Announces New Acquistion to Close During the
Third Quarter
Proficient Auto Logistics, Inc. (NASDAQ: PAL) today reported its
financial results for the three months ended June 30, 2024, for
Proficient Auto Logistics, Inc. (“Proficient”, or the “Company”),
Proficient Auto Transport, Inc. (“Proficient Transport”, or
“Predecessor”) and for the five Founding Companies on a combined
basis.
Second Quarter Highlights (all on a combined basis compared
to second quarter 2023)
Total Operating Revenue of $106.6 million,
an increase of 5.8%
Total Operating Income of $7.0 million, a
decrease of 3.7%
Adjusted Operating Income(1) of $8.73
million, an increase of 19.4%
Adjusted Operating Ratio(1) of 91.8%
compared to 92.7% in 2023
Total Units delivered of 507,712 in 2024,
an increase of 10.5%
_______________________
(1)
Adjusted Operating Income and Adjusted
Operating Ratio are non-GAAP financial measures. See “Summary
Unaudited Combined Financial Information” on the following page for
additional information regarding the use of Adjusted Operating
Income and Adjusted Operating Ratio and a reconciliation to the
most comparable GAAP measure.
“Proficient Auto Logistics produced strong operating results
during the second quarter in spite of weakening customer demand
during June,” said Rick O’Dell, Proficient’s Chief Executive
Officer. “We are also very pleased to announce that we will be
adding what is essentially a sixth founding company to the
organization when we close on the purchase of Auto Transport Group
(ATG) during the third quarter.”
“We expect to close on the acquisition of Auto Transport Group
during August, “said Mr. O’Dell. “ATG is based in Ogden, Utah and
this strategic acquisition enhances the density of our coverage in
the West. ATG is led by its CEO, Brent Larsen, and will maintain
its strong brand within the Proficient Auto Logistics umbrella of
companies. ATG has an outstanding management team, great service,
robust technology platforms and industry leading margins.”
“We’re excited for the go to market collaboration opportunity
offered by the combination with Proficient Auto Logistics,” added
Brent Larsen. “It’s a great opportunity to expand the Company that
we have built over the past 25 years.”
We continue to make progress on Proficient’s key operating
priorities, however, given the long-term nature of these
initiatives we expect the financial impacts to become more evident
over the next twelve to eighteen months. Implementation of best
practices across the Founding Companies and coordination of
operations, including load-sharing opportunities and other
integrations, have started to show up in the combined operating
ratio during the second quarter.
For accounting and reporting purposes, Proficient has been
identified as the designated accounting acquirer of each of the
Founding Companies and Proficient Transport has been identified as
the designated accounting predecessor to the Company. As a result,
the unaudited condensed consolidated financial statements as of,
and for the three and six months ended, June 30, 2024 for each of
Proficient and Proficient Transport are to be included in the
Quarterly Report on Form 10-Q. The Company is not required to
provide, and the Quarterly Report on Form 10-Q will not contain,
pro forma financial data giving effect to the completion of the
combination transactions forming the Company (the “Combinations”)
and the completion of the Company’s initial public offering (the
“IPO”) and the use of the proceeds therefrom. However, the Company
is providing below summary unaudited combined financial information
for the three months ended June 30, 2024. The summary unaudited
combined financial information has been prepared by, and is the
responsibility of, Proficient’s and the Founding Companies’
management. This information has not been subjected to audit,
review or agreed-upon procedures of any audit firm, and therefore,
there is no independent auditors’ opinion or any other form of
assurance with respect thereto.
