Radiant Logistics, Inc.
Q4 2015 Earnings Call Transcript

Published: 29 Sep 2015

[Operator:]

Greetings. This afternoon, Bohn Crain, Radiant Logistics’ Founder and CEO and Radiant’s Chief Financial Officer, Todd Macomber, will provide an update on the company’s result for its fiscal fourth quarter and year ended June 30 2015. Following their comments, we will open the call up 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. With that being said, I’d now like to turn the task – I'd now like to turn the call over to Radiant’s Founder and CEO, Bohn Crain. Thank you, Mr. Crain. You may begin.

[Bohn Crain:]

Thank you. Good afternoon, everyone and thank you for joining in on today’s call. It’s been an interesting market out there to say the least, but we are very pleased to report what our record results for the quarter ended June 30, 2015 and our continuing trend of double-digit earnings growth. We posted revenues of $196.2 million, up $94 million and 91.9%. Net revenues of $42.7 million, up $14.9 million and 53.7%, and adjusted EBITDA of $6.5 million, up 2.1 million and 46.8% over the comparable prior year period. We were also very productive on the acquisition front this quarter with our acquisition of Wheels, Service By Air and Highways and Skyways. As a reminder, these quarterly results include only 22 days of contribution of our acquisition of Service By Air and only one month’s contribution from Highways and Skyways. On a combined basis we expect the SBA and Highways and Skyways acquisitions to contribute approximately $4.5 million in incremental run rate EBITDA and that’s including the benefit of an estimated $1 million in cost synergies in connection with the wind-down of SBA’s legacy back-office operations. In addition, these results exclude any benefit from an estimated $1 million in annual cost synergies we anticipate in connection with the Wheels facilities consolidation in Toronto which we completed this July. We also continue to make good progress on the integration front. In Toronto, we completed our facilities consolidation combining three separate Wheels operations under one roof. In New York, we are combining our company owned Service By Air and Radiant operations. In Los Angeles, we are combining our company owned Wheels, SBA and Radiant operations, and in Cincinnati, we are combining our company owned Wheels and Highways and Skyways operations. Each integration represents an opportunity for us to unlock both revenue and cost synergies across the network as we combine the strengths of each respective group. In addition, as we continue to grow and scale the business we are creating density in our trade lanes which creates opportunities for us to leverage the On Time network to more efficiently source and manage our transportation capacity. We expect to continue to grow our business organically and by completing acquisitions of other companies that are complementary geographically and also providing logistics services that would expand our toolbox. Our organic growth strategy will continue to focus on strengthening existing and expanding new customer relationships, while leveraging the benefit of our new truck brokerage and intermodal service offerings, while continuing our efforts on the organic build-out of our network of strategic operating partners. With the benefit of our recent equity raise, we also believe we are very well positioned to continue our disciplined approach of acquiring non-asset based businesses. We have very low leverage on our balance sheet at this point and continue to search for acquisition candidates that bring critical mass from a geographic standpoint, purchasing power and/or complementary service offerings to the current platform. This is the same multi-pronged growth strategy that has consistently delivered profitable growth over the past 10 years and we remain very bullish on the growth platform that we've created here at Radiant and the prospects for our scalable non-asset based business model moving forward. Our updated guidance for our fiscal year ended June 30, '16 remains in line with our prior projections. Excluding the impact of additional acquisitions and other non-recurring items, we are projecting adjusted EBITDA in the range of $30 million to $34 million on approximately $900 million to $950 million in revenues, and on a net revenue basis that’s a $195 million to $205 million in net revenues. This equates to adjusted net income available to common shareholders in the range of $12 million to $14.7 million, or $0.24 to $0.30 per basic and fully diluted share and $0.24 to $0.29 per fully diluted share. I'll now turn it over to Todd for more a detail review of the numbers.

