Radiant Logistics, Inc.
Q3 2013 Earnings Call Transcript

Published: 15 May 2013

[Operator:]

Greetings, ladies and gentlemen. This afternoon, Bohn Crain, Radiant Logistics' Founder and CEO, will discuss financial results for the company's 3 and 9 months ended March 31, 2013. Following his 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. Thank you. You may begin.

[Bohn H. Crain:]

Thank you. Good afternoon, everyone, and thank you for joining in on today's call. We are generally very pleased with the results for the quarter ended March 31. In what is traditionally the slowest seasonal quarter of the year, we delivered the highest profits in the history of the company, with adjusted EBITDA of $2.9 million, up $1.3 million and 80.9% over the comparable prior year period. Also of interest is the comparative margin expansion for the quarter, with our EBITDA as a function of net revenues up 560 basis points to 13.5%. It's certainly nice, from my standpoint, to be able to present our investors with a reasonably clean quarter at the high end of our guidance, with DBA in the rearview mirror and focus on the opportunity ahead. As we've discussed on our previous calls, the heart of our growth strategy continues to focus on bringing value to the agent-based forwarding community; leveraging our status as a public company to provide our partners with an opportunity to share in the value that they helped create; providing a robust back-office platform, which is translating into better purchasing power with our vendors and more sophisticated technology solutions for our customers; and offering a unique opportunity in terms of succession planning and liquidity for our station owners. Within this framework, we are fueling our growth through a combination of organic and acquisition initiatives. Organically, we continue to focus on improving the tools available to our existing network as well as expanding the network itself by onboarding new agent stations that recognize the benefit of our platform. In addition, we will also continue to be opportunistic in our pursuit of accretive acquisition opportunities to further accelerate our growth. Here, too, the core of our effort will remain on acquisition candidates who are linked to the agent-based forwarding community. This would include the conversion of our current agent stations like our most recent acquisitions in Los Angeles and Portland; the acquisition of agent stations participating in competing networks, like our Laredo and JFK acquisitions; and ultimately, the potential acquisition of other competing networks like Adcom and Distribution By Air. If you've been following us for any period of time, you will know that this is not new news. This vision and strategy has held constant since our launch in 2006 and continues to serve as our guideposts. As we continue to evolve our network to include more and more company-owned locations, we will have an increasing opportunity to more directly influence the network's organic growth. As highlighted in our press release, we have a number of initiatives underway that we believe will be helpful to the cause. One broad thematic would fall under productivity improvement, handling our existing business more profitably. Our launch of Radiant transportation services for truck brokerage and Radiant custom services for customs house brokerage both fall under this category. The second thematic would be winning new business. In our earliest days, when we had no company-owned operating locations, only agent stations, our ability to drive organic growth was limited by our ability to onboard a new agent location, plus whatever new business our existing agent network could generate. Now, with more and more company-owned locations coming online, we now have a platform to drive a more focused effort on sales through people more directly under our control. One word of caution

[Operator:]

[Operator Instructions] Our first question comes from the line of Jeff Martin with Roth.

[Jeff Martin:]

Bohn, could you explain what remote location filing is and how that will be rolled out, what kind of implications there are for growth in that?

[Bohn H. Crain:]

Sure. So historically, the network has used third-party providers of customs brokerage services. So in connection with international imports, we have to clear customs and facilitate any duties and taxes associated with those -- with the movement of goods. And again, historically, we've been paying third parties for that and -- kind of in the course of us providing the kind of the all-in service to the end customer. So it's long been part of our strategy, and it's kind -- although we haven't done in the area, it's been an area that we've also expressed some interest on the acquisition side of things to internalize this function and effectively stop the leakage. We already control the business. We're servicing the freight, so let's maximize our -- kind of the revenue opportunity that, that holds for us. Specifically, RLF is an indication that you've been approved by customs to effectively, from a centralized location, provide those custom clearances to various points of entry across the U.S. So on a centralized basis here in Seattle, as an example, with our status as a remote location filer, we can support custom clearances in Miami, Atlanta, New York, Dallas, L.A. and so on. So it's really an opportunity for us to roll out, I'll use the term, a captive customs brokerage capability to service the network. And although we're not expecting it, in and of itself, to be a huge moneymaker, if these -- what's the saying? If you manage the pennies, the dollars and cents will take care of themselves. So just a part of the comprehensive solution that we're proposing -- or kind of endeavoring to organize and deliver for the benefit of our operating partners and the end customers that we serve. And in fact, the same general thematic also holds true on the truck brokerage side, but there's actually probably more dollars -- not probably, there definitely are more dollars involved on the truck brokerage side of things. As we get larger and have scale and develop density and individual trade lanes, what historically has moved on an LTL or less-than-truckload basis, we can begin to effectively run our own trucks, build consolidations across the network, really just optimize the existing set of relationships and business that we have, which, over time, will translate into better yield on that business.

