Radiant Logistics Inc (RLGT) 2012 Q2 法說會逐字稿

This afternoon Bohn Crain, Radiant Logistics Founder and CEO, will discuss financial results for the Company's second fiscal quarter ended December 31, 2011. Following his comments we will open 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 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. Now I'd like to pass the call over to Radiant's Founder and CEO, Bohn Crain.

Thank you, Robin. Good afternoon, everyone, and thank you for joining in on today's call. As we discussed on our last quarter, we remain very bullish on the growth platform we have created at Radiant and the scalability of our non-asset based business model.

As I hope most of you know, on January 11 of this year we achieved a significant milestone with our uplisting to the Amex. From this new platform we will be working hard to share our story with the investment community. In fact, I'm talking to you today from Florida where I will be participating in two separate investor conferences held by both Stifel and BB&T over the course of this week.

The heart of our growth strategy continues to focus on bringing value to the agent-based forwarding community, leveraging our status as a public company to provide our partners with an opportunity to share in the value that they helped create, providing a robust platform in terms of people, process and technology which is translating into better purchasing power with our vendors and more sophisticated ebusiness solutions for our customers, and offering a unique opportunity in terms of succession planning and liquidity for our station owners.

This approach has made us unique in the marketplace and has been key to our ability to grow. Within this framework we are fueling our growth through a combination of organic and acquisition initiatives. Organically we continue to focus on improving the tools available to our existing network as well as expanding the network itself by on-boarding new agent stations that recognize the benefit of our platform.

In addition, we will also continue to opportunistically pursue accretive acquisition opportunities to further accelerate our growth. Here too the core of our effort will remain on acquisition candidates who are linked to the agent-based forwarding community. This would include the conversion of our current agent stations, the acquisition of agent stations participating in other networks and the acquisition of other competing networks.

In addition, we also have an interest in other non-asset based acquisition opportunities that are complementary to our current offering. Broadly these would fall into the categories of truck brokerage, intermodal NVOCC and customs brokerage services.

As we discussed on our last call as well, with our $10 million mezzanine financing in place with Caltius, we have approximately $15 million available under our senior credit facility with Bank of America and find ourselves with a robust pipeline of acquisition opportunities currently under review. We are also focused on driving productivity improvements across the network.

At this point most all of those redundant back-office costs of DBA's historical operations in Somerset, New Jersey have been eliminated. Also effective January 1 of this year we began our brand conversion strategy to operate each of our company-owned locations directly under the Radiant brand rather than the separate legacy brands. This will allow us to further rationalize our station level operating cost particularly in New Jersey.

As you may remember, historically we have had significant company-owned operations in Newark operating under the Airgroup brand and we are now working to streamline this combined DBA Airgroup location to operate as Radiant.

I also went to provide you with an update on our integration of Laredo-based Isla International. As you may remember, we completed the Laredo transaction in December of 2011 to service our Mexico Gateway and I believe it will serve as a competitive differentiator for us in the marketplace and a real opportunity for many of our stations to develop new business.

The Isla transaction also represented our first opportunity to provide liquidity to an owner in connection with their exit from a competing network and we believe this is indicative of the opportunity available to us. Since this transaction was completed effective December 1 of 2011 we do not have the benefit of a full quarter's contribution of Isla, but the integration has gone smoothly, all customers have made the transition and early indications are very favorable with indications of new revenue opportunities across the network.

I will now shift my comments to our financial results and then we will open it up for Q&A. Today we'll be discussing our financial results for our three and six months ended December 31, 2011. As we discuss our financial results, in addition to a discussion of reported net income, we will also provide financial metrics in terms of EBITDA.

EBITDA is an important metric for us for a couple of reasons, first we believe EBITDA is a useful measure with respect to understanding our earnings trends without the impact of certain non-cash charges associated with purchase accounting and the amortization of the acquired customer relationship asset and adjusted EBITDA is used by our creditors in assessing our debt covenant compliance.