[Todd Macomber:]

Thanks, Bohn, and good 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, 2015. The quarterly net income results. For the three months ended June 30, 2015, we reported net income attributable to common shareholders of $1,667,000 on $196.2 million of revenues, or $0.04 per basic and fully diluted share, including a $2,772,000 gain on change in continued consideration, $746,000 in acquisition related cost, $374,000 in transition and lease termination cost and approximately $239,000 in legal cost we anticipate will be non-recurring. For the three months ended June 30, 2014, we reported net income attributable to common stock holders of $1,604,000 on $102.3 million of revenues, or $0.05 per basic and $0.04 per fully diluted share. This represents an increase of approximately $64,000 or about 4% over the comparable prior year period. Our quarterly adjusted net income. For the three months ended June 30, 2015, we reported adjusted net income attributable to common stock holders of $2,115,000, or $0.05 per basic and fully diluted share. For the three months ended June 30, 2014, we reported adjusted net income attributable to common shareholders of $2,198,000, or $0.06 per basic and fully diluted share. This represents a decrease of about $83,000 or approximately 3.8%. For the quarterly adjusted EBITDA, we reported EBITDA of $6,545,000 for the three months ended June 30, 2015, compared to adjusted EBITDA of $4,460,000 for the three months ended June 30, 2014. This represents an increase of $2,085,000 or approximately 46.8%. For the year end, the 12 months net income results for the 12 months ended June 30, 2015, we reported net income attributable to common stock holders of $3,829,000 on $502.7 million of revenues, or $0.11 per basic and $0.10 per fully diluted share, which included a $3.9 million gain on change in contingent consideration and it was offset by little over $2 million – to be about $2,017,000 in acquisition related cost, an additional $770,000 in transition and lease termination cost and approximately $601,000 in legal cost that we anticipated will be non-recurring. For the 12 months ended June 30, 2014, we reported net income attributable to common stock holders of $4,027,000 on $349.1 million of revenues, or $0.12 per basic and $0.11 per fully diluted share which included a gain of $2,041,000 million on change in contingent consideration. This represents a decrease of approximately $198,000 or about 4.9% over the comparable prior year period. For 12 months adjusted net income - the 12 months – for the 12 months ended June 30, 2015, we reported adjusted net income attributable to common stock holders of $6,825,000, or $0.19 per basic and $0.18 per fully diluted share. For the 12 months ended June 30, 2014, we reported adjusted net income attributable to common shareholders of $7,298,000, or $0.22 per basic and $0.21 per fully diluted share. This represents a decrease of approximately $472,000 or approximately 6.5%. Lastly, in reviewing adjusted EBITDA, we reported adjusted EBITDA of $17,268,000 for the 12 months ended June 30, 2015, compared to adjusted EBITDA of $14,777,000 for the 12 months ended June 30, 2014. This represents an increase of $2,491,000 or approximately 16.9% over the comparable prior period. With that, I will turn the call back over to our moderator to facilitate any Q&A. Moderator, are you on the line?

[Operator:]

Yes. I am here.

[Todd Macomber:]

Okay. We pasted back to you for Q&A.

[Operator:]

Pardon me. [Operator Instructions] Our first question comes from the line of Kevin Sterling at BB&T. Mr. Sterling, please proceed with your question.

[Kevin Sterling:]

Thank you. Good afternoon, Bohn and Todd.

[Bohn Crain:]

Good afternoon.

[Todd Macomber:]

Good afternoon.

[Kevin Sterling:]

Congratulations on a nice quarter. Let me start, there seems to be – you could just see it in your stock price today, you know, the market in general, and the freight environment. But there seems to be a lot of angst and uncertainty regarding the freight market and environment in general. And Bohn you've been in this business for 10 plus years at Radiant, can you maybe tell us about '08, '09, the financial crisis, the great recession whatever you want to call it and how your model performed during that time?

