable with the right type of transaction or transactions present themselves. But no one should interpret the accordion that we’re on the verge of doing some super large deal that's not in our crosshairs at the moment. Again not to say that we won't do a larger transaction but our real focus is supporting our operating partners and agent locations and other networks who are looking for liquidity. We think we've got - we believe we’re uniquely positioned in the marketplace in kind of valuation structure and everything associated there to. All our lines with creating long-term shareholder value. We would - I think - to really boil it down we would rather buy $2 million EBITDA businesses at a five times multiple than $10 million EBITDA business at a 10 times multiple. So as we talked about before we would much rather kind of serially the smaller transaction take a portfolio approach and while at the same time supporting our operating partners who have been such good partners for a long time.

[Jason Seidl:]

And one question about your redeemable preferred to $21 million one. If that redeemable preferred date was September 1 with the preferred of 2017 with the preferred still be around?

[Bohn Crain:]

That's an interesting way to frame the growth, probably not, I don’t want to answer.

[Operator:]

Our next question is from Mark Argento of Lake Street Capital Markets. Please proceed with your question.

[Mark Argento:]

In terms of additional color on the acquisition strategy obviously it continues to - kind of go to aggregator for some of these smaller players on the market but could you provide any data - maybe you could help us think about same-store sales versus the businesses recently acquired. Just trying to get a better flavor of how well these businesses are performing once they're under roof so to speak and better understand the dynamic there? I know historically you've done a pretty good job of being able to keep the levels of business up and in some cases see things accelerate but any metrics in terms of same store already other kinds of data points you could provide would be very helpful.

[Bohn Crain:]

Yes, there is not much kind of acquisition earnings in our quarter or year ended June. So it's a relatively clean quarter so those year-over-year growth rates are pretty reflective of our same-store results. So I think that's a really positive story particularly in the context of what was going on within brokerage and I don't have that kind of with and without brokerage math in front of me but the business in the in the aggregate is doing very, very well. And then another kind of anecdotal way to look at that as well, is the change in contingent consideration. We took - I think it was $1.6 million charge because the businesses that we acquired are doing so well we're expecting to pay more out in earn-outs than originally expected in the way the financial accounting rules work we end up flowing that through the additional non-cash charge into our P&L.

[Mark Argento:]

If you were to take a look at particular $1.6 million charge, when you look at the outperformance of the business is it because they are under platform and have access to better services, a broader portfolio that’s getting cross-sold or is it that the customers of that particular business service are performing better either given the market there and/or geography.

[Bohn Crain:]

Again as usually – I think the combination of things, I think you know with the benefit of the robust platform, you know they have yet accessed the better technology, better buy rates, an opportunity to call on and capture customers that they may not have had the opportunity to go after in their prior environments. And then there's also just the practicality of their and their earn-out phase and this is their opportunity to maximize the value of their life's work. You know so they're out there busting their tails right to maximize our collective opportunity during the earn-out.

[Mark Argento:]

Any near-term exposure issues or operating issues with any of your facilities of around Houston or Florida?

[Bohn Crain:]

Certainly not from our - not from a company owns or environment. We certainly have agency locations in those individual locations, most of which they are in geographies where we're negatively impacted for sure. So we've been an eye out for them and there's certainly in our thoughts as they're working to that. So on a personal note, a terrific for them individually in terms of its financial implication on Radiant there's not much exposure on the forwarding side in particular.

[Operator:]

Our next question is from Marco Rodriguez of Stonegate Capital Markets. Please proceed with your question.

[Marco Rodriguez:]

I was going to piggyback on one of the earlier questions on the M&A market. Maybe Bohn if you could talk a little bit about what the valuations are kind of looking like out there and then maybe if you could talk about your guys capacity ability to do a large acquisition here in the near term if it was nice enough?

[Bohn Crain:]

Sure, I think kind of our general opposed M&A hasn't really changed right. We would expect you know companies doing plus or minus 2 million of EBITDA to attract plus or minus 5 times multiple and follow our traditional earn-out structure. Companies with earnings power less than that multiples would likely come down and companies with earnings power higher than that you know will likely attract higher valuations and structures that would be less attractive from our standpoint and relative to the earn-out structure that that we use on our smaller deals. So if we take a snapshot of our own balance sheet you don't have to work too hard to just kind of play with some math for a moment let's just assume that through a series of transactions we were going to go out and acquire $20 million of incremental EBITDA at a multiple of five that would be $100 million purchase price $50 million of which we would have to come out of pocket for kind of liquidity in our cash to fund those transactions. We would have the capacity within our existing capital structure to do that given the capacity we have now along with the benefit of the incremental AR and EBITDA that would come from the companies that we would on board. So there is kind of at least a framework to think about our capacity to grow within our existing capital structure on the smaller transactions. The larger transactions I think is a rule of thumb we were looking at a company doing $10 million of EBITDA I think we would have to expect to pay a 10 times type multiple for that business in this market environment. So we’re dealing with the same capital structure, but our ultimate – the incremental EBITDA we can onboard at a larger size gets ratcheted back just on – because of the valuation we can.

