Radiant Logistics, Inc.: Third-party logistics company providing multi-modal transportation and logistics services
At Perritt Capital Management, we take focused positions in companies where we have high conviction of their success; companies that are out of the mainstream of small cap investing. To highlight our process, we are pleased to present the fifth installment in our new series “Marvelous Microcaps – Big Ideas on Small Companies”. This series profiles companies that we believe have a niche in their existing markets or are launching a product that could disrupt their marketplace.
Radiant Logistics, Inc. (RLGT) is a third-party logistics company providing multi-modal transportation and logistics services primarily in the United States and Canada. They offer domestic and international air and ocean freight forwarding services, freight brokerage services and other value-added supply chain services. Bohn Crain founded the company in 2005 to execute a consolidation strategy in the transportation and logistics sector. Bohn has extensive experience at Schneider Logistics, Inc., CSX Corporation, and other similar companies. In a world with a volatile shipping environment, Radiant provides best-of-breed services to their customers and partners.
Radiant has consistently focused on bringing value to the agent-based forwarding community. They enable their strategic operating partners to be equity owners in the business. They offer unique succession planning and liquidity opportunities for station owners. Their network participants benefit from RLGT’s increased purchasing power, expanding network of global trading partners and their ongoing investment in technology. Through their shipment tracking tools customers can know exactly where their products are at any moment.
WHY WE OWN: THE PERRITT ADVANTAGE
Radiant recently reported second quarter earnings that were stellar. Their industry has been hit with tight capacity and strong demand. New capacity is limited as labor shortages and tight supply chains keep new capacity from coming online. RLGT has had a history of growing both organically and by making acquisitions. They recently acquired Navegate which helps it expand its digital platform and manage international, cross border and domestic freight delivery. Their services include customs brokerage, international ocean and air freight forwarding, domestic truck brokerage, drayage and transload services. Navegate’s proprietary global trade management software platform has been recognized as the “Top 50 Logistics Companies in North America” * over the last several years.
Radiant’s balance sheet is under levered allowing them to make more acquisitions and buy back their stock. In the second quarter alone, they repurchased $4.6m of stock. RLGT plans to use roughly 50% of its free cash flow to repurchase more stock and make additional tuck-in acquisitions. Their stock remains cheap relative to their peers, trading at 4x AEBITDA. Radiant has a strong management team and slim cost structure will help enable them to possibly grow revenue and increase margins. In addition, some of their hard-hit verticals, such as trade shows and retail store fixturing are returning to normal allowing further growth.
Perritt. Marvelous Microcaps – Big Ideas on Small Companies.