[Bohn Crain:]

Sure. Thanks, Kevin. I guess I'll start by saying we're kind of the – proverbial same guys executing the same plan as we were three weeks ago. Things are on track from our standpoint in terms of the overall strategy. We're not market prognosticators and we can't sit here and tell you where the market is going or not going. But what I can tell you based upon our prior track record is we're executing a model and a strategy where historically we've demonstrated that its performed well even in a down market and you are alluding to 2008, 2009 environment, we grew right through that cycle with our disciplined approach. Unfortunately I think we've been caught up in some negative momentum by some other folks in the peer group who may have veered off the path so to speak. But we continue to believe we're in the right place at the right time with the right value proposition. We're still executing off the same playbook we started with back in 2006 when we started the business. So it’s fair to say we're not particularly happy with our stock prices performing in this market environment. But with that said, we're pretty proud of our results notwithstanding what our stock price is doing today.

[Kevin Sterling:]

Okay. Thank you, Bohn. But like you said, it’s fair to say even in '08, '09 when the environment was probably lot worse you were still able to grow through that, I think is what I’m hearing you say?

[Bohn Crain:]

Absolutely. We historically delivered revenue and growth rates up in the 30% and 40% range for revenue in EBITDA including that cycle. So one of the - I am not sure the market - that underlying operation statistics supports what's going on in the marketplace right now and we're just continuing to execute the plan and hopefully the market will settle down here a little bit and we'll be recognized for what we are doing.

[Kevin Sterling:]

Yes. I think that’s great and a strong way to go. So let me ask you, you touched on your acquisition strategy and as you noted there has been some companies that changed their plan or maybe changed their stripes a little bit. But your acquisition strategy has always been pretty consistent and so I assume you'll keep that same game plan and roadmap and not deviate from that? Is that right as you think about your future and your strategy if you're going to stick to your knitting?

[Bohn Crain:]

Yes, absolutely, I mean our core business remains in the free porting space, looking at continuing to do things that brings the value back to the network, acquiring additional - attracting additional agent stations to the network to help fuel organic growth and then on the acquisition front providing conversions of existing agent stations that want exit strategies providing exit strategies for agent stations and competitor networks who see value in our platform and then we now have the kind of this broader platform to pursue our M&A. So historically we only had the freight forwarding platform, but we also now have opportunities to do things in the brokerage and intermodal space, both in the US as well as Canada based upon Wheels infrastructure and their capabilities in Canada. So I think our sweet spot continues to be the smaller tuck in type acquisitions where we can value and structure these transactions in line with our historical approach and that was - and we've really already seen that, right. So we acquired Wheels which kind of broadened what we were doing, but we've been very quickly reverted back to the core forwarding space acquiring Service By Air the network and their long standing agent station in Cincinnati, the Highways to Skyways group. And that’s really been our bread and butter, right. So the quick reminder we acquired Airgroup and we acquired Adcom and we acquired Distribution By Air, each agent based freight forwarding networks where we are able to centralize the back-office infrastructure and streamline things and we're kind of back at that again with our recent acquisition of Service By Air.

[Kevin Sterling:]

No it’s great. And as we think about too '08, '09, you are much bigger now then you were back then, as you mentioned you have more product to sell. With this volatility notwithstanding your stock price or with the kind of freight volatility we are seeing and in some of that angst that I mentioned are you seeing more agents come to you wanting to be part of a bigger stable platform, does that help create some M&A opportunities or maybe some organic growth through agents just knocking on your door?