Summary Unaudited Combined Financial Information
Three Months Ended June
30,
2024
2023
(Dollars in thousands)
Revenue before Fuel Surcharge
$
100,824
$
95,389
Fuel surcharge and reimbursements
5,783
5,387
Total Operating Revenue
$
106,607
$
100,776
Total Operating Expenses
99,566
93,467
Total Operating Income
7,041
7,309
Add Back:
Amortization of Intangible Assets
1,076
—
Stock Compensation Expense
613
—
Adjusted Operating Income (1)
8,730
7,309
Adjusted Operating Ratio (1)
91.8%
92.7%
Income before taxes
5,793
6,051
Add Back:
Depreciation and Amortization
4,761
4,725
Stock Compensation Expense
613
—
Interest Expense
1,247
1,258
Adjusted EBITDA (2)
$
12,414
$
12,034
Adjusted EBITDA Margin (2)
11.6%
11.9%
(1)
Our management team reviews Adjusted
Operating Income and the related Adjusted Operating Ratio, both of
which are non-GAAP financial measures, as a basis for comparing the
results of financial reporting periods excluding the impact of
non-cash expenses related solely to our recent IPO and the
concurrent corporate combinations. These measures provide
management with the requisite insight regarding progress on
operating and integration initiatives. The table above provides a
reconciliation of Adjusted Operating Income to the most comparable
GAAP measure and Adjusted Operating Ratio flows from that.
(2)
Our management team reviews Adjusted
EBITDA and Adjusted EBITDA Margin, both of which are non-GAAP
financial measures, to measure the operating performance and
financial condition of our business and to make strategic
decisions. See the Appendix for additional information regarding
the use of Adjusted EBITDA and a reconciliation to the most
comparable GAAP measure and Adjusted EBITDA Margin flows from
that.
The amounts shown above reflect the unaudited summary combined
financial results of the five Founding Companies for the full
three-month periods presented without any pro forma adjustments
that would give effect to the completion of the IPO or any related
transaction expenses or adjustments recognized as a result of the
IPO and concurrent Combinations. The results of Proficient
(acquiror entity) are included in the three months ended June 30,
2024; however, they reflect only those operating expenses incurred
following the closing of the IPO and concurrent Combinations (May
13 – June 30, 2024). There are no comparative expenses of
Proficient during the three months ended June 30, 2023, as the
company had not yet been formed.
Revenue before Fuel Surcharge. Revenue before Fuel Surcharge
increased $5.4 million, or 5.7%, for the quarter ended June 30,
2024, in comparison to the comparable quarter of 2023. This
increase reflects strong customer demand during April and May, with
year-over-year revenue up approximately 11% for that two-month
period. Demand slowed significantly during June – with 2024 revenue
lower by approximately 8% compared to June 2023, which resulted in
the 5.7% increase for the full quarter referenced above. Excluding
the dedicated fleet business – which continues to be dramatically
reduced versus 2023, total unit deliveries increased approximately
12% over the prior year second quarter and average revenue per unit
delivered increased from $183 in the second quarter of 2023 to $189
in the second quarter of 2024 – which is an approximate 3%
increase.
Fuel Surcharge and reimbursements. Fuel Surcharge and
reimbursements increased $0.4 million, or approximately 7%, for the
quarter ended June 30, 2024, in comparison to the comparable
quarter of 2023. These reimbursements generally fluctuate with the
price of fuel, which during the three-month periods ending June 30
of the respective years were essentially unchanged.
Total Operating Expenses. Total operating expenses increased by
$6.1 million, or 6.5%, for the quarter ended June 30, 2024, in
comparison to the comparable quarter of 2023. The largest
components of this increase were in purchased transportation ($2.0
million); salaries, wages and benefits ($1.8 million); and general
and administrative expenses ($1.2 million). Although purchased
transportation increased by $2.0 million year-over-year, it was
lower as a percentage of revenue by approximately 111 basis points
(51.1% in 2024 compared to 52.2% in 2023). The percentage of
overall revenue attributable to subhaul was approximately 67%
during the second quarter of 2024 – essentially unchanged from the
first quarter of this year - versus 66% for the comparable quarter
in 2023. The increase in salaries, wages and benefits compared to
2023 reflects a combination of driver compensation on higher
revenues in the 2024 period as well as new public company costs
that were part of the 2024 quarter. Specifically, stock
compensation expense of approximately $613,000 was recognized for
the period between the IPO and quarter end. Likewise, general and
administrative expenses for the 2024 period included approximately
$327,000 of public company costs including director compensation,
director and officer insurance premiums, and other legal and
exchange fees. Depreciation and amortization expense included $1.1
million of amortization of intangible assets resulting from the
business combinations consummated on May 13, 2024; there was no
comparable amortization during the second quarter of 2023.