[Jeff Martin:]

Okay. And then you mentioned, also, that you're building a more robust sales organization. I was wondering if you could elaborate on that, and do you expect that to be a meaningful contributor to growth?

[Bohn H. Crain:]

I certainly think that it will be, over time. We're really on the kind of at the -- on the front end of that process. But we -- starting here in Seattle, as, historically, Seattle was really the back-office nerve center for us, and we hadn't really developed kind of a local operating presence in Seattle. And that has evolved over time, and we've started adding some salespeople to drive some growth here. And if you think across the network now, in terms of where we are, we have the opportunity to really interact in the field in ways that historically we didn't with our operations at JFK and Newark and L.A. and Detroit and Laredo and some of these others kind of gateway locations where we're interested in getting more actively involved. So I don't think that it's going to -- that next quarter, it's going to be a big driver in change, but it's part of the underlying opportunity that we historically didn't have, that we will have going forward, that's a by-product of the strategy that we're executing to take on more and more company-owned stores. If you'll -- we kind of come back and look at our P&L at a very higher level, gross margin net of agent commission, our kind of net profit to the house, if you will, from an agent-based station, the overall yield of that might be 8% or 9%. Well, in a company-owned store environment, the leverage or kind of the residual contribution back to us, because we're not paying out agent commissions, is dramatically higher. And now that we have the legal stuff and have the integration issues behind us, we're really turning our attention to kind of add that opportunity to our agenda and some of the initiatives that I've got the team here working on.

[Jeff Martin:]

Okay. And the domestic revenue was down in the quarter. Are you seeing that firm up at all? What trends are you seeing today [indiscernible]...

[Bohn H. Crain:]

I think the biggest driver in that is on a comparative -- remember, the DBA folks poked us in the eye, which was the basis of the litigation. And on the comparable prior year period, the business that they stole was in there. And so I don't think -- and once again, this isn't new information. We're just seeing the numbers put in front of us. But it's -- so I do think that, that's a trend. It was a kind of the onetime event, more focused on the DBA dynamics that we've all suffered through.

[Jeff Martin:]

Okay. And then acknowledging that you're more focused on net revenue at this point, but you did guide to an $80 million gross revenue number in the quarter, what were some of the things that were the delta in the period that caused you to come in a little bit shy of that?

[Bohn H. Crain:]

If anything, I would have to kind of point back to the DBA dynamics as much as anything, and how that kind of sustained itself. So that's probably all that I have to offer on that particular point. I mean, on a comparable basis, that was the biggest driver. And with kind of the offsetting aspect of that being the huge positive, we were able to drive on the SG&A side of things the countermeasure, if you will, to the sort of challenges that we were facing in L.A.

[Jeff Martin:]

Okay. Are you able to quantify what DBA cost you in revenue in the period versus last year?

[Bohn H. Crain:]

We certainly will at the courthouse, but I don't want to do it on this call.

[Jeff Martin:]

Okay. And then in the Q, there was mention of recovery of bad debt expense. I was wondering if you could quantify that -- to benefit the SG&A in the period?

[Bohn H. Crain:]

I don't know that there was -- there was some, but I don't know that there was a huge driver in the number. We normally, we take a fairly kind of quantitative approach to AR when it's aged out over 90 days and kind of book up our reserve to be conservative. So at the end of the day, these were numbers that previously we had reserved for that ultimately came home, and that would be an ongoing dynamic. But not a big -- a lot of it relates to -- from a geographic standpoint, related to our Mexico operations down in Laredo. But that's kind of been pulled back and paid, notwithstanding the reserves, so not in a position to get into the precise math.

[Jeff Martin:]

Okay. The reason I asked is $2.1 million of SG&A seems anomalously low. If you go back the last 3 quarters, it ranged from $2.5 million to $3.2 million. I'm wondering if the low $2 million range per quarter is a reasonable run rate to assume for those modeling the business?

