Proficient Auto Logistics, Inc.

Hello and thank you so much for standing by. My name is AP and I will be your conference operator today. At this time, I would like to welcome everyone to the proficient auto logistics first quarter financial information. All lines have been placed on mute to prevent any background noise. After the speaker's remark, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again, and we can only do one question and one follow-up. Thank you. And I would like now to turn the call over to 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 for Proficient's first quarter 2026 earnings call. Earlier this afternoon, we issued our earnings release, which provides comparative financial information for the first quarter of 2026 to the first quarter of 2025 for the company. It can be found under the investor relations section of our website at proficientautologistics.com. Our 10-Q, when filed, will 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 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 GAAP 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 first quarter of 2026. After our prepared remarks, we will open the call to questions. During the Q&A, please limit yourself to one question and one follow-up. You can get back into the queue if you have additional questions. Now, I'll turn the call over to Rick O'Dell, 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. As we announced in early March, the first two months of the quarter were affected by extended automotive plant shutdowns, weaker than expected industry SAR, severe winter weather, and a slow recovery of the rail and sea transportation pipelines that feed our network. These factors constrained volumes and resulted in volume trends improved in March, the revenue gap for the full quarter finished less than 2% below Q1 of 2025. Meaningfully higher diesel fuel prices and the timing lag associated higher fuel surcharge recoveries created a material unplanned cost and margin headwind in the month of March versus our expectations. Combination of these factors materially impacted our reported bottom line results and profitability our focus remains on execution and resilience in challenging market conditions. Looking to the second quarter, recent trends indicate more stable volume levels supported by seasonal strengthening, improved weather, dealer inventory, and strong tax refunds. While automotive SAR comparisons year-over-year are challenged by peak levels seen last year, with tariff demand full forward, April SAR is expected to finish at 16.1 million units marking two consecutive months above $16 million, following March's $16.3 million result. The rebound in volumes in March and April made capacity tightening more evident, exposing underlying supply loss that had previously been less visible. Supply losses appear to be driven by a combination of factors, including financial pressure from low volume, compounded by relatively weaker rates, increased relative scrutiny, or regulatory scrutiny, and driver migration towards other forms of trucking as the broader trucking rates have improved. At the same time, supply conditions have increased spot market opportunities. When spot opportunities increase but supply is constrained, third-party capacity is drawn away from participation in contracted freight, particularly with the sub-holler population, which shifts toward higher paying rates. As a result, we are observing contracts having been awarded at low market rates over the last 6 to 12 months that have struggled to secure consistent capacity with seasonal volume return, and in several instances leading to redistribution at market-level economics. This is clearly a turning point in the automobile market. Equally important automotive OEM financial performance which should help ease some of the cost pressures the OEMs have been managing. When combined with the capacity dynamics, this should contribute to a more balanced pricing market environment, and OEMs attempting to hold rates below prevailing market levels may experience reduced fulfillment or need to rebid lanes at the higher market levels. We continue to show discipline in our pursuit of new business and retention of incumbent business to ensure that our portfolio allows profitability and reinvestment while we're not immune to the driver supply challenges we're hiring aggressively to fill open trucks and are confident that we can be successful in achieving growth and achieving growth over time despite the complexities in the market company has a strong balance sheet position will advance our strategic objectives for continued margin expansion market share gains and acquisitions I'll now turn it back