[Bohn Crain:]

I think it will, I mean again we've kind of seen this historically and that one of the byproducts of uncertainty is that it can act as a catalyst for sellers, right. So as if in fact - if the concerns come home so to speak, I think that will act as a catalyst and bring more sellers to the table and we couldn’t - we've never been in a better relative financial strength with lower leverage. We've never been in a better position to take advantage of those opportunities then we are today. And just kind of quickly dimensionalize that let me take the opportunity to do that. So we - quick review of our capital structure, with the equity raise we basically paid off all of the amounts outstanding under our senior facility. So we have roughly $50 million of debt that’s the sub debt with Alcentra and Triangle and the Canadian debt with IPD, as terms of our core debt of roughly that $50 million. But we're in a run rate of $30 million of EBITDA, now $30 million plus. That - we're barely over one turn and if we think about kind of our traditional acquisition strategy playing plus or minus five times, trailing 12 months EBITDA and using our earn out structures, we could - we believe we could on board an incremental $20 million of EBITDA into the platform within the existing capital structure that we currently have. And again as a quick reminder, we have a $65 million ABL facility in place with basically nothing drawn on that. So we have AR today to support $65 million in oustandings with nothing drawn on it. And that’s before considering the benefit of the incremental AR of the companies that we would acquire in. So we think we are as excited as ever about kind of where we sit in the market place and the opportunities ahead of us.

[Kevin Sterling:]

Great. And then on in your $30 million and $34 million of EBITDA for fiscal year '16 that really doesn’t include many of the cost synergies, is that right?

[Bohn Crain:]

Correct. The – that $30 million includes the $1 million of cost synergies in the Toronto facilities consolidation, but that there is all kinds of operational synergies hopefully as we are able to further leverage the on time networks and more effectively access capacity none of those types of opportunities are in the numbers.

[Kevin Sterling:]

I got you. Great. Well thank you Bohn, so much for your time. Congratulations on nice a quarter and good news is the Seahawks taking their first win yesterday.

[Bohn Crain:]

Well, I appreciate the glass half full approach.

[Kevin Sterling:]

Take care.

[Operator:]

Our next question comes from the line of Jason Seidl at Cowen and Company. Please proceed with your question.

[Matthew Elkott:]

Good afternoon. This actually Matt Elkott for Jason. Hi, Bohn, hi, Todd.

[Bohn Crain:]

Hi, Matt.

[Todd Macomber:]

Hi, Matt.

[Matthew Elkott:]

Can you guys talk about some of the assumptions built into your revenue guidance, you know, macro fuel prices and any potential revenue management associated with the recent acquisitions?

[Bohn Crain:]

We had not - I think the best way that I can respond to that as we haven’t baked a lot of up side cross sell opportunities into those numbers. We really took legacy historical numbers and bumped them a couple of percentage points in terms of the modeling that we brought forward into the guidance. So we would like to think that there is some upside in the numbers. We always got the question so we decided to go ahead and try to be a little more pro active in this particular release and guidance was the first time we really put in print as part of the guidance and not only the revenue but the net revenue. So you'll see kind of the corresponding net revenue that runs along side with the guidance and we do that math I think you'll see the combined gross margin percentage of the group now is projected to be I want to say its 21.5% is about…

[Todd Macomber:]

Yes, 21.6%.

[Matthew Elkott:]

Which – staying on the net revenue margin of 21.6 implied in your guidance, it’s slightly better than our assumption, I think it’s slightly better than the implied street expectations as well. Bohn, is this achievable in if current market conditions remain the same over the next year or are you assuming any type of change either up or down in freight demand?

[Bohn Crain:]

I think that we - I think those percentages are our expectation based upon today's market environment and what would change it in my mind would be more a function of mix, right, whether our domestic forwarding which carries a higher gross margin percentage grows faster or slower than the brokerage business which we would expect to carry a lower margin.

[Matthew Elkott:]

Okay. And if we - if demand doesn’t fall off the cliff, if potentially freight demand in general potentially even improves a bit and then we are looking at capacity starting to tighten gradually over the next couple of years because of new regulations coming on line, ELD and speed limiters , in your brokerage business do you think that would give you opportunities for gross margin expansion in that business?

