Management at 3PL Radiant Logistics said Wednesday evening the market is reflective of one “at or near the bottom of the cycle.” The Renton, Washington-based company modestly beat the consensus earnings-per-share estimate for the fiscal fourth quarter ended June 30. Share repurchases led to the modest EPS beat but adjusted earnings before interest, taxes, depreciation and amortization came in light of expectations.

Radiant (NYSE: RLGT) reported adjusted earnings per share of 13 cents for the period, a penny ahead of the consensus estimate but 25 cents lower year over year (y/y). Revenue was off nearly 40% y/y at $232 million.

“The confluence of shippers continuing to manage through elevated inventories, reduced imports and slowing economic growth has had a cascading effect across virtually every mode of transportation,” said Bohn Crain, founder and CEO, on a call with analysts.

Net revenue margin increased 590 basis points y/y to 28.6% as lower freight rates resulted in lower purchased transportation expenses. Adjusted EBITDA declined 65% y/y to $9.2 million. The number was below the company’s more normalized annual EBITDA run rate of $50 million to $60 million.

On a possible demand inflection, Crain noted that ocean volumes are improving somewhat and that over-the-road truck capacity could begin to tighten.

“Folks were hopeful that the last half of this year, we would start to see meaningful improvement,” Crain said. “People now seem to be pointing to calendar 2024 and not necessarily early in calendar 2024.“

Radiant generated $98 million in cash flow from operations for the recent fiscal year and bought back $11 million in stock. It had $33 million in cash and nothing outstanding on its revolving credit facility.

It expects to reengage in M&A as the market cooperates, noting it will first look at converting agent stations in its network to company-owned operations and then pursue tuck-in acquisitions. It will also continue to repurchase shares.

“Given the right opportunities, we would expect to re-lever our balance sheets, and we think there’s a lot of upside for us and our shareholders in terms of where we are and where we’re going from here,” Crain said.

He said Radiant is comfortable taking debt leverage to 2.5 times to fund the right deal.

The company opened a new brokerage office in Overland Park, Kansas, shortly after the shutdown of less-than-truckload carrier Yellow Corp. Managers from shuttered Yellow Logistics are running the operation.

Shares of RLGT were down 9.9% at 10:49 a.m. EST on Thursday compared to the S&P 500, which was up 0.6%.

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