For the three months ended December 31, 2011 we reported net income of $417,000 on $72.6 million of revenue or $0.01 per basic and fully diluted share including $188,000 in nonrecurring transaction costs related to the Company's acquisition of Isla and other transactions in process, as well as $280,000 in nonrecurring transition costs associated with the Company's acquisition of DBA, which are principally nonrecurring personnel costs that are being eliminated from the acquired operation.

For the three months ended December 31, 2010 we reported net income of $716,000 on $44.5 million of revenues or $0.02 per basic and diluted shares and that included a charge on litigation settlement of $150,000.

For the six months ended December 31 of '11 we reported net income of $1,073,000 on $144.4 million of revenues or $0.03 per basic and fully diluted share which included $269,000 in nonrecurring transaction costs related to our acquisition of Isla and other transactions in process and $563,000 in nonrecurring transition cost associated with the acquisition of DBA.

For the six months ended December 31, 2010 we reported net income of $1,499,000 on $90.9 million of revenue or $0.05 per basic and fully diluted share.

Let me now highlight our reported EBITDA numbers. We reported adjusted EBITDA of $1,941,000 for the three months ended December 31 of 2011 which includes $280,000 in nonrecurring transition cost associated with DBA compared to adjusted EBITDA of $1,672,000 for the comparable prior year period.

Excluding the $280,000 in nonrecurring transition costs we would have reported $2,221,000 of adjusted EBITDA for the three months ended December 31 of '11 for an increase of $549,000 or 38.2%.

We also reported adjusted EBITDA of $3,581,000 for the six months ended December 31 of '11, which includes $563,000 in nonrecurring transition costs associated with DBA and another $231,000 in nonrecurring legal costs. This compared to adjusted EBITDA of $3,381,000 for the comparable prior year period.

Excluding the $794,000 in nonrecurring cost we would have reported $4,375,000 in adjusted EBITDA for the six months ended December 31, '11 for an increase of $994,000 or 29.4%. A reconciliation of our adjusted EBITDA to the most directly comparable GAAP measure appears at the end of our earnings release.

For the quarter ended December 31, '11 we posted revenues of $72.6 million, an improvement of $28.1 million or 63.2% over the comparable prior year period. Domestic transportation revenues increased by 68.6% to $43 million for the three months of '11 from $25.5 million for the three months ended December 31, '10.

International revenues increased by 55.8% to $29.6 million for the three months ended December 31, '11 from $19 million for the comparable prior year period. These increases in revenue are due principally to incremental revenues attributed to our acquisition of DBA. Net transportation revenues also increased 42.8% to $20.2 million as compared to $14.2 million for the comparable prior year period.

We did see some compression in the margin characteristics of the business from 32% to 28% for the quarter with a number of contributing factors, including introduction of our new Laredo operation which is more typically deferred truck freight that carries a lower margin than our legacy business along with some nonrecurring lower margin charter business for the quarter.

With that said, we continue to believe that an aggregate gross margin percentage of plus or minus 30% is a reasonable expectation for the aggregate business going forward. In any event, as we have discussed previously, as a non-asset based 3PL we are ultimately driven to grow net revenue dollars on an absolute basis and then manage our operating costs as a function of these net revenues.

As we look at our operating cost as a function of net revenues we saw reductions in agent commission expense from 69.5% to 63% partially offset by increases in our personnel costs from 11% to 15.2%. This general dynamic is as expected with the composition of our network now including significant company-owned operations in Newark, Los Angeles and Laredo, and we'll continue to improve as we work to optimize our New Jersey operation.

We also experienced similar increases in our SG&A expenses during the quarter which were 12% of net revenues for the quarter as compared to 8% of net revenues for the comparable prior year period. These higher costs were driven by the incremental facilities costs of our three new company-owned locations in Newark, LA and Laredo as well as by nonrecurring legal expenses of approximately $188,000 which we incurred in connection with our acquisition of Isla and other transactions underway.

