Proficient Auto Logistics, Inc.

Good day, and thank you for standing by. Welcome to the Proficient Auto Logistics Second 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 this 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.

Good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us on Proficient's second quarter 2025 earnings call. Under SEC rules, our Form 10Q covering the three and six-month periods ending June 30, 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, and the Form 10-Q will not contain, pro forma financial data for the combined companies. However, our earnings release provided comparative summary combined financial information for the second quarter of 2025 to the three-month periods ending March 31, 2025, and June 30, 2024 for the combined companies. Our earnings release can be found under the investor relations section of our website at proficientautologistics.com. Our 10Q and filed can also be found under the investor relations section of our website. During this call, we'll be discussing certain forward-looking information. This information is based on our current expectations and 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 the forward-looking statements. Further information can be found in our SEC filings. During this call, we may also refer to non-GAAP 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 will provide a company update as well as an overview of the company's combined results for the second 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. Then you can get back into the queue if you have additional questions. Now, I would 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 second quarter and some trends that provide insight into our expectations for the back half of 2025. First, as it relates to the second quarter, as we discussed in our last journeys call, The market strength we experienced at the end of Q1 continued into April, producing a record revenue month for the company, with revenue and unit volumes in the month up 13% and 25%, respectively, year over year. While the market decelerated in May and June, with autosar slowing to an average around 15.5 million units, and our expectations had been for sequentially decelerating performance in each month of the quarter, our unit volumes were bolstered by market share gains and the Brothers acquisition, such that June did not decelerate from May and revenue performance finished above our expectations. For the combined May and June months, volume finished up 24% year over year, while revenue was up nearly 14% versus the same period of 2024. The combined results produced a record revenue quarter for the company and improved profitability sequentially. Notably, the adjusted operating income for the second quarter was greater than the prior three quarters combined, demonstrating operational improvements and strategic execution in what has been an uncertain environment. July auto sales and deliveries were stronger than expected, which was reflected in July SAR of $16.4 million as compared to industry forecasted expectations that were similar to what we saw in May and June of this year. While there's typically a seasonal aspect to July in which many OEMs elect to close plants for one or two weeks, many domestic plants have continued to operate to meet the higher demand for U.S.-based production. We're again pleased with PAL's July volume and revenue performance relative to expected levels. SAR forecasts remain cautious for the balance of the year. However, the economic impacts of tariffs and policy changes both to our customers and the ultimate consumer, are becoming clearer with the announcement of trade agreements. We view both removal of policy uncertainty and averted worst-case high-cost outcomes as a relative positive for the near-term go-forward. Prior OEM shipping holds and delays in bid processes have returned to a more normal cadence with tariff policy resolution provides a more stable environment for us to go to market and benefits our ability to execute our strategy and achieve further meaningful margin improvements. Additionally, favorable tax policy for qualifying car loan interest deductions, a higher likelihood of interest rate reductions over the balance of the year, healthy dealer inventory levels, and an average age above historical norms for replacement represent factors that should support stable consumer demand. 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 and profitability. From a commercial perspective, there are several OEMs in the midst of scheduled regional or national bid processes, with a meaningful amount of new vehicle volume to be decision across the OEM landscape over the remainder of this year. giving line of sight to revenue levels that will allow for ongoing margin expansion efforts. In the quarter, we successfully retained a number of important OEM contracts at flat to up pricing levels. The precise impact on the revenue of these additions is dependent on the volume ultimately generated by the respective OEMs, but our coverage network and quality service is being further validated in the marketplace. While automotive OEMs face cost pressure, as widely reported in their Q2 earnings releases, PAL is an important component in the transportation supply chain, and we will continue to partner with customers to serve their needs with industry-leading quality. Our commitment to service excellence was recently recognized by Toyota Logistics Services with their 2025 Quality Award for finished vehicle logistics. I'd like to thank our team and channel partners for their efforts in achieving this award, even as we continue to integrate our companies and further strengthen our capabilities. The integration of Brothers acquired at the beginning of Q2 has gone smoothly and is now largely complete, with seamless service for our customers throughout. All operating companies, including Brothers, are now using our common accounting platform and transportation management system providing key visibility and actionable insights into our customer base, operating efficiency opportunities, and profitability. In the second quarter, we successfully shifted a higher portion of our volume onto company trucks, which will continue to aid profitability, as the majority of fixed costs support our asset-based business. Sister hauls or load sharing between the merged companies grew to 9% of revenue in the quarter from 8% in the prior quarter, reducing empty miles, and further improving our asset utilization. As we look ahead, we have more work to do to control costs in a base market that continues to be weaker than expected coming into 2025. We'll further optimize new business added to the network as we move beyond the startup phase. While we evaluate our business on a composite and regional basis, we do have three of our seven operating companies already operating at a 90 adjusted OR or better. We're in the process of advancing targeted cost savings initiatives and operating efficiencies that will bring the blended operation to that level over time, while preserving the ability to scale up via share gains and acquisitions. I'll now turn it back to Brad to cover key financial highlights.