[Bohn H. Crain:]

Yes, well the -- I'm not sure that I can engage with you on those precise terms right now. But anecdotally, I'm happy to kind of a circle back with me or Todd to get into some of those more precise details. But the savings in L.A. alone is worth over $1 million a year to us. So without kind of looking at the same number as you are here on this call, there's at least $250,000 that's L.A. quarter-over-quarter.

[Jeff Martin:]

Okay. And then there was some reduced legal and then some AR. That would explain the delta, the rest of the delta. Okay.

[Operator:]

Our next question comes from the line of David Kamen [ph] with Aegis [ph].

[Unknown Analyst:]

First question, in the press release, you alluded to an initiative to internalize some of the work that you've been outsourcing as far as the truck brokerage and customs house brokerage. Could you quantify what the margin impact you think that will have going forward?

[Bohn H. Crain:]

I don't want to do that at this early stage. I mean, there's big opportunity, but I don't want to -- I don't think it's productive or helpful, at this early stage, to start planting the flags. We know it's a big opportunity. But at this point, we're just as happy to be judged by the performance of what we execute rather than people trying to project and build models with the escalators. Candidly, Dave, at this point, I'm just trying to get fair value for what we're doing on a trailing basis.

[Unknown Analyst:]

Okay. And then also, could you give me some sense as to the opportunities as we roll through the balance of calendar 2013? Are there opportunities that aren't [ph] onboarding additional new agent stations? And then if you could take me through kind of the margin impact that you think that will have.

[Bohn H. Crain:]

I think we really have opportunities across all of these -- all of the aspects of our business model. We have opportunities to onboard new agent stations. We certainly continue to talk with a number of acquisition candidates. We continue to have existing agent stations raise their hand and express an interest in engaging in conversations and converting to company-owned stores. So I'm happy to talk specifically or to try to go through some mental modeling of what an agent station would look like, but from my standpoint, our business model and its strategy is firing in all cylinders in terms of their respective pipelines and the opportunities that we continue to look at.

[Unknown Analyst:]

And then if you could just...

[Bohn H. Crain:]

Let me come back to your specific question. The ultimate contribution from an individual agent station is unique to that individual business location. And it can literally be all over the map, no pun intended, in terms of what that can look like. But a reasonable -- I think a conservative way to look at it would be that the average new agent station may be $1 million to $5 million of incremental revenue. And as a percentage of their gross billing, just to kind of -- I think, kind of keep it conservative, maybe think of that contribution of being 7% or 8%. So you're looking at $70,000 to $350,000 of incremental bottom line contribution of an agent station, just kind of depending on its own unique characteristics and the business that it's servicing. And then I'd be remiss to not make the point, our incremental cost of supporting that next dollar of gross margin is virtually 0, so those dollars should, for all intents and purposes, make their way to the bottom line.

[Unknown Analyst:]

Okay. All right. Are there -- this is my final question. Are there additional opportunities to consolidate some redundancies in certain geographies and drive cost down further, or you've pretty much pulled out all that you think you can do at this time?

[Bohn H. Crain:]

No, I think there are opportunities. I guess, let me start at the high level. That was kind of the softball down the middle of the plate, so let me take the opportunity to hit it. As we acquired other agent-based networks, there were significant back-office costs with redundant kind of the network infrastructure at Adcom and DBA that we were able to capture. And as we move through the Los Angeles transaction, there's kind of a second-order opportunity at the station level where we already have a company-owned store. So because we already had a company-owned store in Los Angeles, when we converted an agent station in Los Angeles to a company-owned store, we basically had 2 of everything. We had 2 facilities, 2 heads of ops, 2 heads of sales and so on. So that created the opportunity to tighten things up in that market, which is all a long way of saying we have the opportunity for additional cost synergies when we do an agent conversion where we -- in a market where we already have a company-owned station. So the ultimate answer will be, it depends. So if we do a conversion where we don't already have a company-owned store, then we wouldn't expect to have -- to be able to get those types of synergies. But Where we do already have a company-owned flag -- and, again, those markets are L.A., Laredo, Baltimore, Newark, JFK, Detroit, Seattle, Portland -- in those markets, where we already have an infrastructure and platform in place, were we to be active in those markets, we would have opportunities for synergies.

[Operator:]

Our next question comes from the line of Adam Wyden with ADW Capital.

