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 12 months ended June 30, 2018. Following their comments, we will open up 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 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 Web-site 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.

Thanks Matt. Thank you and good afternoon everyone. Thank you for joining in on today's call. We are pleased to continue to build on our positive results from last quarter, having posted new records across all of our key financial metrics for the quarter ended June 30, 2018. We posted record revenues of $233.8 million, up $32 million or 15.9%; record net revenues of $59.3 million, up $9.5 million or 19%; record net income allocable to our common shareholders of $4.3 million, up $5.3 million; record adjusted net income allocable to common shareholders of $5.7 million, up $1.9 million or 50%; and adjusted EBITDA of $9.9 million, up $3 million or 43.5% over the comparable prior year period. In addition, we also set a new record in terms of our adjusted EBITDA margins, up 280 basis points to 16.7% from 13.9% over the comparable prior year period. While we continued to see anticipated margin pressure with our underlying asset-based carrier partners during the quarter, we also saw the benefit of our focused effort on organic growth, delivering double-digit revenue growth across all categories of our business, with forwarding revenues up $23.7 million or 16%, brokerage revenues up $7.1 million or 14%, and value-added services up $1.3 million or 44.6%. This ultimately translated to an incremental $9.5 million in net revenues over the comparable prior year period. As we have previously discussed, we remain most interested in growing our gross margin dollars and getting more of those dollars to the bottom line as we scale the business. In this regard, we were quite pleased to not only see the growth in our gross margin dollars, but also see the leverage in our back-office operations as reflected in our expanding EBITDA margins. On the technology front, we also continue to make meaningful…

Thank, 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, 2018. For the three months ended June 30, 2018, we reported net income attributable to common stockholders of $4,331,000 on $233.8 million of revenues, or $0.09 per basic and fully diluted share, which included a $1,101,000 gain on change in contingent consideration. 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 a loss of $0.02 per basic and fully diluted share, which included $1,638,000 expense on change in contingent consideration and $953,000 of transition and lease termination costs. This represents an increase of approximately $5,359,000 over the comparable prior year period. For the three months ended June 30, 2018, we reported adjusted net income attributable to common stockholders of $5,657,000. For the three months ended June 30, 2017, we reported adjusted net income attributable to common stockholders of $3,750,000. This represents an increase of approximately $1,907,000 or approximately 50.9%. Quarterly adjusted EBITDA results, we reported adjusted EBITDA of $9,917,000 for the three months ended June 30, 2018 compared to adjusted EBITDA of $6,915,000 for the three months ended June 30, 2017. This represents an increase of $3,002,000 or approximately 43.5%. Moving along to the 12 month numbers are as follows. For the 12 months ended June 30, 2018, we reported net income attributable to common stockholders of $8,142,000 on $842.4 million of revenues, or $0.17 per basic and $0.16 per fully diluted share, which included a $1,176,000 gain on change in contingent consideration. 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 included $2,260,000 of transition and lease termination costs and $3,431,000 of expense on change in contingent consideration. This represents an increase of approximately $5,326,000 over the comparable prior year period or up 189.1%. For the 12 months ended June 30, 2018, we reported adjusted net income attributable to common stockholders of $14,844,000. For 12 months ended June 30, 2017, we reported adjusted net income attributable to common stockholders of $17,185,000. This represents a decrease of approximately $2,341,000 or approximately 13.6%. For the adjusted EBITDA results, we reported adjusted EBITDA of $29,242,000 for the 12 months ended June 30, 2018 compared to adjusted EBITDA of $29,595,000 for the 12 months ended June 30, 2017. This represents a decrease of approximately $353,000 or approximately 1.2%. With that, I will turn the call back over to our moderator to facilitating the Q&A from our callers.

[Operator Instructions] Our first question is from Kevin Sterling from Seaport Global. Please go ahead.

Congrats on a great quarter. I haven't seen something, one this strong with you guys in quite some time, so awesome job.

Thanks. Yes, this is definitely new records across all categories, I think best in the history of the Company. And I guess just to emphasize items like change in contingent consideration, we back out when we get to our adjusted net income number and our adjusted EBITDA numbers. So, this $9.9 million number we're looking at is our proxy for cash earnings.

Yes. No, thank you, but I mean congrats, it just looks like strong across the board. So building upon it, Bohn, obviously you've got, I think this is the second quarter of double digit organic growth. How should we think about your organic growth going forward? Can we continue to see that type of level?