[Bohn Crain:]

Perhaps, again that’s ultimately beyond my pay grade, right, what I would say is when I look at the other agent based freight forwarding networks that are out there competing to support all of these other agent based stations out across North America, I would say we are in a better relative position to deal with market forces than any of our competitors, because we have our own proprietary dedicated line haul network and On Time, and because we have the brokerage and intermodal capabilities that comes to us through Wheels, none of our other direct competitors have those capabilities as part of their organization. So I think this could create a real opportunity for us to further differentiate ourselves in the market place and attracting these entrepreneurs and their books of business to our platform.

[Matthew Elkott:]

Got you. That’s very helpful. And then just quickly, what are the tax rate assumptions and the share count…

[Bohn Crain:]

The magic rate is 36%.

[Matthew Elkott:]

36%. And what…

[Bohn Crain:]

And that’s because of the relative contribution of Canada which carries a lower effective tax rate.

[Matthew Elkott:]

Okay. Great. Gentlemen, thank you very much.

[Bohn Crain:]

All right, thank you.

[Todd Macomber:]

Sure.

[Operator:]

Our next question comes from the line of Jeff Coffman at Buckingham Research [ph].

[Unidentified Analyst:]

Hey, guys.

[Bohn Crain:]

Hey, Jeff.

[Todd Macomber:]

Hi, Jeff.

[Unidentified Analyst:]

Good, good. May we live in interesting times?

[Bohn Crain:]

Yes. What I'd like to say I think the bad day is you stop drinking.

[Unidentified Analyst:]

That is true and like the movie Inference [ph] So I apologize as they were about 20 questions asked earlier that kind of covered most of what I wanted to ask. But I was going airport security when you answered the question about what was baked into your revenue guidance. So could you review that again and then I have a question for Todd?

[Bohn Crain:]

I said on the revenue guidance we really hadn’t baked in the revenue synergies between the two groups we had taken historical performance and bump it up a couple of percentage points.

[Unidentified Analyst:]

Okay. So that’s baked in but in your EBITDA guidance I think you comments were you have the dry powder to theoretically acquire about 20 million in EBITDA you are guiding…

[Bohn Crain:]

Actually I am sorry, if I missed your question all together, but none…

[Unidentified Analyst:]

No, no…

[Bohn Crain:]

None of that is in the analysis.

[Unidentified Analyst:]

Okay. All right. That’s what I thought. Todd, kind of ask the same question a different way, can you talk about given all the acquisitions and the integrations are there additional capital needs say whether its an IT systems or something like that that needs to be invested in?

[Todd Macomber:]

Yes. we are actively upgrading our SAP to the latest and greatest and we anticipate that’s going to occur in the not too distance future. It’s a big endeavor to bring it up to where we want to bring it and then the next piece of that is we're going to look at [indiscernible] management system and bring that along too. So currently right now we are spending some money in the development of the SAP system.

[Unidentified Analyst:]

All right. So

[Bohn Crain:]

And I'll just add for a second. So, as a reminder because folks on the call may not be familiar with ins and out. So when we first acquired our initial platform company Aigroup back in 2006 they were already on SAP. So we've been an SAP house really since the beginning of time. As Todd was alluding as we are in the process of upgrading basically our prior version of SAP to a newer version, we expect that to be completed here over the next month or so and once that is in place we'll kind of the new kind of latest and greatest version of SAP that we can then begin to map the various EMSs into, and again as a reminder in our freight forwarding world really on one side of processes, our third party CMS whilst cargo wise which is integrated to SAP and then overall the Wheel side of things they have a few different systems mapped into a few different accounting platform. So we think there is going to be some cost synergy opportunities on the IP side enter Wheels and then the ultimate question I think we might have hit on this on one of our prior calls as, we think about our IT road map will there ultimately be a singular PMS [ph] to support those freight forwarding and brokerage of where we end up with few slightly unique PMS environments to support each of the different business groups. The jury is still out on that, although we are certainly hopfule that SAP can be a singular solution. On a CMS side to level ultimately maximize our opportunities both for revenue synergies and cost synergies if we can get there. We kind of end in furtherance of these additions as we are spending money in IT, if I were modeling it on a cash flow basis I would estimate we're going to stand plus or minus $2 million a year funding our IT.