I've touched on our acquisition pipeline, but let me reiterate how excited we are about the opportunities we are seeing in the marketplace. Both big and small we believe we are in the right place at the right time with the right value proposition. And enjoy the financial flexibility to execute against these transactions with the very cost effective capital available to us from the $15 million of dry powder available through our BofA facility.

With that I'll turn the call back over to our moderator to facilitate any Q&A from the callers.

(Operator Instructions). Howard Halpern, Taglich Brothers.

Congratulations on the quarter.

Thank you.

In terms of the net transportation margins, the charter shipment part of that, do you expect that level that you experienced in this quarter to continue in the go forward quarters?

It will be very spotty in terms of how that ultimately is reflected in our numbers. So I don't think that we can say with any precision at this point how the charter business will manifest itself.

Remember, out of our 100-some-odd stations, many of which remain independent, we ultimately don't have absolute control over how they price that business. But at the same time remember that by and large with the preponderance of the business still being domestic we receive -- our ultimate take is expressed as a percentage of that gross revenue. So the -- a big part of this variability in the margin, the gross margin characteristic nets back to the agents in the form of a commission.

So we will certainly have charter business. We like the charter business and certainly don't intend to shy away from it. But it can create some variability in the absolute margin characteristics that we would present in any given quarter.

And also I guess the deferred truck rate part, is that showing up on the balance sheet as part of the accrual transportation costs?

I think we're a little confused or I may have confused you by using the term deferred. In this context deferred meant something other than expedited. So three day or an LTL truck shipment as opposed to deferred in the context of an accounting term. So that -- kind of let me express it a little differently for clarity.

The margin characteristics of the Mexico businesses, almost all of that freight moves by truck on a deferred basis and has a lower margin characteristic than the historical air freight business of the network. So it will modestly dilute the aggregate margin characteristics of the business.

Okay. And in terms of the company-owned stations, approximately how much revenue was generated from those locations?

I think we're at -- approximately 20% of our revenues at this point are generated from company-owned locations.

Okay. And then two cost-related questions. Assuming that legal expenses and the severance have basically gone away and there's still maybe some integration costs, comparing the first half to the second half what would you say the second-half run rate in reduction in cost should be due to those factors?

Let me respond to that question a little bit differently, but still get you to that -- I think the answer you're looking for. We still -- our prior guidance was $13 million of run rate EBITDA based upon the combined organization and we still believe that that is a good proxy for the combined earnings power of the business net of these nonrecurring costs.

Okay. And the brand consolidation, how do you expect that to truly benefit the Company in terms of actual cost and maybe even higher revenues down the road?

Well, our working plan is that we will operate each of our company-owned stores under the Radiant brand. So at this point in time we've got Newark, LA, Baltimore, Laredo all converted to the Radiant brand and over the next several months we'll convert Detroit which will kind of round out the portfolio of company-owned stores under the Radiant brand.

Specifically in New Jersey, and why I spent some time talking about it on the call this morning, is in New Jersey we had redundant station operations. Historically we had our air group office and then with a combination -- or with the acquisition of DBA and their big presence in Somerset, New Jersey we had redundancy at the station level. Not the back-office infrastructure where we also had redundancy, but we had at the station level customer facing side of things.

So as we began to share facilities we had two sets of phones ringing and we still had some duplicity in the organization supporting the multiple brands in that market. Well, we made our lives dramatically easier in New Jersey now. When the phone rings everybody can confidently answer as Radiant and it is giving us the opportunity to make sure that we've got the appropriate amount of resources there to support the business that we enjoy.

Thanks and keep up the great work.

Thank you.

Adam Wyden, ADW Capital.

Congratulations on a great quarter. Can you just walk me through some of the -- on the cost side, the duplication? So you guys have finished your transition/integration costs on the DBA side. And then I guess to get to where you said you were going to be June 12, what additional costs are going to be I guess removed? I'm just try to reconcile the 4375 and I guess you have 10.5 or you said that you were going to do 10.5 by June 12, is that right?