[Adam Wyden:]

Okay. All right. Well, it's nice to see a net income number for the first time in 9 quarters. I guess I have a couple of questions here. It seems like you're starting to recover from your asset indigestion on the acquisitions, in that you're discussing these organic growth opportunities. I'm curious as to why you're not discussing what the kind of the scope and scale of it is. I'm just kind of curious as to, like, you talked about organic growth, but you won't kind of speak to what you think the opportunity is. I mean, maybe not tomorrow or in 6 months but, I mean, over the next however many years, I mean, how do you think that this should improve your business over time, the customs brokerage and the truck brokerage?

[Bohn H. Crain:]

Again, not to try to be argumentative, but we just don't see a lot of upside in getting down into the weeds on the precise aspects of the initiatives. We know that they're going to put points on the board, and we have some good ideas about the opportunity and what it represents. But what I don't want to do is take a real positive and have folks turn it into negative. We may think we're going to do 20% and do 15%, and then people yell at us because we only did 15% when we said we were going to do 20%. Basically, it's just not worth it.

[Adam Wyden:]

Let's talk about something else. You've been corresponding with the SEC -- pretty fervently on the SEC, anyone who goes on sec.gov correspondence. And they've actually had some amazing points that I've made with you over the calls over the years. One point that I pertinently pick up is that your assets are going up and your operating income and your net income is going down. They want you to put further color in your MD&A as to what's driving that. I guess, my first question is -- obviously, DBA was a doughnut. Are you ever going to have to impair book value on that from a goodwill impairment testing standpoint? And I'd really like you to kind of walk us through, over the phone, about the 10-Q. Because when I go to the 10-Q and I look at it, I'm really just trying to understand, x acquisitions, how much the business is growing. And if you could walk me through that, and everybody else on the call -- could you walk us through that, how much the business grew quarter-over-quarter or sequentially? Or how should we think about the organic growth? Because, clearly, the SEC is curious about it as well.

[Bohn H. Crain:]

Well, let's kind of break this apart and take it a piece at a time. First, kind of in the ordinary course, we get -- every public company gets a review every 3 years, more or less. So the review was standard in that regard. And it is ordinary course for questions to be asked and for us to respond to make sure that, ultimately, we're giving the kind of good and appropriate disclosure within our financial statements. And so they raised some points, we responded as to how and why we do what we do. And it's actually been some time since all of that occurred. And at least by my recollection, there was no substantive change made in our disclosure. I think the only thing that I can actually recall changing was that they asked us to reorganize, to have -- to organize the MD&A to talk about net income before we talked about EBITDA.

[Adam Wyden:]

I think it speaks to a larger point, which is, like, you've done all these acquisitions and it's very hard to terse out how much organic growth. And over the last 10 quarters, since the DBA thing started to unravel, every other person, whether it's me or Jeff Martin or anyone else, we've all asked you kind of what the organic growth in the business is. It's actually nice to see that you've kind of slowed down on the acquisitions, because the amortization goes down and you can actually see the net income. I guess, the larger question that I'm having is, okay, so you've lapped DBA, right? DBA was a June 31 transaction, 2011, and the business -- I don't know when Paul and his wife effectively took the business, but I think the question is, at some point, you're going to start lapping quarters where you don't have DBA, and if you keep doing deals, I think people want to understand what is the organic growth. Because, as the SEC pointed out in their comments, it's very hard for people to understand what they're paying for and what's driving the growth of the business. One data point was operating income, and cash operating income and net income are down and assets are up. Now the answer might just be that you paid too much for DBA and there's a goodwill and you got to work through the other part of it on the operating income. I guess, I'm just trying to understand, when I look at this filing, I'm trying to look at it and I look -- and I'm going to specifically here, on the Rule G at the back of the 10-Q, I'm looking specifically at the March 31, 2013. Now your net transportation revenue was up 6.3%. Now, is that a pro forma number? What is that number that I'm looking at? And I'm looking at the adjustments in accordance with SEC rule Regulation G in thousands. Is that -- on Page 28 of the 10-Q. Is that a pro forma number? What is that 6.3%?

[Bohn H. Crain:]

I don't believe that's a pro forma number. I believe that's an actual number. There are some pro forma -- further back in the filings, there are some pro forma numbers on an "as if acquired in comparable periods." And I think that shows that, on an all-in basis, that I think revenues were down 5%, I think.

[Adam Wyden:]

And that's inclusive of DBA , is that correct?

[Bohn H. Crain:]

That would be all -- that pro forma is intended to be an "as if all companies were owned over the full comparative prior year periods."