That's hard to say exactly what it will be obviously, but I think we should pause and reflect and emphasize that these numbers and year-over-year comparisons are almost exclusively organic growth, right. This isn't acquisitive growth. We've been investing in incremental sales resources and trying to really while we're looking for M&A deals, we like to think of ourselves in discipline and we're not going to chase deals that don't make sense. And in the meantime there's lots of other ways we could continue to grow our business, organic growth being one of them. And we've kind of been talking about it for a while and we're happy to finally be in a position where we can share the fruits of our labors on the organic growth story. And of course we're coming off of some softer comparable prior year quarters coming forward. And so, I don't want to leave anybody with the impression we're signing up to do $10 million of EBITDA each quarter yet, but at the same time I think we will continue to post very strong comparative year-over-year organic growth metrics.

I got you. And I don't want – I'm not going to pinpoint you on exact numbers, but if I hear you correctly, the foundation is there and you're just kind of continuing to build that, so to speak. Is that fair?

Yes, yes, that is fair, and along the way we continue to view ourselves as a growth platform. There's lots of different ways to grow and we're getting traction on the organic side of things. In the meantime, we continue to invest on the technology side of things, which ultimately is going to I think enable both incremental cost synergies and incremental cross-sell opportunities and allow us to engage with customers in a way that historically we may not have been able to from a technology standpoint. But all of this is going to kind of continue to feed the growth engine.

Great. And speaking of technology, if I remember correctly, you've been running kind of duplicative SBA back-office costs. Are you still doing that or have you been able to take some of those additional costs out?

We are still carrying a fair amount of that cost. They are still in these numbers. And so, we will, kind of the short version is, as we migrate the SBA agent stations to the SAP platform, that will allow us to unlock those cost synergies that's still plus or minus $1 million on the table unavailable to us.

Yes, so you still got like $1 million in cost you can take out. Do you have a timeframe when that might occur?

I think realistically it will start showing up in the next calendar year, calendar 2019.

Calendar 2019, okay, so not too far from that. And Bohn, just obviously reflecting on the quarter, here we are about the middle of September. How is your July and August and even early September shaped up, how is that looking compared to what we saw in the previous quarter? Are you seeing the trend similar?

I think it's positive on a comparative year-over-year basis, maybe not necessarily quite as hot as this quarter was.

Okay.

But still a net-net positive.

Yes, got you, okay. And if I'm not mistaken, at the end of this year you can call the preferred. Is that still the game plan?

We've never said that was the game plan per se, but you are correct that in December…

It is in the playbook.

Yes, it is in the playbook. So, in December of this year it is callable at our option. For those on the call who might not be as familiar, it's a $21 million redeemable perpetual preferred that we put up five years ago. It had a five-year no call. It's callable at par at our option any time after early December of 2018. I forget the exact date. And so, when and if we were to – and that preferred pays a 9.75% dividend, which means it's not tax-deductible. So, at this point in time, it kind of stands out as the most expensive strip in our capital structure, and should we take it out or retire it, that could drop depending what our incremental borrowing cost to replace it would be, which would be in the 3% to 4% range. And we're probably looking at $1.5 million to the bottom line in kind of incremental after-tax savings associated with that decision, should we call that play in the playbook.

Okay. And just last question here, I really appreciate all the color, absent acquisitions, and I know we don't know the timing of asset acquisitions, your free cash flow as I think about for your fiscal year 2019 should be quite robust. Am I missing anything as I think about that calculation? I'm not going to pin you down for a number because I know you don't like to give specific numbers.

No, no, I know. We're staying true to our non-asset-based business model and we should be picking off some good free cash flow from operations as we move forward. A piece of that will go to continue to fund our technology strategy, which we're committed to, but we should see some robust free cash flows coming off the business.

Okay. That's all I had. I really appreciate your time and congrats once again on a really solid quarter all around.

Our next question is from Jason Seidl from Cowen and Company. Please go ahead.

This is Adam on for Jason. Congrats on a great quarter. I guess the first question, from the intermodal, I know you guys do a lot of business with intermodal, and so I guess with the rails having the ability to raise prices and really being able to take advantage of that, do you guys think that you have the ability to kind of keep up with them and raise rates alongside with them or might you have some difficulties there?