[Unidentified Analyst:]

All right. So let me tie this altogether and I [indiscernible] Toddy back in. So if I look at our pro forma EBITDA your pro forma earnings guidance 2016 excluding any of the acquisitions what kind of pro forma free cash flow are we modeling for 2016 and then you talked about the debt you still have about but Todd can you remind us how much dry powder you have in terms of cash in the bank right now lines of credit available in addition to the free cash?

[Todd Macomber:]

Sure. Well, I think cash flow is going to be close to the EBITDA but as far as the dry powder that we have and Bohn alluded to it earlier, I mean right now we have $65 million facility of Bank of America and there is really nothing drawing on that so we can go out and borrow that money and of course when we borrow that money we are acquisitions and this is acquisitions comes additional AR which in term that could turn around and then further upsize the credit facility. So I think there is tremendous dry powder available for going forward to make these acquisitions.

[Bohn Crain:]

Yes. and Jeff let me I'll hit it one more time as well, so roughly $50 million in what we would define as debt that’s to $25 million of sub debt and there is another there is the Canadian debt we refer to as the ITV debt that $69 million Canadian converting that over that’s roughly US$45 million or US$50 million of debt outstanding where I think going one of your questions that we have roughly kind of $5 million of cash on our balance sheet. So I think net debt number would be more like $45 million of net debt and then if we're looking at enterprise value type analysis although [indiscernible] doesn’t meet the definition of debt I would also call out our 21 million of [indiscernible] in our balance sheet.

[Unidentified Analyst:]

All right. well, guys congratulations and thank you.

[Bohn Crain:]

All right.

[Bohn Crain:]

Thanks, Jeff.

[Bohn Crain:]

Thanks. Jeff.

[Operator:]

Our next question comes from the line of Marco Rodriguez at Stonegate Capital Markets. Mr. Rodriguez, please with your question.

[Marco Rodriguez:]

Good afternoon, guys. Thanks for taking my questions. A lot of them are actually already being asked and answered, but just Bohn's I wonder if you could may be provide us with a little bit of an update on the cross selling efforts I mean, you are having with Wheels?

[Bohn Crain:]

Sure. Absolutely. As I am actually leaving here to get on an airplane to fly to on Toronto because we've got all of our regional VPs leading with me to go visit and tour the facilities up in Toronto as and again as a reminder for everybody we really when we acquired Wheels we ended up with a new competency in Canada historically we didn’t have that’s based out of Toronto as well our new truck brokerage and intermodal capability that’s serviced principally out of Chicago so as others several different ways that we're leverage the Wheels organization back across the group that I started initially with a series of regional meetings where we brought our [indiscernible] each regions and then meet the folks from Canada now we're kind of going back and doing the [indiscernible] of that with our regional VPs up in Toronto specifically here in this week. But its been interesting we've had some of our freight forwarding operated locations begin to sell intermodal which was our whole new revenue stream for them so we started to see those types of things start to [indiscernible] which is been exciting we also have seen a number of our stations begin to use real sub [indiscernible] capabilities out of Chicago we've had a handful of new pieces of business come to us from existing customers in the US we've had Canadian business that were now servicing up in Canada so all of those are very positive and then other thing I want to emphasize because I think its really interesting area for us and that is as we're starting to build density in our [indiscernible] these consolidations of the various groups under roof where we can g3et mind share across those effective teams we're also getting all the freight on one dock which allows us to create density in our tabling which I think over time is going to prove to be a real competitive differentiator for us in terms of how we think about sourcing transportation capacity and a in the expected tightening market that’s going to be very helpful for us. But the Wheels organization in general its been very positive for the group and just as on other real kind of practical example is in Los Angles [ph] specifically I don’t know if you will remember but Wheels had a couple of different business units one of them was called MSM Wheels MSM in Los Angeles and we are in the process of consolidating those three facilities those three groups in the same facility in Los Angeles everybody lease was expiring as of the end of this year so come January 1 we'll have everybody under one roof and that [indiscernible] emphasize the point allows us to begin to consolidate in that’s [indiscernible] rate volumes along with our own freight volumes off the [indiscernible]

[Marco Rodriguez:]

Got it. Thanks. And then I was just wondering here [indiscernible] with the current debt outstanding on the balance sheet of 50 million if I heard you guys correctly, can you remind us what's the blended rate there right now?