Adjusted Operating Income and Adjusted Operating Ratio. Adjusted
operating income increased 19.4% year-over-year, or $1.4 million,
reflecting an approximate 90 basis point improvement in the
operating ratio (total operating expense divided by total revenue).
The ratio improvement was largely due to the decrease in purchased
transportation, as a percentage of revenue (110 basis points)
partially offset by increased general and administrative expenses
from public company costs.
Income before taxes. Income before taxes decreased by $258,000
year-over-year due to the combined result of the improved operating
ratio noted above offset by the addition of non-cash stock
compensation expense and amortization of intangible assets.
Adjusted EBITDA. Adjusted earnings before interest, taxes,
depreciation and amortization, and stock compensation expense
increased by approximately 3.2% in the second quarter of 2024
compared to the same period of 2023, almost entirely on the
strength of increased adjusted operating income described above.
Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue)
of 11.6% was improved by 20 basis points over the first quarter of
this year, but 30 basis points lower than the second quarter of
2023.
Summary Condensed Financial Information – Successor
(Proficient)
The tables below summarize the unaudited condensed consolidated
financial statements for the three months ended June 30, 2024, for
Proficient included in the Quarterly Report on Form 10-Q.
Three
Months Ended June 30, 2024
(in thousands, except per share
amounts)
Total operating revenue
$55,909
Total operating expenses
58,517
Operating loss
(2,608)
Net loss
(3,552)
Adjusted Earnings per Share, basic (1)
0.28
Adjusted Earnings per Share, diluted
(1)
0.28
Adjusted EBITDA (2)
8,731
_______________
(1)
Our management team reviews Adjusted
Earnings Per Share, a non-GAAP financial measure, a measure of the
company’s profitability that indicates how much after-tax profit
each outstanding share of common stock has earned. A non-GAAP
financial measure is generally defined as one that purports to
measure financial performance but includes adjustments that are not
included in the most comparable GAAP measure. See the Appendix for
additional information regarding the use of Adjusted EPS and a
reconciliation to the most comparable GAAP financial measure.
(2)
Our management team reviews Adjusted
EBITDA, a non-GAAP financial measure, to measure the operating
performance and financial condition of our business and to make
strategic decisions. A non-GAAP financial measure is generally
defined as one that purports to measure financial performance but
includes adjustments that are not included in the most comparable
GAAP measure. See the Appendix for additional information regarding
the use of Adjusted EBITDA and a reconciliation of Adjusted EBITDA
to net income.
Conference Call
The Company will host an investor conference call at 9:00 a.m.
EDT to discuss the results. Investors are invited to join the
conference call by registering through this link:
https://register.vevent.com/register/BI90b130544470456896539b6157a2a187
, once registered, you will receive a dial-in and a unique pin to
join the conference. You may also join the listen-only Webcast via
https://edge.media-server.com/mmc/p/x87snrdh .
About Proficient Auto Logistics
We are a leading non-union, specialized freight company focused
on providing auto transportation and logistics services. Through
the combination of five industry-leading operating companies in
conjunction with our IPO in May 2024, we operate one of the largest
auto transportation fleets in North America. We offer a broad range
of auto transportation and logistics services, primarily focused on
transporting finished vehicles from automotive production
facilities, marine ports of entry, or regional rail yards to auto
dealerships around the country.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, which statements involve substantial risks and uncertainties.