[Marco Rodriguez:]

I apologize also if my question was somewhat confusing I guess I was trying to figure out what are the valuations look like of some potential targets you have in your pipeline are they looking are – they more than out there and then also based on a lot of the kind of the internal things that you're working for the technology transition and getting the brokerage business back right up your capability of kind of taking on a large acquisition and integrating that?

[Bohn Crain:]

That is a different question that I understood so let’s kind of that one as we talked about before we really view ourselves as having three platforms from which to support acquisition – from integration standpoint we have our Canadian platform in Toronto that can support Canadian M&A like our recent acquisition of Lomas and I would view them as having lots of kind of organizational and technology and leadership bandwidth to support incremental M&A there. I think we also have the opportunity from kind of organization and bandwidth and back office infrastructure in Chicago to do things on the U.S. brokerage side. And on the forwarding side I think we certainly have the capacity to continue to do these smaller tuck-in acquisitions one I guess to point out the obvious, but maybe not so obvious as when we convert an existing agent station to a company-owned stores there's no incremental pressure on our back-office at all because we’re already doing all that back-office work so that would simply be a financial transaction in that regard. But at the same time we have the capacity to onboard additional incremental tuck-in agencies like our most recent acquisition of Sandifer-Valley in McAllen, Texas. So we can continue to do those as well, but ultimately to your point you we’re not likely to go – do another major freight forwarding acquisition until we get further downstream with our technology upgrade.

[Marco Rodriguez:]

And then in regards to the technology upgrade you brought nice color on the strategy there as far as the implemented is concerned could may be kind of help us think about timing when do you think the transition will be complete i.e. just kind of rolled throughout right your whole operations?

[Bohn Crain:]

We’re piloting the TM or transportation management system here in the coming months in a number of our company owned locations and assuming we get everything working the way we would expected to. We will - it’s our hope and expectation to be able to aggressively deploy it over the course of calendar 2018 so hopefully in Q1 of 2018 we’ve kind of move beyond the pilot phase and have matured the solution set enough that we can begin to take it out to our agency locations. And then it will based upon our experience and kind of the agency locations capacity to work with us the transition, I would you know hopeful over the course of calendar 2018 we can get that done.

[Marco Rodriguez:]

And last quick question kind of housekeeping item. Lomas Logistics what was the revenue contribution in the quarter for them or if you have some sort of organic growth rate for year-over-year will be helpful?

[Bohn Crain:]

I don't have that at my fingertips, Marco I apologize.

[Todd Macomber:]

I think it would be pretty darn small because we only had a quarter of what it is and they’re on a revenue basis they weren't that candidly they weren’t that large on a revenue basis.

[Operator:]

Our next question is from David Campbell of Thomas Davis and Company. Please proceed with your question.

[David Campbell:]

Just wanted to ask you why the company's expenses been so much from the December and March quarters, I’m talking about personnel costs and also SG&A both substantially higher than the March quarter and the December quarter is there some nonrecurring charges in there that you had to put in the June quarter because - what that meant was that your adjusted EBITDA for the June quarter was actually down from the December quarter?

[Todd Macomber:]

Well there is seasonality in the business for sure right, so ultimately while we’re looking at the kind of the absolute dollar change we also look at those dollar amounts as a percentage of gross margin. So as we’re converting agency locations to company-owned stores and/or acquiring other businesses in, we would expect those numbers to go up they are not going to go - we wouldn’t expect them to go down as we would grow. We would expect them to go up, but as a percentage of gross margin they will continue to go down.

[David Campbell:]

But they didn't been this June quarter, the gross margin was 50 million that's what it was in December but those of course are much higher than they were in December. So it seems like you probably have more company-owned stores in that?

[Todd Macomber:]

Yes, we exactly that would be kind of – part of the conversation but ultimately I think if we look at EBITDA as a function of gross margin like that’s kind of the ultimate math that we would look to.

[David Campbell:]

That was down from December to June it was down?

[Todd Macomber:]

We compare that against the prior year period as Bohn mentioned the seasonality and the adjusted EBITDA as a percent went up to like its 15.2%.