[Bohn Crain:]

Yes. IPD debt is like 6.65…

[Marco Rodriguez:]

665…

[Bohn Crain:]

And the sub debt is on a metrics that’s sets down based upon all in leverage I think it will step down at 9.5% I think that’s the kind of lowest price point available to us on that structure and then your next question will be when can we pay that off that sub debt had a I think it was one year no [indiscernible] 2% penalty in year two and then no pre payment penalties after that. And what [indiscernible] the exercise their preferred had a 5 year no call but after a year five and that particular transaction was done I think in the fall of 13 so after that five year horizon is up that’s another thing that we're going to look at as we under the banner of optimizing our capital structure.

[Marco Rodriguez:]

Got you. And last quick question. And I'll jump back in the queue, just kind of modeling type question, given that you in Q4 results you only had about a month of number from SBA an Highways how should we kind of be thinking about the run rate as far as your operating structure is concerned the age commissions personal cost and SG&A?

[Bohn Crain:]

We tried in the press release we tried to at least give folks a few data points to kind of work through that I think that financial gearing through the quarter are kind of any line but for we just didn’t have the magnitude of contribution from Wheels excuse me from Wheels [ph] from SBA and Highways and Skyways and we identified the run rate number for those groups to be 4.5 million so those numbers only include one twelve of 4.5 million so you would need to another 11, 12 of that 4.5 plus the extra million dollars in the facilities cost savings in Toronto that will start to realize in this next reported quarter and that should give up in the 30 million range when you do that.

[Marco Rodriguez:]

Got it. Thanks a lot of guys.

[Bohn Crain:]

All right.

[Todd Macomber:]

Sure.

[Operator:]

Our next question comes from the line of [indiscernible] Mark, please proceed with your question.

[Unidentified Analyst:]

Thanks. Good afternoon, guys. Lot of the questions have been asked and answered but maybe two things one Toddy you have an actual good share count now post deal [indiscernible] all working at the same number?

[Todd Macomber:]

Yes. [Indiscernible]

[Unidentified Analyst:]

Okay. And then lastly, you [indiscernible] that up, maybe Bohn you could talk a little bit about organic versus acquisition growth I know obviously acquisitions are big part of the story here just given the opportunity that you've talked about the [indiscernible] but can you maybe talk a little bit about organic growth and you talked some of the synergies you are starting to see but are you kind of stores or systems that you've had for a better [indiscernible] for a over year well call it season [ph] growth obviously I am guessing its positive but if you have any metrics or any kind of any thoughts around the type of growth you are seeing from stores that you had under your management for a period of time that would be helpful?

[Todd Macomber:]

Yes. I think in the – an overall first thing towards [indiscernible] let me answer that question…

[Bohn Crain:]

Shares outsanding after the offering were 48 million about 725,000.

[Todd Macomber:]

So 48 million 725 is this outstanding share count number and then on to the organic versus acquisitions as a general rule of thumb we have historically thought about same store growth as being of GDP type story in the aggregate we certainly have some of our more entrepreneurial aggressive stations out there that are growing double-digits on their own I like to talk of hunters and farmers and so we've got the hunters out there have the tools and they are putting points on the board we also have farmers who are as of aggressive and their growth is not as strong as the guys who are out there putting the new tools to work at the same time as has historically being the case a big piece of our organic growth strategy and results have come from our ability to attract agent stations that have joined the network and not through acquisitions they just effectively [indiscernible] and come join our network historically we've had good success along that systematic we expect that to continue again based upon the robust platform the differentiated platform that we have available to us now. So if I were I am choose my words carefully [indiscernible] call it plus or minus 6% on organic growth basis [indiscernible] combination of same store and the new store of growth is what I would and expecting us to do for what we are working towards and then we’ll be complementing that with acquisitions as we go.