So, good question. I think our customers value the work that we do for them. So, I would like to believe that we will be able to pass along incremental cost as we go. The intermodal business is one of the thinnest margin pieces of the business that we have to begin with. And so, we don't intend to do it for free or for practice. To the extent that we do see price increases, we would necessarily intend and expect to pass them along. And our experience has been as those things have happened that we have had success. If anything, Adam, just to kind of I guess circle back on it, typically our contracts are kind of annual period and we kind of come through and re-price. So we have recently kind of gone through that cycle and we have had success in passing those costs along as we go. So, I think we'll be in relatively good shape there. I would actually kind of flip it around a little bit and say, we are looking forward to better and better service from the rails. And just to kind of I guess level-set for folks a little bit, when truck prices were so low, there was a modality shift back to truck, and so we felt that pressure on the intermodal side of the business. As truck prices have come back up, there's a market dynamic for modality shift back to rail. That modality shift hasn't been kind of completely affected because of service levels within the rails. So, I think as rail service continues to improve, that should translate into improvement in our own operations at Clipper as rails have better capacity to take on more business that we would like to give them.

Got it. Great. Thank you. I guess a second question is, at the seven facilities that you mentioned that have already implemented the SAP system, what type of benefits are you seeing there, what types of changes kind of happen there once the system is implemented?

So, that's a good question. So, while we could really take you down into the weeds on that, I'll try to keep it at a high level. There are productivity gains associated within the back office in terms of how we deal with variances and how the estimated costs that we set up are ultimately resolved and the timing of that. It's enabling kind of an accelerated payment of our carrier partners. And in connection with kind of all this, we have a big I guess what I would characterize as a trading partner or carrier connectivity initiative where we're trying to do more and more with EDI, more and more with electronics to drive those improvements, and there's a lot more that we can do in terms of our customer portal, just kind of the robustness of the customer experience and the data and data warehousing and kind of business intelligence that we can render back to the customers who are shipping through the SAP platform. It's just kind of a dramatically improved experience for the end customer.

Great. I know the current tariffs have been front and center in the news recently, and even up until today including today. And so I was wondering if you guys have seen any effect, having the tariffs having the effects on your freight forwarding business? Is stuff pulled forward before the tariffs or if it's having an effect even now? I'd love to hear your thoughts on that.

I think the proverbial jury is still out on that. There is some question I think in front of the group about – so I guess your – again, for the benefit of people on the call, I think it's true that in anticipation of tariffs, shippers managing their supply chains tried to pull forward some of their shipments to avoid kind of being entangled in the new tariff regulations. Having said that, with kind of the ongoing peak kind of the question is, is it going to soft or are we going to have kind of, for lack of a better term, a double peak, the peak caused by accelerating to avoid the tariffs but just kind of the natural growth in the economy and what's going on, whether it's going to kind of continue through to be hot and heavy through peak season. I think it's too early for us to conclude on that, but we're not at all sure we're not going to have a peak here coming into the fall. So, that's a long way of saying, we may in fact have our traditional peak, plus we have the pop of the tariff as well.

Got it. And just maybe just a follow-up on that, is there anything else that you guys have seen with regards to any type of earlier peak? Maybe now that we've past Labor Day, has there been any kind of sign that maybe peak is going to be coming a little bit ahead of time this year or might be stronger than usual this year or it's still kind of too early to tell there?

That's a batting above my or fighting above my weight. I'm going to pass on that one and leave that to the economists.

Got it. Thank you very much for the time, guys. I really appreciate it.

Our next question is from [Mike Vermont from Numen Capital] [ph]. Please go ahead.

Just fantastic results there. When we look at the new business, I think this is finally, I guess we've been waiting few years for this, so we're seeing some real organic business wins out there and applaud the whole sales force there. What the pipeline look like? Normally, once it starts to move in our direction or the Company's direction, there's a lot more out there, and wins breed more wins. How does the pipeline look organically?

It's how I would say, it's reasonably robust, right. So, you can't ever kind of count your proverbial chickens until we have freight on the dock, but we feel pretty good about what our opportunities are and we expect some more good things into the future through the organic initiative. We've got a number of industry vertical guys onboard and they've certainly have helped. And so, we expect those resources to continue to do well and we expect to continue to expand in our vertical strategy and continue to build out our sales organization to continue to kind of feel the organic growth engine as we move forward. And I didn't necessarily highlighted in the press release, but we continue to have really good feedback based upon our operations in Canada and what's going on up there and kind of our bundling strategy of value-added warehousing with the transportation continuing that buildout. That's a repeat and apply process. In terms of that strategy, there seems to be some good horizon on that front as well. And so, we are as – I think we're as bullish as we've been in a long time and just trying not to get out over our skis, but obviously a $10 million quarter, a little pep in your step.