Yes, I think at the number that we've got out there on a reported basis. We have -- I don't have the precise numbers in front of me to get into painful detail, but we certainly have -- through December we had a fair amount of -- that cost that was identified in this most recent quarter for the transition cost, that is new savings that came out as we began to focus on the ops side of the equation in Somerset. So that's where our focus is presently.

And there's certainly a little bit more cost to come, or we're expecting some more cost to come out of that here for the quarter ended March. I would think by the end of March we will have completed that process and that should get us to where -- to kind of our steady-state or run rate.

As we absorb the DBA network to ensure that we made good on providing the best services to all of our agent stations we on-boarded a handful of temporary employees in our corporate back-office in Seattle to help with the transition and to just kind of get in that in a little more detail. When an individual station is not proficient in using our operating system and put things into the system incorrectly it creates work for us to undo that in the back office in Seattle.

So we had to put some more resources against that dynamic to compensate for the DBA stations until and as they became more proficient on the system. We seem to have worked through that process at this point and I think we've got six or eight kind of temporary employee headcount that either have or are expected to be exited here in the next month or two.

Okay. And then from what I understand there was -- you guys have consolidated all the acquisition costs and the debt associated with Isla, but you recognized a loss -- I mean for the month (technical difficulty) money that was contributed to this quarter's EBITDA, correct? And you had also -- there's some EBITDA associated in the second half of the year that will come from Isla, is that right, but there should be no integration or (multiple speakers)?

Basically I think the point that you were trying to kind of tee up there is we had a slug of effectively nonrecurring transaction costs under the new purchase accounting rules. We no longer capitalize all the legal and transaction costs with an individual transaction, so that's landing in this current quarter. That obviously won't be there on a go-forward quarter.

And then beyond that what we're seeing in this quarter isn't indicative of the Isla contribution because we only have one month of business for Isla. And obviously we'll have three months for our quarter ended March.

So I mean, 4375, if you double that and add $1 million -- and add $1,750,000 you're basically -- you're at $10,500,000 is kind of what -- that's how you're kind of confidently getting there, right? Because we talked about a $3.5 million pro forma contribution from Isla, is that right?

I believe it was $3 million was the number that we've used for Isla.

So $3 million. So $3 million -- so if -- 4375 times 2 is 8750, plus $3 million is $11,750,000, okay. I'm just looking at the previous guidance, preliminary pro forma guidance fiscal year ended June 30, 2012 versus normalized earnings power. So you're basically assuming that there's another -- to get to the $13 million you're assuming that there's another $1,250,000 of duplicative operating costs still coming out of DBA and whatnot, is that how I should look at that?

Well, I think you're dimensionally correct. I don't know that the number -- I don't think that we can -- there's obviously other factors, there's seasonality in the business and other things that get us to those numbers.

That there is better volumes in the winter and spring than in the previous six months, there's some seasonality, is that right?

That is correct.

Okay. So can you quantify I guess -- I'm just trying to understand, can you quantify the additional I guess cost savings that if you were to like say what percentage of the cost savings that you had initially viewed, what percentage of those do you think you've taken out of the system at this point?

I think that we had taken out -- I would say we had -- as of now we had most of -- as of now we have probably 90% of the cost taken out. It wasn't that high as of the reported December 31 numbers, we've made -- in connection with our brand convergence January 1 that was an enabler for us to make other steps and that's helping unlock some of that value.

Right. So I mean, obviously there is some seasonality but if you just -- even if you just annualize out the quarter you're getting to almost I guess what is it, 72 -- you're getting like $290 million of revenue plus Isla of $25 million for the previous. I mean you're clearly above and beyond on the revenue side where you said you were going to be.

So I'm just trying to match up the cost with the revenues. Because I guess in your previous guidance you had said $310 million of revenue on $13 million of EBITDA. But you seem to already be kind of running pretty close to that, if that makes any sense.

Yes. No, and I guess just to kind of come at that differently, the revenues are there, we're still taking cost out of the organization at DBA to hit those numbers.

Okay. And so that's going to come from combining a couple locations which has yet to happen, is that right?