[Unidentified Analyst:]

Great. And last question obviously as [indiscernible] out of it [indiscernible] for 30 year change for 29 or something like that, obviously you use capital as to de lever and enable additional acquisitions but just give the magnitud3e of the move any talks about for the buy back in place?

[Todd Macomber:]

Its certainly not beyond the round of possibilities at some point there is definitely [indiscernible] but we actually have a history of doing stock buy backs and so that’s ultimately we think that there is higher and better uses of our capital executing this in our strategy and that this what I hopeful is to be a short term phenomenon and kind of market disconnect with our what we are doing in our relative stock value that this will be a short term dynamics and we're going to continue to execute our plan but ultimately if it turn if we ultimately conclude that on a risk adjusted basis to better way to deploy our capital is through a stock buy back we'll be doing it.

[Unidentified Analyst:]

Great. Thanks, guys. I appreciate it.

[Todd Macomber:]

All right. Thank you.

[Bohn Crain:]

Thanks.

[Operator:]

Our next question comes from the line of [indiscernible] Bank of America. Brian, please proceed with your question.

[Unidentified Analyst:]

Yes. Hey, Bohn, hey, Todd. I just wanted to say congratulations on your strong, your very strong year and continued long-term impressive results is very exciting, it’s great to see. And had two questions for you, they are kind of inter related, but I am just curios what the strong US dollar how that has impacted your business. And then two is thinking of that in international opportunities can you provide an update on your efforts to open or acquire stations in Asia?

[Bohn Crain:]

Yes. good question. So I'll take the easier, I'll take the easier of the two first and that is although we certainly dabbled at or explored and looked at a few transactions abroad over the years our focus at this point is really on North America and deploying our capital acquiring in businesses and customer relationships that are really North America centric; for me right now I think our best approach is a very focused approach on continuing to build density, so a lot of times I’ll get questions from folks and they’ll kind of ask the question where are your locations and where don’t you have locations yet thinking that might be some kind of road map of where they might expect us to do M&A. and I try to reorient that question and reorient their thinking because at this point it’s not so much us trying to acquire stuff where we are not, it’s trying to acquire more right where we are, right. So if you think about it we have company owned stores today in Seattle, Portland, Los Angeles, Phoenix, Dallas, Loreto, Atlanta, Philly, Newark, JFK, Minneapolis, Toronto Detroit, Chicago, each of those company owned locations represents a platform to do more acquisitions in those markets and each time we do that company we acquire is going to have redundant back office facilities, infrastructures, people and as we can acquire those guys in, it will provide more density in our trade links. So as trying to continue to kind of stay true to this concept of scalable business leveraging the infrastructure, leveraging the network, pushing more freight across our platform, so that’s how we are thinking about M&As. And then your second question was the US dollar, so I think at a high level exports are going to be going down, imports will be coming up from Asia, so I would expect to see some growth there and I think we'll see some shift in what's going on cross border with Canada, with a relative exchange rate between Canada and US with more and more manufacturing in Canada coming back, so more recently trade flows have been heading north, I think we'll see a reversal of that and over time here see more exports out of Canada as the US will be accessing some of those lower relatively cost goods in Canada.

[Unidentified Analyst:]

That’s great answers and I appreciate them. Thank you very much.

[Bohn Crain:]

All right. Thank you.

[Operator:]

I would now like to call – I would now like to turn the call back over to our management for closing remarks.

[Bohn Crain:]

Alright, 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.