And then on the flipside of that, on the cost side, you've done a fantastic job I guess going through and you're running all the stations and the efficiency side here. More levers to pull there as well over the next year?

Absolutely. In any portfolio at any point in time there is somewhere, there is something that needs to be worked on, right. So, we're constantly engaged with our operators to support them and help them improve what they're doing. So, we're by no means anywhere close to done. I think that is the quintessential continuous improvement process and there's lots to be done. But I am really excited about SAP and SAP is the platform from which we can execute so many different revenue and cost synergy strategies that's simply more available to us at our legacy environment. So we're really just getting started in what some of those opportunities look like with SAP as the foundation.

Excellent. Two more quick ones. When you look out strategically over the next two years, I guess all the direct competitors, the agent-based networks are now owned by private equity, and there's a really large transaction I guess that happened a couple of weeks ago, and these have all been at significantly higher valuations than what we trade at. What do you think strategically over the next couple of years happens out there? We're the one standalone public company, everything else is private, how does this all play out, because there's got to be tons of synergies between all the different entities out there?

Yes, so great question. So, we would like to think there's going to continue to be further consolidation within the agent-based forwarding community. At least the typical will go back to the playbook metaphor. The typical playbook metaphor for the private companies is to hold and enhance these assets for three to five years and then spit them back out, and we've been kind of investing in building a back-office infrastructure in anticipation of having an opportunity to combine with one or more of those other groups and be able to unlock all the synergies that we know exist between the two companies. But having said that, it obviously takes two to tango. And so, we think ultimately it will make a lot of sense. We think it makes sense now, for that matter. But all we can do is continue to focus on our business and be ready to engage with one or more of those parties when and if they ever thought it made sense from their standpoint.

Excellent, okay. And then last one I'll throw out there, if and when a new NAFTA agreement gets signed, I assume that would be a nice positive for us with all the cross-border business we do.

Yes, absolutely. I mean we do a fair amount across both borders, both Canada and Mexico. So, that would – we haven't seen what I would refer to as any kind of slowdown in our cross-border traffic, but I would have to think that shippers may have slowed down some of their cross-border supply-chain strategies. As this stuff gets worked through and as the shipper community gets more confident in the landscape and can lock-in and execute strategies, I think that will translate into more cross-border freight that we'll have an opportunity to support.

And then one last one on our M&A, because I know you are keen to do sort of small tuck-in deals and agent networks, [indiscernible] traded at 3.5 to 4 turn discount to any other company out there. Does that make it difficult to go and bring those onboard when we do trade at such a low multiple? Obviously these are breakout numbers, so that could change quickly, but has that kind of held you back when you go evaluate some of these new deals that are trading at 12x EBITDA and we're here at 6.5?

Yes, absolutely. It's just kind of the practicality of the math, right. I guess in a very simplistic version of the conversation, a company doing $10 million to $15 million of EBITDA is going to command a plus or minus 10x multiple as a market clearing price for that transaction. When we're trading at 6x or 7x, it's awfully hard to create shareholder value paying 10x for a business when your own stock is trading at 6x or 7x. So, kind of I guess practically speaking, the market multiple that we're rewarded with in some respects defines the ultimate parameters around what we can pay for the businesses we would aspire to combine with. And so, all that translates into continuing to focus on smaller tuck-in acquisitions, organic growth, and stock buybacks, which all still feel really good, and when if we ever get more properly valued, then we'll have opportunities to do larger deals.

Thanks. Congratulations and that was a phenomenal quarter.

Thank you. This concludes the question-and-answer session. I'd like to turn the floor back over to management for any closing comments.

All right, 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 we have created and the scalability of our non-asset-based business model. Our now 12-year first-to-market advantage in executing our multi-brand strategy and consolidating agent-based forwarding networks, ongoing investment in technology, and low leverage on our balance sheet, puts us in a unique position to support further consolidation in the marketplace. We believe this represents our longer-term and almost perpetual opportunity and we continue to invest in technology and our people with an eye towards building out a world-class scalable back-office infrastructure to support a much larger enterprise going forward. We are patiently persistent in the pursuit of this long-term vision which we believe over time will deliver meaningful value for our shareholders, our operating partners, and the end customers that we serve. Thanks for listening and your support of Radiant Logistics.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.