Proficient Auto Logistics Reports First Quarter 2024 Financial Results
Proficient Auto Logistics (NASDAQ: PAL) reported its Q1 2024 financial results. Operating income rose 7.9% to $6.54 million, income before taxes increased by 12.1% to $5.35 million, and EBITDA grew 1.8% to $10.86 million. Despite a 4.6% decline in revenue before fuel surcharge to $91.04 million, total operating expenses fell 7.5%, leading to an improved operating ratio of 93.2%. The company completed its IPO and the acquisition of five founding companies on May 13, 2024. While fuel surcharge reimbursements decreased by 35%, total unit deliveries increased by 2% year-over-year. Additionally, Proficient Transport, the accounting predecessor, reported net income of $1.19 million on $27.83 million in operating revenue.
- Operating income rose 7.9% to $6.54 million.
- Income before taxes increased by 12.1% to $5.35 million.
- EBITDA increased by 1.8% to $10.86 million.
- Operating ratio improved to 93.2% from 94.1%.
- Total operating expenses decreased by 7.5%.
- Total unit deliveries increased by 2% year-over-year.
- Average revenue per unit delivered increased from $180 to $184.
- Revenue before fuel surcharge declined by 4.6% to $91.04 million.
- Fuel surcharge reimbursements decreased by 35%.
- Proficient Auto Logistics reported a net loss of $310,000 for Q1 2024.
- Proficient Transport's operating income decreased from $2.93 million to $2.03 million year-over-year.
- Proficient Transport's net income decreased from $1.96 million to $1.19 million year-over-year.
Insights
Proficient Auto Logistics reported solid
From a financial health perspective, the company's
Investors should note the management's strategic focus on improving operational efficiency through reducing empty miles and increasing the owned fleet. These initiatives aim to enhance profitability in the long term. However, the near-term impact could be mixed as the company integrates the five Founding Companies and executes these plans.
Despite a small net loss for Proficient Auto Logistics alone, the company's overall improved efficiency and cost management are positive indicators for future performance.
The completion of the IPO and the acquisition of five companies positions Proficient Auto Logistics for potential long-term growth. The company's strategy to capitalize on synergies from these acquisitions and streamline operations indicates a clear path to enhancing value.
The rise in operating income and the improved operating ratio signify effective cost management, which is important in the logistics sector. The increase in units delivered by
It's also worth noting the company's efforts to implement activity-based costing systems. These efforts are geared towards optimizing pricing and profitability, which could yield significant benefits over time. Investors should watch how these operational initiatives translate into financial performance in future quarters.
However, the decline in revenue due to lower fuel surcharges and domestic OEM demand could be a risk if these factors persist longer than anticipated. Also, the lack of pro forma financial data means investors need to closely monitor future earnings reports for a more comprehensive picture.
The first-quarter financial results reveal how Proficient Auto Logistics is navigating operational challenges and capitalizing on acquisition synergies. The improvement in the
The company's focus on reducing empty miles is a strategic move to enhance operational efficiency. Empty miles represent unproductive mileage where trucks return empty after a delivery, increasing costs without adding revenue. Reducing these can significantly improve margins in logistics.
Furthermore, the company's plan to increase the owned fleet to reduce dependency on purchased transportation is crucial. This move can lead to better cost control and greater flexibility in operations. The decline in purchased transportation costs by
However, the reduced demand from OEMs due to the labor strikes presents a cautionary tale. While Proficient managed to increase unit deliveries by
On May 13, 2024, Proficient completed the initial public offering (the “IPO”) of its common stock. Prior to the IPO, Proficient had entered into agreements to acquire in multiple, separate acquisitions (the “Combinations”) five operating businesses and their respective affiliated entities, as applicable, operating under the following names: (i) Delta Auto Transport, Inc. (“Delta”), (ii) Deluxe Auto Carriers, Inc. (“Deluxe”), (iii) Sierra Mountain Group, Inc. (“Sierra”), (iv) Proficient Transport, and (v) Tribeca Automotive Inc. (“Tribeca” and, together with Delta, Deluxe, Sierra, and Proficient Transport, the “Founding Companies”). On May 13, 2024, in connection with the closing of the IPO, Proficient also completed the acquisitions of all the Founding Companies.
Highlights (all on a combined basis)
Operating Income of
Income before taxes of
Operating Ratio of
Total Units delivered of 460,210 in 2024, an increase of
“We are excited that our five founding companies have successfully completed their combination and IPO and have begun operating as one combined company,” said Rick O’Dell, Proficient’s chief executive officer. “Despite the labor strikes at two of our largest customers in late 2023, our founding companies turned in a solid first quarter and we look forward to more normalized manufacturing levels and industry tailwinds supporting our growth going forward.”
“Upon the closing of the IPO and Combinations, the Company immediately initiated the execution of its identified key operating initiatives, which include:
- Achieving cost synergies afforded by enhanced scale;
- Reducing empty miles – increasing utilization – in overlapping geographies;
- Increasing owned fleet to reduce suboptimal purchased transportation;
- Increasing marketing to used car and fleet operations, further reducing empty miles;
- Implementing activity-based costing systems to ensure optimum pricing and profitability.
While these operating initiatives will be long-term and ongoing in nature, the financial impact of each should become evident over the coming quarters, which we will highlight in our future communications.”