Forward-looking statements generally relate to possible or assume
future results of our business, financial condition, results of
operations, liquidity, plans and objectives. You can generally
identify forward-looking statements because they contain words such
as “may,” “will,” “should,” “expects,” “plans,” “anticipates,”
“could,” “intends,” “target,” “projects,” “contemplates,”
“believes,” “estimates,” “predicts,” “potential” or “continue” or
the negative of these terms or other similar expressions that
concern our expectations, strategy, plans or intentions. We have
based these forward-looking statements largely on our current
expectations and projections regarding future events and trends
that we believe may affect our business, financial condition and
results of operations. The outcome of the events described in these
forward-looking statements is subject to risks, uncertainties and
other factors described in the section entitled “Risk Factors” in
our Registration Statement on Form S-1 (333-278629) (the
“Registration Statement”), and elsewhere in the Registration
Statement. Accordingly, you should not rely upon forward-looking
statements as predictions of future events. We cannot assure you
that the results, events and circumstances reflected in the
forward-looking statements will be achieved or occur, and actual
results, events or circumstances could differ materially from those
projected in the forward-looking statements. Forward-looking
statements contained in this press release include, but are not
limited to, statements regarding: the economic conditions in the
global markets in which we operate; our ability to successfully
implement our business strategy, effectively respond to changes in
market dynamics and customer preferences, and achieve the
anticipated benefits and associated cost savings of such strategies
and actions; our ability to recruit and retain qualified driving
associates, independent contractors and third-party auto
transportation and logistics companies; an increase in the
frequency or severity of accidents or other claims; our
expectations regarding the successful implementation of the
Combinations; geopolitical developments and additional changes in
international trade policies and relations; the effect of any
international conflicts or terrorist activities, on the United
States and global economies in general, the transportation
industry, or us in particular, and what effects these events will
have on our costs and the demand for our services; our ability to
manage our network capacity and cost structure for capital
expenditures and operating expenses, and match it to shifting and
future customer volume levels; our ability to compete effectively
against current and future competitors; our ability to maintain our
profitability despite quarterly fluctuations in our results,
whether due to seasonality, large cyclical events, or other causes;
and our future financial and operating results; our expectations
regarding the period during which we will qualify as an emerging
growth company under the JOBS Act; and our use of the net proceeds
from the IPO and the sufficiency of our existing cash to fund our
future operating expenses and capital expenditure requirements.
The forward-looking statements made in this document relate only
to events as of the date on which the statements are made. We
undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated
events. We may not actually achieve the plans, intentions or
expectations disclosed in our forward-looking statements and you
should not place undue reliance on our forward-looking statements.
We do not assume any obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
Appendix
Non-GAAP Financial Measure
We report our financial results in accordance with accounting
principles generally accepted in the United States (“GAAP”).
However, management believes that EBITDA provides useful
information in measuring our operating performance, generating
future operating plans and making strategic decisions regarding
allocation of capital. Management believes this information
presents helpful comparisons of financial performance between
periods by excluding the effect of certain non-recurring items.
Adjusted EBITDA
Adjusted EBITDA does not have a standardized meaning prescribed
by GAAP and therefore it may not be comparable to similarly titled
measures presented by other companies, and it should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP.
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.
The following table provides a reconciliation of net income, the
most closely comparable GAAP financial measure, to EBITDA for
Proficient:
Three Months Ended
June 30,
(in thousands)
2024
Proficient (Successor)
Net loss
$
(3,552
)
Interest expense
640
Income tax expense
470
Depreciation and amortization expense
4,497
Stock compensation expense
6,676
Adjusted EBITDA
$
8,731
Adjusted EPS
Adjusted EPS does not have a standardized meaning prescribed by
GAAP and therefore it may not be comparable to similarly titled
measures presented by other companies, and it should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP.
Adjusted EPS is defined net income (loss) net of intangible
amortization and expense and stock compensation expense per common
share computed using the weighted average number of common shares
outstanding during the period. Diluted adjusted net income (loss)
net of intangible amortization and expense and stock compensation
expense per common share is computed using the weighted average
number of common stock and common stock equivalent shares
outstanding during the period.
The following table provides a reconciliation of net income, the
most closely comparable GAAP financial measure, to Adjusted EPS for
Proficient:
Three Months Ended
June 30,
(in thousands, except per share
amounts)
2024
Proficient (Successor)
Net loss
$
(3,552
)
Intangible amortization expense
1,076
Stock compensation expense
6,676
Adjusted Net Income
$
4,200
Adjusted Earnings per Share, basic (2)
$
0.28
Adjusted Earnings per Share, diluted
(2)
$
0.28
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version on businesswire.com: https://www.businesswire.com/news/home/20240809132237/en/
Investor Relations: Brad Wright Chief Financial Officer and
Secretary Phone: 904-506-4317 email:
Investor.relations@proficientautologistics.com
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