That is correct. Well, they were physically combined but we still had redundant and still have redundant books.

Okay. And so can you put a number on that -- $500,000, $1 million, $2 million, $5 million?

I don't want to quantify that precise number at this point.

Okay. And so, can you talk a little bit about the organic growth in the quarter? Just kind of from back of the envelope if you just assume what you had said that DBA had done in August and you had seen what your other business had done in August, right. I got to something on the measure of 7% or 8% organic growth in the business. Can you talk about that and see if -- what's that attributable to? Is that correct? Do you think it's accelerating? Can you talk a little bit about the organic opportunity at this point?

Sure, I mean I think that's a good estimate of the same store growth element.

7% or 8%.

I'm very -- I don't know if bullish is the right word, but we didn't factor it into the numbers per se, but we have high expectations of revenue synergies coming to us through the Laredo transaction.

And that has -- and kind of our working plan, and we've stuck to it, is we basically said job one for Laredo was for Laredo to focus on transitioning their own book of business to the Radiant network and we would basically introduce Laredo to the rest of our agent stations at our upcoming annual meeting in May and that was just kind of how we were going to approach it.

But without any effort on our part through I guess what you would refer to as a reverse inquiry process, we've had probably six or eight stations by their own design reach out to us and say, we have existing business with customers who have Mexico freight that we're not servicing. Tell me more about Laredo, give me Jonathan Fuller's phone number, we want to go pursue this business.

So it's very early returns, but we think that just kind of the trends for cross-border trade with Mexico on a macro sense are very compelling and Laredo as our gateway and leveraging that across the network, we think there may be some upside for us there. But I wouldn't want to speculate in trying to quantify it at this point.

Right, but you guys are growing on an organic basis pretty nicely 7% to 8% even without the Laredo because Laredo didn't even close until December 1, is that correct?

That's correct.

Okay, and that's fully consolidated, all costs, all everything, the mezzanine debt and everything, is that correct?

That's correct.

Can you talk about the cash flow characteristics? It looked like you generated a bunch of cash. Is that because you're winding down receivables for legacy businesses? Or I mean I'm just trying to understand how you took out all the cash. Is that because your working capital needs go down as the network gets bigger or what is that?

No, I think it was more -- I mean, I think the short answer is our payables went up. So if you kind of look at the cash flow statement, we saw some growth on the transportation payables side of things. So I don't think $3.5 million of free cash flow as much as that -- as good as that looks on the cash flow statement, I don't think that that is a fair proxy for run rate cash flows.

Oh, for the quarter. No, of course not. I was just trying to understand if that was related to the transaction such that you -- as the business is scaling your working capital needs are going down and so you're able to unlock cash out of the transaction.

It's actually kind of the flip of the other thing I was describing to you. When the DBA stations don't input the shipments precisely correct in the operating system, it makes it more difficult for us to pay the carriers.

Okay. Can you talk about the litigation that's going on with DBA that you disclosed in your Q in January and how that's affected the business? And can you talk about the performance of DBA per kind of what you had seen on August 31, 2010 and what the gross affects of all of this are?

It would be I guess premature for us to get into too much detail on the litigation at this point. At a very summary level, as we've taken on these company-owned locations in Newark and LA and really kind of got in there and worked to understand financial performance and metrics, we discovered some things that we didn't necessarily expect to find.

And Los Angeles, as an example, we found several (technical difficulty) [related] party transactions that were ongoing with one of the selling shareholders. And as we basically engaged to take corrective actions that kind of set up a bit of a conflict between us and the seller.

So we're working through that as we speak. We believe that -- that their absolute -- that they are absolutely on the wrong side of this situation and fortunately for us we have remedies available to us under the purchase agreement that we're pursuing. And as far as the ongoing business (multiple speakers).

(Multiple speakers) franchise base, and that integration has gone well and all the people on the network are very happy with you, this is more of like an owner situation, correct?

Correct, absolutely.

Okay. So I mean (multiple speakers).