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 months ended, March 31, 2024 for each of Proficient and Proficient Transport are included in the Quarterly Report on Form 10-Q. The Company is not required to provide, and the Quarterly Report on Form 10-Q does not contain, pro forma financial data giving effect to the completion of the Combinations and the completion of the IPO and the use of the proceeds therefrom. However, the Company is providing summary unaudited combined financial information for the three months ended March 31, 2024 below. The summary unaudited combined financial information has been prepared by, and are 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 opinion or any other form of assurance with respect thereto.
Summary Unaudited Combined Financial Information
Dollars in 000’s |
|
Three Months Ended March 31, |
||||
|
2024 |
|
2023 |
|||
Revenue before Fuel Surcharge |
|
$ |
91,036 |
|
$ |
95,416 |
Fuel surcharge and reimbursements |
|
|
4,520 |
|
|
6,929 |
Total Operating Revenue |
|
$ |
95,556 |
|
$ |
102,345 |
Total Operating Expenses |
|
|
89,018 |
|
|
96,283 |
Total Operating Income |
|
|
6,539 |
|
|
6,062 |
Operating Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes |
|
|
5,352 |
|
|
4,775 |
Add Back: |
|
|
|
|
||
Depreciation and Amortization |
|
|
4,324 |
|
|
4,605 |
Interest Expense |
|
1,187 |
|
1,287 |
||
EBITDA (1) |
|
$ |
10,863 |
|
$ |
10,667 |
EBITDA Margin |
|
|
|
|
|
|
(1) |
Our management team reviews 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 EBITDA. |
The prospectus filed in connection with our IPO that closed on May 13, 2024 included preliminary combined operating results for the three months ended March 31, 2024 based on the information that was available at that time. Those results were stated as a range of possible results, rather than specific amounts, because our financial account closing procedures were not yet complete at the time of the filing. The amounts shown above reflect the unaudited summary combined financial results following the completion of account closing procedures and include certain reclassifications made in the completion of those procedures. It should be noted that the amounts shown above include the combined operating results of the five Founding Companies without any pro forma adjustments that would give effect to the completion of the IPO or any related expenses or adjustments recognized as a result of the IPO and concurrent Combinations. The results of Proficient are also not included in the amounts shown above for the three months ended March 31, 2024 as there were no comparative results for the three months ended March 31, 2023 and the expenses incurred by Proficient in the first quarter of 2024 were solely for the purpose of affecting the IPO and related transactions rather than operating in nature.
Revenue before Fuel Surcharge. Revenue before Fuel Surcharge declined
Fuel Surcharge and reimbursements. Fuel Surcharge and reimbursements declined
Total Operating Expenses. Total operating expenses declined by
Total Operating Income and Operating Ratio. Despite the decline in revenue during the first quarter of 2024, operating income increased
Income before taxes. Income before taxes increased by
EBITDA. Earnings before interest, taxes, depreciation and amortization increased by approximately
___________________
Summary Condensed Financial Information – Accounting Acquiror (Proficient) and Accounting Predecessor (Proficient Transport)
The tables below summarize the unaudited condensed consolidated financial statements for the three months ended, March 31, 2024 for each of Proficient and Proficient Transport as included in the Quarterly Report on Form 10-Q.
| Three Months Ended | ||
| March 31. | ||
2024 |
2023 |
|
| (in thousands) | ||
| Proficient Auto Logistics | ||
| Total expenses |
|
-- |
| Net loss | (310) |
-- |
| Loss per share |
( |
-- |
| Proficient Transport | ||
| Total operating income |
|
|
| Total operating expenses | 25,801 |
31,323 |
| Total operating income | 2,025 |
2,930 |
| Net Income | 1,185 |
1,962 |
| EBITDA (1) | 2,665 |
3,521 |
______________ |
|
(1) |
Our management team reviews 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 EBITDA and a reconciliation of EBITDA to net income. |
Conference Call
The Company will host a conference call to discuss first quarter 2024 financial results today at 9:00 AM EDT. To join the investor conference call please register through this link: https://register.vevent.com/register/BIdd40ce9adc75493abf9a39f9d270fb13, 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/fh6ej9ww.
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
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 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
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.
EBITDA is defined as net income (loss) for the period adjusted for interest expense, net, income tax expense (benefit) and depreciation and amortization expense.
The following table provides a reconciliation of net income, the most closely comparable GAAP financial measure, to EBITDA for Proficient Transport:
|
Three Months Ended March 31, |
||||
|
2024 |
2023 |
|||
Proficient Transport |
|
|
|||
Net income |
$ |
1,184,632 |
$ |
1,961,621 |
|
Interest expense |
|
452,390 |
|
261,944 |
|
Income tax expense |
|
388,878 |
|
706,430 |
|
Depreciation and amortization expense |
|
639,337 |
|
590,656 |
|
EBITDA |
$ |
2,665,237 |
$ |
3,520,651 |
|
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Investor Relations:
Brad Wright
Chief Financial Officer and Secretary
Phone: 904-506-4317
email: Investor.relations@proficientautologistics.com
Source: Proficient Auto Logistics, Inc.
FAQ
What were Proficient Auto Logistics' operating income and income before taxes for Q1 2024?
Did Proficient Auto Logistics complete any significant transactions in May 2024?
How did Proficient Auto Logistics' revenue before the fuel surcharge fare in Q1 2024?
What was the decline in Proficient Auto Logistics' fuel surcharge reimbursements for Q1 2024?
How much did Proficient Transport's net income change year-over-year for Q1 2024?
What was the operating ratio for Proficient Auto Logistics in Q1 2024?
