Proficient Auto Logistics, Inc.(PAL) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Highlights Key Financial and Operational Metrics Proficient Auto Logistics reported significant sequential and year-over-year growth in total operating revenue and units delivered for Q2 2025, with GAAP operating income declining year-over-year but adjusted operating income improving sequentially Q2 2025 Key Financial and Operational Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Q-o-Q Change (vs Q1 2025) | Y-o-Y Change (vs Q2 2024) | | :---------------------- | :-------- | :-------- | :-------- | :----------------------- | :----------------------- | | Total Operating Revenue | $115.5 million | N/A | N/A | +21.4% | +8.4% | | Total Operating Income (Loss) | $0.1 million | ($2.4) million | $7.0 million | N/A (from loss to income) | -98.6% | | Adjusted Operating Income | $3.8 million | $1.2 million | $8.7 million | +216.7% | -56.4% | | Adjusted Operating Ratio | 96.7% | 98.7% | 91.8% | -2.0 pp | +4.9 pp | | Total Units delivered | 631,426 | N/A | N/A | +28% | +24% | CEO Commentary CEO Rick O'Dell highlighted stronger Q2 revenue from market share gains and the Brothers acquisition, noting improved sequential profitability while emphasizing ongoing cost control amidst a weaker base market and volatile automotive sales - Stronger Q2 revenue attributed to market share gains and the Brothers acquisition, demonstrating strategic execution in an uncertain environment[3] - Improved profitability sequentially, but further work is needed to control costs in a base market that continues to be weaker than expected[3] - Automotive sales rates have been volatile due to changing tariff policy and cautious large purchase behavior by consumers[3] Company Background and Context Business Description Proficient Auto Logistics is a leading North American specialized freight company providing comprehensive auto transportation and logistics, primarily delivering finished vehicles to dealerships - Proficient Auto Logistics is a leading specialized freight company focused on providing auto transportation and logistics services in North America[16] - Services primarily involve transporting finished vehicles from automotive production facilities, marine ports of entry, or regional rail yards to auto dealerships[16] IPO and Acquisition Overview Proficient completed its IPO and acquired five Founding Companies in May 2024, subsequently expanding operations through ATG and BAT acquisitions to establish one of North America's largest auto transportation fleets - Proficient completed its IPO and acquired five Founding Companies (Delta Auto Transport, Deluxe Auto Carriers, Sierra Mountain Group, Proficient Auto Transport, and Tribeca Automotive Inc.) on May 13, 2024[4] - Subsequent acquisitions include Auto Transport Group (ATG) on August 16, 2024, and Brothers Auto Transport (BAT) on April 1, 2025[7][9] - Through these combinations, the company operates one of the largest auto transportation fleets in North America[16] Unaudited Combined Financial Results Summary Financial Performance Proficient's Q2 2025 saw significant sequential increases in total operating revenue and a return to positive operating income, though Adjusted Operating Income and Adjusted EBITDA were lower year-over-year due to increased non-cash acquisition expenses Summary Unaudited Combined Financial Information ($000s) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Q-o-Q Change | Y-o-Y Change | | :---------------------- | :------ | :------ | :------ | :----------- | :----------- | | Total Operating Revenue | $115,547 | $95,206 | $106,607 | +21.4% | +8.4% | | Total Operating (Loss) Income | $125 | ($2,363) | $7,041 | N/A | -98.2% | | Adjusted Operating Income | $3,801 | $1,236 | $8,730 | +207.5% | -56.4% | | Adjusted Operating Ratio | 96.7% | 98.7% | 91.8% | -2.0 pp | +4.9 pp | | (Loss) Income before income taxes | ($1,882) | ($3,894) | $5,793 | N/A | N/A | | Adjusted EBITDA | $11,279 | $7,764 | $12,414 | +45.3% | -9.2% | | Adjusted EBITDA Margin | 9.8% | 8.2% | 11.6% | +1.6 pp | -1.8 pp | Select Operating Metrics Unit volumes increased significantly sequentially and year-over-year, but revenue per unit declined due to customer mix and fewer spot buy opportunities, while company deliveries revenue proportion increased and dedicated fleet revenue decreased Select Operating Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Q-o-Q Change (vs Q1 2025) | Y-o-Y Change (vs Q2 2024) | | :-------------------------- | :-------- | :-------- | :-------- | :----------------------- | :----------------------- | | Unit Volume - Company Deliveries | 220,578 | 163,754 | 152,714 | +34.7% | +44.4% | | Revenue / Unit - Company Deliveries | $178.82 | $185.38 | $212.25 | -3.5% | -15.8% | | Unit Volume - Subhaulers | 410,848 | 330,755 | 354,998 | +24.2% | +15.7% | | Revenue / Unit - Subhaulers | $166.50 | $173.14 | $190.77 | -3.8% | -12.7% | | Percent Revenue, Company Deliveries | 37% | 35% | 32% | +2 pp | +5 pp | | Percent Revenue, Subhaulers | 63% | 65% | 68% | -2 pp | -5 pp | - Total revenue increased $20.3 million (21%) sequentially and $8.9 million (8.4%) year-over-year, while unit volumes were up approximately 28% sequentially and 24% year-over-year[10] - The dedicated fleet portion of Proficient's revenue was $3.8 million in Q2 2025, a decrease from $4.3 million in Q1 2025 and $7.3 million in Q2 2024[10] Balance Sheet and Liquidity Proficient ended Q2 2025 with $13.6 million cash, $90.2 million total debt, $76.6 million net debt, and a 2.2x net leverage ratio, having fully utilized its term debt facility for the BAT acquisition Key Balance Sheet and Liquidity Metrics (as of June 30, 2025) | Metric | Amount | | :-------------------- | :----------- | | Cash | $13.6 million | | Total Debt | $90.2 million | | Line of Credit Drawn | $5.0 million | | Net Debt | $76.6 million | | Net Leverage Ratio (TTM Adj. EBITDA) | 2.2x | - The $25.0 million term