Proficient Auto Logistics, Inc.

Good day, everyone, and welcome to Proficient Autologistics Third Quarter Financial Information. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note that this conference is being recorded. Now it's my pleasure to turn the call over to the Chief Financial Officer, Brad Wright. Please proceed.

Good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us on Proficient's third quarter 2025 earnings call. Under SEC rules, our Form 10Q, covering the three and nine-month periods ending September 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 10Q will not contain pro forma financial data for the combined companies. Our earnings release provides comparative summary financial information for the third quarter of 2025 to the third quarter of 2024 for the company. It can be found under the investor relations section of our website at proficientautologistics.com. Our 10Q, 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 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 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 O'Dell, 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 third quarter. After our prepared remarks, we will open the call to questions. During the Q&A, please limit yourself to one question plus one follow-up. You may then get back into the queue if you have additional questions. Now, I would like to introduce Rick O'Dell, who will provide the company update.

Well, thank you, Brad, and good afternoon, everyone. I'll start with an overview of our operations during the third quarter and some trends that provide insight into our expectations for the remainder of this year. First, as it relates to the third quarter, as we discussed in our last earnings call, July auto sales and deliveries were stronger than had been expected with SAR finishing at 16.4 million units. And while sequentially lower consistent with seasonality, August and September SAR were stronger year over year at an average of 16.3 million units driven in part by a surge in EV purchases ahead of the expiration of federal tax credits. Company revenue and unit volumes in the quarter largely followed these trends and were further bolstered by market share gains and the brothers' acquisition, finished up 21% and 25% respectively year over year for the quarter. The combined results nearly matched the revenue produced in the second quarter of this year and again improved profitability sequentially. and improved 250 basis points year over year, demonstrating continued momentum and operational improvements and strategic execution. From a market perspective, volatility in automotive manufacturing and purchase levels continues, reflecting production disruption due to supply chain issues and economic impacts of the expiring EV tax credit, interest rate adjustments, and tariffs. While automotive OEMs continue to face cost pressure from tariffs, as widely reported in their Q3 earnings releases, Powell continues to provide critical infrastructure in the transportation supply chain, and we have the ability to be nimble to serve customer needs as they make necessary shifts. The pricing environment is not as strong as we'd like to see. However, we continue to show discipline in our pursuit of new business, and retention of incumbent business to ensure that our portfolio allows for sustainable profitability and reinvestment. We're confident that we can be successful in achieving growth and margin expansion despite complexities in the market. Looking to the fourth quarter, October SAR slowed to $15.3 million, and we are feeling this softness on volumes. SAR forecasts are for high 15 to low 16 million range for the balance of this year and into next year. With dealer inventory levels healthy, along with favorable tax policy for qualifying car loan interest deductions, a high likelihood of continued interest rate reductions, an average vehicle age above historical norms for replacement, and a typical seasonal increase in buying at the end of the year, we're hopeful that volumes strengthen through the balance of the fourth quarter but we expect a modestly lower revenue outcome than the third quarter, and we expect to achieve similar adjusted operating ratio and cash flow. With regard to profitability, as I referenced in the second quarter earnings call, we remain focused on controlling costs and advancing targeted cost savings initiatives and operating efficiencies that produce sustainable benefits. In the third quarter, we recognize a $1.9 million restructuring charge representing approximately $0.06 per share, which is primarily composed of one-time headcount and facility consolidation resulting from organizational realignment, as well as fees associated with the consolidation of casualty insurance coverage for all operating companies. In total, we expect to realize over $3 million in annual savings from the combined restructuring actions going forward, though much of this begins in 2026. Note that under our new insurance program, we have a larger retention consistent with a company of our size, and there may be greater quarter to quarter volatility in the insurance and claims expense line going forward, reflecting frequency and severity of any accidents and injuries that do occur. That being said, we do anticipate annual savings in our annual insurance expense. In addition to these items, we continue to leverage our national scale to drive cost synergies through our procurement efforts. While our now unified accounting and transportation management systems are increasingly providing visibility and actionable insights into our customer base, operational efficiency opportunities, and profitability. As evidence of this continued progress, sister halls or load sharing between the merged companies grew to 11% of revenue in the quarter from 9% in the prior quarter, reducing empty miles and contributing to improved asset utilization. As we look ahead, we're well-positioned to operate profitably with strong cash flow in the current environment and to respond quickly and efficiently when the market improves. The company will continue to protect its strong balance sheet position and advance our strategic objectives for continued margin expansion, market share gains, and acquisitions. I'll now turn it back over to Brad to cover key financial highlights. Thank you, Rick.