(multiple speakers) and I would go a step further and say there were multiple owners and this is a single owner. The other selling shareholder remains in his post and he's doing a fantastic job in helping us move the business forward.

Okay. And so, in the context of the performance I mean per kind of your initial schedule for DBA your earn out and all that, I mean -- to the selling shareholders, I mean you don't feel like DBA is underperforming in the context of whatever this related party transaction or something like -- anything with the litigation, right?

I mean, the acquisition has -- the business is -- I mean at least from the numbers it seems like the business is contributing organic revenue growth and all of that. So I'm just trying to understand the dynamics of the acquisition, earn out payments and all of that.

Well, the DBA transaction does not have earn outs, but we notionally thought of DBA as contributing plus or minus $2.5 million of EBITDA on a run rate basis and we're getting there. It's not there yet, we've had to -- we expected to eliminate -- candidly we expected to eliminate costs associated with the redundant back-office corporate costs.

We really didn't expect to find DBA's two company-owned stores operating the way they were. And so we are -- that's an opportunity for us to enhance the financial performance of that acquired business as we drive those efficiencies in those two locations that we've identified and are pursuing.

So the $12 million -- the $2.5 million -- I mean it's a $12 million deal and it's $2.5 million so it was roughly 4.5 times before the combination of a couple company-owned stores, right?

Correct.

Okay. Got it, got it. But overall on the revenue side, the integration side, it's all coming together. It's just -- (multiple speakers) can you talk about what the ongoing cost of this litigation is going to be?

(Multiple speakers) and clearly the DBA brand also gives us an opportunity to continue to grow in certain markets where we wouldn't otherwise have the opportunity.

Okay. Can you talk a little bit about the acquisition pipeline? Like what you're seeing in terms of company conversions, like guys who are already on your network versus kind of conversions from other people's networks and kind of what you see the flavor of the pipeline being?

It seems like these network deals have been a little -- they're a little exhausting in terms of transition and integration and litigation. It seems like the company-owned buys seem somewhat smoother in nature. I mean is that kind of where you're heading, is that what you're seeing?

Well, I don't want to get into too much detail for obvious reasons, but I can tell you we're not actively talking with any other networks at this point in time. But we have a multitude of conversations going on in kind of other flavors of transactions.

And one of the things that's exciting for us right now is we seem to have reached some critical mass where we're getting reverse solicitations from a number of interested, credible, qualified, profitable business seeking to join us.

And so, it's a pretty interesting time and we're -- I like to joke, but it's a full employment opportunity back at our house right now. Everybody has really got their -- got the gas to the floor and we've got a lot of interesting things in the works.

Okay, so, yes. That's kind of what you're spending the money on for I guess this transaction. And the $200,000, $188,000, that's the Laredo transaction, kind of what you're looking at on kind of an ongoing basis, is that right?

Correct. Yes, I mean from a growth perspective you should see us continuing to on-board new agent stations, you should see hopefully over the course of 2012, calendar '12 you'll see us do one or more conversions of existing agent stations. And hopefully you'll see a few more transactions like the Laredo transaction where folks are leaving their current environments and coming our way in connection with a liquidity event.

Right. And can you talk about -- so how do you expect to I guess pay for some of these things? I mean is it kind of going to be the standard kind of purchase price that it's been in the 4 or 5 times EBITDA? Are the purchase price multiples kind of scaling upwards, or (multiple speakers)?

No, I think that's the -- it's kind of the prototypical framework in a general sense, 4 to 5 times trailing 12 months EBITDA, 50% down, balance structured as an earn out and we would expect to use our low cost capital money available through BofA, which is 3% or 4% money.

We've got $15 million available on that facility currently and obviously as we do transactions they'll have their own incremental accounts receivable to contribute. And so we probably ultimately have even a little more than $15 million of capacity.

But if we did a transaction that did not contribute a dollar of incremental borrowing capacity, which wouldn't be the case, but even under that most conservative view we've got $15 million of availability.

So you still feel confident that you're on pace to kind of hit your $13 million of -- I guess $13 million normalized earnings power for year ended June 30, 2012, is that right?