debt facility was fully utilized during the quarter to fund the cash portion of the BAT acquisition[13] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, Proficient reported total assets of $520.5 million, an increase from December 31, 2024, driven by accounts receivable, property, equipment, and goodwill, with total liabilities also increasing and stockholders' equity modestly rising Condensed Consolidated Balance Sheets Summary | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :------- | | Total Current Assets | $71,946,946 | $67,687,442 | +$4,259,504 | | Property and equipment, net | $127,655,334 | $122,636,636 | +$5,018,698 | | Goodwill | $174,090,117 | $169,056,675 | +$5,033,442 | | Intangible assets, net | $129,840,169 | $132,490,640 | -$2,650,471 | | Total Assets | $520,458,060 | $508,086,944 | +$12,371,116 | | Total Current Liabilities | $62,170,001 | $52,623,931 | +$9,546,070 | | Total Liabilities | $180,929,753 | $170,107,421 | +$10,822,332 | | Total Stockholders' Equity | $339,528,307 | $337,979,523 | +$1,548,784 | Condensed Consolidated Statements of Operations For Q2 2025, Proficient reported total operating revenue of $115.5 million and a net loss of $1.56 million or ($0.06) per share, with the six-month period showing a net loss of $4.75 million or ($0.17) per share, primarily due to significant purchased transportation and depreciation expenses Condensed Consolidated Statements of Operations Summary | Metric | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Total operating revenue | $115,546,586 | $210,752,607 | | Total Operating Expenses | $115,421,228 | $212,989,755 | | Operating (loss) income | $125,358 | ($2,237,148) | | Loss before income taxes | ($1,882,154) | ($5,776,460) | | Net loss | ($1,556,833) | ($4,748,518) | | Loss Per Share (Basic & Diluted) | ($0.06) | ($0.17) | | Weighted Average Shares (Basic & Diluted) | 27,611,515 | 27,341,813 | - Key operating expenses for the three months ended June 30, 2025, included purchased transportation ($58.9 million), salaries, wages and benefits ($22.5 million), and depreciation ($7.6 million)[27] Non-GAAP Financial Measures Definition and Purpose Proficient's management uses non-GAAP measures like Adjusted Operating Income, Adjusted Operating Ratio, and Adjusted EBITDA to assess performance, facilitate comparisons, and inform strategic decisions by excluding non-cash and non-recurring items - Adjusted Operating Income and Adjusted Operating Ratio are used to compare financial reporting periods by excluding non-cash stock-based compensation and amortization of intangibles resulting from acquisitions[8] - Adjusted EBITDA and Adjusted EBITDA Margin are reviewed by management to measure operating performance, financial condition, and make strategic decisions, providing useful information by excluding certain non-recurring items[8][19] - Adjusted EBITDA is defined as net income (loss) for the period adjusted for interest expense, net, income tax expense (benefit), depreciation and amortization expense, and stock compensation expense[21] Adjusted Operating Income Reconciliation For Q2 2025, Adjusted Operating Income of $3.8 million was derived by adding back $2.46 million in amortization of intangibles and $1.22 million in stock compensation expense to the Total Operating Income of $0.1 million Adjusted Operating Income Reconciliation ($000s) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | :------ | | Total Operating (Loss) Income | $125 | ($2,363) | $7,041 | | Addback: Amortization of Intangibles | $2,455 | $2,416 | $1,076 | | Addback: Stock Compensation expense | $1,221 | $1,183 | $613 | | Adjusted Operating Income | $3,801 | $1,236 | $8,730 | Adjusted EBITDA Reconciliation For Q2 2025, Adjusted EBITDA was $11.3 million, calculated by adding back depreciation & amortization, stock compensation, and interest expense to Loss before income taxes, with trailing twelve months Adjusted EBITDA at $35.2 million Adjusted EBITDA Reconciliation (Quarterly, $000s) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | :------ | | (Loss) Income before income taxes | ($1,882) | ($3,894) | $5,793 | | Addback: Depreciation & Amortization | $10,102 | $8,904 | $4,761 | | Addback: Stock Compensation Expense | $1,221 | $1,183 | $613 | | Addback: Interest Expense | $1,838 | $1,571 | $1,247 | | Adjusted EBITDA | $11,279 | $7,764 | $12,414 | Adjusted EBITDA Reconciliation (Trailing Twelve Months, $000s) | Metric | Twelve months ending 6/30/2025 | | :-------------------------- | :----------------------------- | | (Loss) Income before income taxes | ($12,105) | | Addback: Depreciation & Amortization | $35,918 | | Addback: Stock Compensation Expense | $4,611 | | Addback: Interest Expense | $6,777 | | Adjusted EBITDA | $35,201 | Corporate Information Conference Call Information Proficient Auto Logistics will host an investor conference call on August 11, 2025, at 5:00 p.m. EDT to discuss Q2 2025 financial results, offering registration and webcast options - An investor conference call is scheduled for August 11, 2025, at 5:00 p.m. EDT to discuss the Q2 2025 financial results[15] - Investors can join the conference call by registering through a provided link or access a listen-only webcast[15] Forward-Looking Statements This press release contains forward-looking statements about future business results and financial conditions, subject to substantial risks and uncertainties detailed in the company's Annual Report on Form 10-K, with no obligation to update unless legally required - The press release includes forward-looking statements concerning possible future results of the business, financial condition, and operations, which involve substantial risks and uncertainties[17] - Readers should not place undue reliance on these statements, as actual results, events, or circumstances could differ materially from those projected, and the company undertakes no obligation to update them except as required by law[17][18]