Release Date: September 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sequential improvement in financial results for the fourth fiscal quarter compared to the third fiscal quarter.
- Net income increased by over 750%, adjusted net income up 94.4%, and adjusted EBITDA up 75% in the fourth fiscal quarter.
- Generated $31.2 million in adjusted EBITDA and $17.3 million in cash from operations for the fiscal year ended June 30, 2024.
- Strong balance sheet with approximately $25 million of cash on hand and nothing drawn on the $200 million credit facility.
- Completed five tuck-in acquisitions and deployed over $4 million in support of the stock buyback program.
Negative Points
- Year-over-year comparisons remain tough due to difficult freight markets.
- Net income for the 12 months ended June 30, 2024, decreased by approximately $12.9 million or 62.7% compared to the prior year.
- Adjusted net income for the 12 months ended June 30, 2024, decreased by approximately $16.7 million or 42.4% compared to the prior year.
- Adjusted EBITDA for the 12 months ended June 30, 2024, decreased by approximately $24.5 million or 44% compared to the prior year.
- Lack of a significant catalyst to drive substantial growth in the near term, with the company relying on incremental improvements and acquisitions.
Q & A Highlights
Q: Can you talk about the drivers of the outperformance in the June quarter?
A: Todd Macomber, CFO: It's hard to pinpoint specific factors, but we are seeing sequential growth in volume and pricing.
Q: What are you seeing in terms of peak season this year and any shifts in freight ahead of the potential Port Strike on October 1?
A: Bohn Crain, CEO: We did see some pull forward due to global events and potential tariffs. There's additional pressure on the West Coast, which is positive for us as ocean rates are up and capacity is tightening.
Q: Do you think there is a real probability of a port strike?
A: Bohn Crain, CEO: I wouldn't want to speculate, but we will support our customers with diversions and other solutions if it occurs.
Q: How do you see the market shaping up for fiscal year '25?
A: Bohn Crain, CEO: We believe the worst is behind us, and this quarter's performance is indicative of what to expect moving forward. We are also focusing on acquisitions to drive growth.
Q: How have seller expectations changed in the M&A market, and what targeted industry segments are you looking at?
A: Bohn Crain, CEO: Seller expectations haven't changed much, but the market is more stable now. We are looking for acquisitions that make sense in terms of valuation, structure, and fit, particularly within our own network.
Q: Can you discuss the impact of the USA contract and natural disasters like Hurricane Francine?
A: Bohn Crain, CEO: We expect to be one of the first called to support opportunities arising from natural disasters and other events.
Q: How much incremental EBITDA are the six acquisitions made in the last 12 months adding?
A: Todd Macomber, CFO: We haven't disclosed that information, but we are happy to keep our results private and share them as they occur.
Q: Why were operating partner commissions down more than revenues?
A: Bohn Crain, CEO: This is due to significant non-recurring project business in the previous year and the conversion of agency stations to company-owned stores.
Q: What is holding back the global economy from improving?
A: Bohn Crain, CEO: We need our customers to conduct more business and invest in hard freight. The economic engine needs to fire on more cylinders.
Q: What should we expect in the near term?
A: Bohn Crain, CEO: Business will move forward with slight upticks in volumes and revenue profiles, plus acquisitions until the global economy changes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