[Bohn Crain:]

On a comparable year-over-year basis we improved to 13.9% from 11.6% David for the quarter and on comparable year-over-year basis we improved from 13.1% to 15.2%, so on a sequential basis…

[David Campbell:]

So these quarterly expenses in the June quarter they are expected to continue at that level, there is nothing to bring them down?

[Bohn Crain:]

A lot of its going to be the Lomas transaction. We bought on DLT Dedicated Logistics Technologies so those – well certainly with the Dedicated it was an agent-based store, but then the commissions go down but the personnel cost go up associated with those tuck-in acquisitions. So the personnel costs you know should be fairly consistent at this rate right now based upon where we are with the new acquisitions.

[David Campbell:]

Same with the SG&A?

[Bohn Crain:]

Yes, we’re going to have a lift in that too as we acquire more and more stations and the personnel costs are going to go up probably a little bit because Dedicated was only in these numbers for one month as opposed to the full three months.

[David Campbell:]

Right, but on.

[Bohn Crain:]

But in the years…

[David Campbell:]

The gross margin percentage should go higher as you - and converts do acquire more stores to the company locations?

[Bohn Crain:]

That’s correct.

[David Campbell:]

Gross margin percentage should go up it should offset the increase in those costs, isn’t that right?

[Todd Macomber:]

Yes, we’re going to get more gross margin dollars right and then what happens when we convert is we have less operating partner commissions but along with that we’re going to have personnel costs, we have SG&A, we have facilities all of those costs. So obviously we’re bringing in new stations we’re going to add to the gross margin dollars if we convert like Bohn mentioned earlier, they are already part of our overall financials. And so the gross margin dollars in that case for instance for conversion would be - that would stay the same and what’s going to move is the operating partner commissions are going to decrease and we’re going to have increases in personnel costs, SG&A, facilities et cetera.

[David Campbell:]

And last question was it doesn’t sound like Lomas actually contributed any earnings in the June quarter. I think it varied little in revenues and you had acquisition costs so it probably didn’t make any money or a very little in the June quarter is that right?

[Bohn Crain:]

Yes, I would that was fair yes, for that individual quarter but having said that we’re very bullish on the Lomas transaction and what it’s bringing to the network.

[David Campbell:]

But the acquisition costs were largely related to Lomas?

[Todd Macomber:]

Yes exactly, so yes so that’s kind of one-time thing right and then moving forward they’re not going to – it’s done, the transactions occurred.

[Operator:]

Our next question is from Kevin Sterling of Seaport Global Securities. Please proceed with your question.

[Unidentified Analyst:]

Bohn this is actually Will on for Kevin. Just wanted to ask question around the - I guess U.S. forwarding net margin and we’re just doing some quick back in the envelope stuff here with the K coming out. Looks like the - I guess the U.S. forwarding net margin was at its low point here in the fiscal Q4 for the 2017 year and was curious if you saw that kind of progressing into the Q1 2018 quarter. I know you’re talking about brokerage getting a little bit better, truck load market getting a little bit tighter, helping you guys out. Do you think that that margin we should look back closer to the 30% range as we move into 2018?

[Bohn Crain:]

Yes, I think we will see improvement. The ultimate timing will be interesting - I would not expect meaningful shifts for the quarter ended September because some of these changes that we've been talking about and that people are experiencing kind of are happening kind of mid-quarter or towards the end of the quarter. But for the quarter ended December I think that will be hopefully a quarter or more of collective of what we’re hoping to see in terms of rates.

[Unidentified Analyst:]

And one just housekeeping item, just kind of looking at the year-over-year numbers between brokerage and forwarding looks like there might have been a reclassification of revenues from brokering to -- brokerage to forwarding what was that about if I’m looking at this right it looks like the net revenues didn’t change too much?

[Bohn Crain:]

I have to look at the…

[Todd Macomber:]

[That's in fact] with the question.

[Operator:]

Ladies and gentlemen, we have reached the end of the question-and-answer session and I would like to turn the call back to management for closing remarks.

[Bohn Crain:]

Thank you. Let me close by saying that we remain very excited with our progress and prospects here at Radiant and we remain very bullish on the growth platform that we've created and the scalability of our non-asset based business model and the benefits that will flow from our ongoing investment in technology. We have low leverage on our balance sheet, strong free cash flow and remain committed to our long-standing strategy to deliver profitable growth through a combination of organic and acquisition initiatives. Thanks for listening and your support to Radiant Logistics.

[Operator:]

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.