[Adam Wyden:]

Including DBA?

[Bohn H. Crain:]

Yes.

[Adam Wyden:]

So what you're saying is that, that 5% in the 9 months ended includes the loss of DBA, where you had -- so let me just walk this back with you. So you had March 31, 2012, right, and then you had the quarter ended December 31, 2012, right, and then the quarter before that is September 2012. And so the 9 months ended -- no. So March, December, September, right now, did the DBA -- I mean, so the question I'm asking is -- you bought DBA in June 31, 2011. When did those sales actually walk out the door? Because I'm just trying to understand how much of the DBA is in that 5% negative comp, if that makes any sense. And clearly, we got none of it this year. So I know -- I'm comfortable with the 2013 number. I'm just trying to look at the 2012 number and really kind of understand how much of this -- you understand where I'm going with this?

[Bohn H. Crain:]

Yes and no. First, I want to kind of realign the conversation just a little bit, because I certainly take strong exception, as with all of our business partners operating under the DBA brand, to suggest that they aren't contributing to the organization. Just patently isn't so. They're doing a great job. We're very proud and happy to have them a part of the network. And the goings-on in L.A., at least from my standpoint, go in the category of "don't throw the baby out with the bathwater." And we are working through all of those challenges. We have them behind us. We just reported the strongest quarter in the history of the company, and we basically are in line with where we said we are going to be.

[Adam Wyden:]

And I guess from my perspective, I've been a shareholder, as you know, since 2010. And shareholders have gotten 0 value of the work that you've created. So if you were a shareholder in May of this date in 2011, you basically -- I got to go look at the stock chart. You created 0 equity value for shareholders. So I look at it from my perspective, and there's 20% more shares outstanding and the stock is at the exact same price. And so maybe the market is misvaluing you, or maybe you're going to make $20 million of EBITDA. But I guess my understanding is, and I think that the greater understanding is, is that acquisitions are risky. And that when you buy something and your asset walks in and out the door every day, the market really doesn't like that. And I guess what I'm trying to kind of get here is, is that the plan going forward? I mean, you seemed to say on the call earlier that, although you're focused on organic growth, you're not walking away from acquisitions. I mean, maybe your -- I mean, is your acquisition plan different? Are you going to make it 3x earnout and 1x stock? Because paying cash and having cash walk out door doesn't seem like an option. Clearly, the stock market over the last 2 years has not rewarded you for such.

[Bohn H. Crain:]

Well, I think, ultimately, depending on the horizon that you look at, there's -- people are going take different views. We -- and I personally am very comfortable with the strategy that we're executing and the ability to create value for shareholders over the longer term executing the strategy. And certainly, I mean, the math is the math, and our stock price hasn't reflected some of the things that we've done. But candidly, our results haven't reflected what was available to us, which is beginning to be reflected in this quarter that we just reported because we were able to get some of those challenges behind us. Now I wish life was always up and to the right, but there's -- in life and in business, there are zigs and zags, but we feel very comfortable and capable to maneuver those waters to deliver value over the longer term.

[Adam Wyden:]

How prepared are you to show to the market that they're wrong? I mean, I guess, obviously, actions speak louder than words. To the extent -- what is your availability to buy back shares or buy in the mezzanine debt? Because, clearly, if you lower your interest expense and buy back stock, you can brute force earnings. You know that. You saw that playbook back in July '09 and '10 when you bought back 15% to 20% of the company. I mean, why not push it now? I mean, clearly, the market is not rewarding you for the value you think you're creating. Why not tell them to shove it and show them what you're made of? I mean, what's precluding you from doing that?

[Bohn H. Crain:]

Those remain viable options that are on the table that we consider right along with our other opportunities as we think about allocating capital. So it's certainly on the table for discussion. That's why I made a point to reference it in our prepared -- my prepared comments. We have a -- I think we have a lot of tools available to us to create value over the longer term, and I believe those investors who have a longer-term horizon and see the same opportunities that we do are going to be well rewarded. But the flip side of that is that's why there's buyers and sellers.