Yes. I think on a -- obviously on a reported basis, no, as we kind of work through some of these integration issues. But on a normalized run rate earnings contribution, yes.

For June 2012, so that's six months away --.

June 30, '12 -- I need those 10 days, Adam.

All right. So let me just be clear here. For June 30, 2012 you think that the business will be running -- will produce normalized earnings of $13 million, is that correct?

That's correct.

And does that -- and that does not factor in any organic revenue growth or any new acquisitions or anything like that, is that correct?

It does not factor in any acquisitions.

It does not factor in any acquisitions; it does factor in some growth in the underlying organic business?

Correct.

Okay, got it. Okay, that's it for me. Thank you.

All right, you wore me out today.

(Operator Instructions). Richard Lin, Three Arch Opportunity Fund.

I think Adam more or less asked the EBITDA question I was getting at. But for -- one question I have is for EBITDA margin over net revenue; you're around -- this quarter around 10.8%. As a well-run business if you look out two or three years from now, what percent do you think this Company can get to with some more scale? Can you give me some visibility on that?

To an extent. I think if you kind of ran that same math on some of the largest competitors, the expediters, and CH Robinson's of the world, I think you would find EBITDA to net revenue margins in -- I want to say in like the mid 30s. So the art of the possible goes from 10 to 30, that's -- obviously a big piece of that is scale, but there's certainly no reason we shouldn't be doing, I would say, 15% to 18% margins in the next 24 to 36 months.

Okay, that was helpful. I was going to try and get some color on your 2013 numbers. So 15% to 18% EBITDA margins is not out of the ball park here for the next year as you grow the business, is that what you're saying?

Yes. Well, think I said the next couple of years. I don't want you to pin me to that.

Fair enough. Let's say in two or three years.

Yes.

Okay, and then is it fair to model that 6% to 8% same-store growth going forward? Do you think that's a pretty conservative number or not?

I do. We've got a lot of -- we've got a lot of good things going on in terms of the aggregate size and scale of the business and the incremental tools and technology that we're bringing to bear and some -- the excitement and energy associated with the Laredo transaction.

And with each transaction -- almost without exception every transaction that we do not only is a good deal standing on its own, but it also brings value back to the aggregate network, a new tool in the toolbox and Laredo is a perfect example of that. I don't -- let's go on the low end to be conservative, but I don't think 6% is at all unreasonable.

Okay, fair enough. And when will you give guidance on 2013 numbers? Is that next quarter or is that going to be after your June quarter?

It will probably be after our June quarter, but let us give some thought to that. And if we have enough visibility and comfort we'll share it as soon as we feel confident in doing so.

Okay, fair enough. And just to reiterate what Adam was getting at, so end of June you think you can be at a $13 million EBITDA run rate just if you normalize everything is kind of -- you still feel good about that, is that fair?

That's fair.

All right, thanks for taking the call.

There are no further questions in the queue at this time. I would like to turn the floor back over to you for closing comments.

Thank you. Let me close by saying that we remain very excited with our progress and prospects here at Radiant. We continue to make progress in executing our strategy leveraging the Radiant platform to bring value to the agent forwarding community.

We remain very excited about the opportunity for continued organic growth available through our expansion of our network and believe we remain uniquely positioned to bring value to our network participants -- leveraging our status as a public company to provide our partners with an opportunity to share in the value that they help create; providing a robust platform in terms of people, process and technology which is translating into better purchasing power with our vendors and more sophisticated e-business solutions for our customers; and offering a unique opportunity in terms of succession planning and liquidity for our station owners.

Our recent up listing to the Amex was an important milestone and natural progression in the evolution of our Company, which we believe will over time provide us with increased exposure to institutional investors and investment funds as well as more transparency for the market. And all this will ultimately translate into higher trading volumes, more cost-effective access to capital and ultimately higher prices for our stock.

We all share in this achievement and this opportunity and I look forward to providing you with further updates as we progress our plans. Thank you 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.