Proficient Auto Logistics, Inc.

Good day, and thank you for standing by. Welcome to the Proficient Auto Logistics first quarter financial information conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brad Wright, Chief Financial Officer. Please go ahead.

Thank you, and good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us on our first quarter 2025 earnings call. Under SEC rules, our Form 10Q covering the three-month periods ending March 31, 2025 and 2024 will include financial statements for both the predecessor accounting entity, Proficient Auto Transport, and the successor entity, Proficient Auto Logistics, Inc. We are not required to provide in the form 10Q will not contain pro forma financial data for the combined companies. However, our earnings release provides comparative summary combined financial information for the first quarter 2025 to the three-month periods ending December 31, 2024 and March 31, 2024 for the combined companies. Our earnings release can be found under the investor relations section of our website at proficientautologistics.com. Our 10-Q, when filed, can also be found under the investor relations section of our website. During this call, we will be discussing certain forward-looking information. This information is based on our current expectations, and it is not a guarantee of future performance. I encourage you to review the cautionary statement in our earnings release describing factors that could cause actual results to differ from those expressed by our forward-looking statements. Further information can be found in our SEC filings. During this call, we may also refer to measures that include adjusted operating income, adjusted operating ratio, EBITDA, and adjusted EBITDA. Please refer to the portions of our earnings release that provide reconciliations of those profitability measures to gap measures, such as operating earnings and earnings before income taxes. Joining me on today's call are Rick Odell, Proficient's Chairman and Chief Executive Officer, and Amy Rice, our President and Chief Operating Officer. We'll provide a company update as well as an overview of the company's combined results for the first quarter. After our prepared remarks, we'll open the call to questions. During the Q&A, please limit yourself to one question plus one follow-up. You can then get back into the queue if you have additional questions. Now, I'd like to introduce Rick Odell, who will provide the company update.

Thank you, Brad, and good afternoon, everyone. I'll start with an overview of our operations during the first quarter and some trends that provide insight into our expectations for future quarters. The first quarter of this year was characterized by two different portions. January through mid-February was a period of unusually low volume, continuing weak revenue per unit, and disruptive weather. January unit volume was up 1% versus January of 2024. The revenue for the combined group, which included ATG this year and excluded ATG last year, was lower by 17.3% year over year. Through mid-February, when we spoke to you regarding our fourth quarter of 2024, year-to-date revenue was still off by approximately 17.5% versus the fourth quarter of the prior year. However, you will recall that we alluded to expectations for a stronger March enabled by new contract visibility at the time that would produce a full first quarter that was essentially in line with the fourth quarter of 2024. from both the revenue and profitability standpoint. As you saw in our earnings release, that is in fact where we ended up with revenue adjusted operating ratio and adjusted EBITDA substantially similar to fourth quarter of 2024. March proved to be a strong month for deliveries with our unit volume 17% higher than the same month of 2024 and revenue up by 11% versus March of 2024 which did not include ATG. Industry sales were particularly strong in March with auto SAR reaching 17.8 million units, the highest monthly mark since April of 2021. By comparison, the National Auto Dealers Association reported SAR of 15.6 million for January and 16 million for February. Most industry observers attribute the increased sales volume in March to a pull forward of sales driven by the expected 25% tariffs in early April on imported automobiles announced by the current administration. April auto sales and deliveries started very strong on the same basis, but industry data seems to indicate a decelerating sales trend through the month of April, which carried into May. Automotive services and technology company Cox Automotive estimates that April SAR ended at approximately $16.4 million. In turn, we saw a very strong April, though we're seeing moderation in transportation volume, especially from imported vehicles. The economic impact of tariffs, both on our customers and the ultimate consumer, and the uncertainty of additional policy changes has meaningfully impacted the outlook for 2025 with respect to auto demand and the shifting automotive supply chain. During April, analysts at Goldman Sachs cut their full-year projected SAR to 15.4 million units, down from 16.3 million previously. Cox Automotive and Morningstar have reduced their forecast to 15.6 million and 15.5 million, respectively. Morgan Stanley and Global Data have posted fair case scenarios of 15 million and 14.9 million respectively, which we hope will be avoided with recent relief on the stacking of automotive tariffs. Obviously, the strength of the consumer economy will also be a key factor. Our OEM customers are dealing with this economic uncertainty and the prospect of significantly increased costs relative to their expectations in real time. They're making decisions about where their production occurs and whether to curtail imports, both on a near-term and a structural basis. Their decisions on these critical issues will have a significant bearing on the environment that Proficient will navigate over the remainder of 2025. That being said, we're confident in our network's capability to assist with these changing needs. Even as we assess the impact of these industry headwinds, Perficient remains focused on our long-term objectives, including continued increases in our market share and the effective integration of our merged operating companies, driving improved efficiency, providing high-quality service, and improved profitability. As we've reported in the past communications, Perficient gained significant new business during the first quarter of this year, that we expect will contribute as much as $60 million to our top line on an annual basis. Our national footprint proved its value during the onboarding of these new commitments, flexing the breadth of our sub-haul channel and enabling this transfer of surplus revenue-generating equipment and drivers to new volume without impacting existing business elsewhere in our network. In the event that overall industry demand for auto hauling services remains weak, we anticipate that there could be additional financial stress on undercapitalized industry participants. Perficient will protect its strong balance sheet position and focus on efficiently serving customers and will capitalize on market share opportunities as they are presented. We were also pleased to announce the closing of the acquisition of Brothers Auto Transport on April 1st. This strategic addition increases our presence and density in the Northeast and Mid-Atlantic regions and provides new load sharing opportunities and other efficiencies to our existing operations. The introduction of Brothers operations has gone smoothly with seamless service for our new customers there and the integration effort is moving much more quickly than prior acquisitions as we have solidified systems, process, and structure in our organization. In addition to our previously merged six companies being on the common transportation management system, Brothers Auto Transport will be converted to this technology during the second quarter. All companies, including Brothers, will be using our common accounting and reporting system by July 1st as well. I'll now turn it over to Brad to cover some key financial highlights.