[Adam Wyden:]

I can tell you that I've been a long-term shareholder, and I'm not -- I'm as long-term an investor as it gets. That being said, I look at every capital decision when I buy a stock, and I look at what is the opportunity for permanent capital loss. As you and all of us have learned, buying an asset-light business, like DBA, and having your asset walk out the door, whether it's -- and I'm not speaking to your other franchise partners, I'm talking about the company-owned store, which was a very large EBITDA contributor, walk out the door. That's very scary. And so I guess, I think that your statements are kind of alluding to the fact that, I guess, to me, if you just went through hell and back, why would you subject yourself to another 5.5x EBITDA transaction network company deal when I think the market would reward you for combining locations in certain cities or refocusing onboarding or really spending a lot of energy on these organic initiatives and spending your time on the capital structure, refinancing the mezzanine debt, showing people that you're okay making -- increasing our free cash flow steadily without putting their capital at risk? I don't know if you saw the auto info [ph] transaction, but that was a truck brokerage transaction, very small business, and it sold for like for -- it sold for kind of low x EBITDA. And so maybe there's a re-reference point for your agent partners. I mean, clearly, you paid a lot of cash for something that is kind of, I don't know, a doughnut. And so I guess my question is, have you reconsidered how you're financing these deals and how you think about this? Because to me, it seems like the best course of action for you is to work on refinancing your debt, buying back stock and basically taking advantage of the market not understanding you and then going back and letting your currency be an asset to you when the market rewards you for the business that you're creating. Because it...

[Bohn H. Crain:]

A couple of points, and I think we're going to need to wrap up, as we're exceeding our time here. But a couple of points. One, at the end of the day, the biggest problem with DBA was it didn't have an earn-out component. So we didn't structurally manage appropriate -- in hindsight, boy, we sure wish we would've had an earn-out. We wouldn't have had the same issues. And so if there's one any -- one real lesson learned was a reminder of why it's really important to use earn-outs. And we certainly were -- kind of carry that discipline forward as we think about the business and what we're doing. And secondarily, on auto info [ph]. Auto info [ph], God bless them, that transaction does not have an earn-out in it. So that's not a transaction that we would have done. And we certainly wish those acquirers the best in managing that risk, because they certainly have assumed more risk than we would have had the appetite to have assumed, given our experience at DBA.

[Adam Wyden:]

But let me tell you something. When an investment banker at Lehman Brothers goes -- or Goldman Sachs goes to Morgan Stanley, he doesn't get paid a multiple of his book of business, because they realize that the guy walks in and out the door. He gets stock options, maybe he gets a guaranty, but when you're buying a business where your assets walk in and out the door every day, you're at a greater risk. And so my question is, have you really -- it's my belief that the cash component of these transactions should go down because things happen, s*** happens. So what I'm getting at is, why not focus on the organic growth, try and onboard people, make a greater percentage of this stock when your stock is fairly valued, buy back the stock, get the stock to a valuation where you're getting some value for the asset you're creating, and then use the stock as a currency to bring in partners? Because the reality is these guys -- it's not abundantly clear that people are paying 5x and 6x EBITDA in cash for agent stations, and so -- you own 35% of this thing. I think you know better than I that you want to create some value here. And every single one these transactions, where the equity goes to 0, sets you back 2 years. And so I don't -- I want to move forward, not backwards.

[Bohn H. Crain:]

Again, I think it's -- part of it depends on your horizon. I think, certainly, DBA was painful, and I'm sorry it continues to become -- it remains part of the dialogue, but fair enough. But I believe...

[Adam Wyden:]

Listen, you're saying that you're lapping DBA. So presuming you don't do any acquisitions going forward and you refinance your debt, you're going to make earnings and, hopefully, the market will reward you for good behavior.

[Bohn H. Crain:]

Yes, well, we're going to continue to execute the multi-pronged strategy and move forward opportunistically on all the aspects of the business that we discussed. But we certainly appreciate and respect your views.

[Operator:]

I'd now like to turn the floor back to management for any closing comments.

[Bohn H. Crain:]

All right. Thank you. Let me close by saying that we remain very excited with our progress and prospects here at Radiant. It's important to look at where we have come to in the context of where we began. We launched this business in January of 2006 with $5 million of equity. We have effectively taken no more equity dollars, and I think we have done a very good job of being stewards of our equity dollars. I personally am the largest shareholder in Radiant. Nobody has more to gain or lose in the success of Radiant than I do personally, and it has my complete and undivided attention to execute the strategy that, we believe, will ultimately continue to deliver value over the long term. We do remain patiently persistent in the execution of this strategy. And we believe that it will continue to deliver value for our shareholders, our operating partners and the end customers that we serve. Thanks for listening and your support of Radiant Logistics.

[Operator:]

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.