Q2 2026 Proficient Auto Logistics Inc Earnings Call

August 10, 2026

Operator: 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Brad Wright, Chief Financial Officer. Please go ahead.

Speaker #1: 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 when one of your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star when one again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your speaker today, Brad Wright, Chief Financial Officer. Please go ahead.

Speaker #2: Good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us for Proficient's second quarter 2026 earnings call.

Brad Wright: Good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us for Proficient's Q2 2026 earnings call. Earlier this afternoon, we issued two press releases. One detailing our Q2 2026 financial results, and a second announcing our definitive agreement to acquire Hansen & Adkins, as well as some financing transactions. We have also posted on our website an investor presentation that accompanies today's discussion. Press releases and the presentation materials can be found under the investor relations section of our website at proficientautologistics.com. Our 10-Q and files 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.

Brad Wright: Good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us for Perficient's Q2 2026 earnings call. Earlier this afternoon, we issued two press releases. One detailing our Q2 2026 financial results, and a second announcing our definitive agreement to acquire Hansen & Adkins, as well as some financing transactions. We have also posted on our website an investor presentation that accompanies today's discussion. Press releases and the presentation materials can be found under the investor relations section of our website at proficientautologistics.com. Our 10-Q and files can also be found under the investor relations section of our website. During this call, we will be discussing certain forward-looking information.

Speaker #2: Earlier this afternoon, we issued two press releases. One detailed our second quarter 2026 financial results, and the other announced our definitive agreement to acquire Hanson & Adkins, as well as some financing transactions.

Speaker #2: We have also posted on our website an investor presentation that accompanies today's discussion. Press releases and the presentation materials can be found under the Investor Relations section of our website at proficientautologistics.com.

Speaker #2: 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.

Speaker #2: 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 two press releases describing factors that could cause actual results to differ from those expressed by the forward-looking statements.

Brad Wright: 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 the two press releases 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 an explanation of how we compute these non-GAAP financial measures and reconciliations of those profitability measures to the most comparable GAAP measures.

Brad Wright: I encourage you to review the cautionary statement in the two press releases 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 an explanation of how we compute these non-GAAP financial measures and reconciliations of those profitability measures to the most comparable GAAP measures. 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 Q2 2026, and an overview of the strategic rationale for the acquisition.

Speaker #2: 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.

Speaker #2: Please refer to the portions of our earnings release that provide an explanation of how we compute these non-GAAP financial measures and reconciliations of those profitability measures to the most comparable GAAP measures.

Speaker #2: Joining me on today's call are Richard 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 second quarter of 2026, and an overview of the strategic rationale for the acquisition.

Brad Wright: 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 Q2 2026, and an overview of the strategic rationale for the acquisition. After our prepared remarks, we will open the call to questions. During Q&A, please limit yourself to one question plus one follow-up. You can get back into the queue if you have additional questions. Now, I would like to introduce Rick O'Dell for opening comments.

Speaker #2: After our prepared remarks, we will open the call to questions. During Q&A, please limit yourself to one question plus one follow-up. You can get back into the queue if you have additional questions.

Brad Wright: After our prepared remarks, we will open the call to questions. During Q&A, please limit yourself to one question plus one follow-up. You can get back into the queue if you have additional questions. Now, I would like to introduce Rick O'Dell for opening comments.

Speaker #2: Now, I would like to introduce Rico Dell for opening comments.

Speaker #3: Thank you, Brad, and good afternoon, everyone. Before discussing our second quarter results, I want to begin with the acquisition announcement we to announce our agreement to acquire Hanson & Adkins, a founder-built business with more than 30 years of history, a strong reputation for service, deep relationships with leading OEM customers, and broad talent throughout the organization.

Richard D. O'Dell: Thank you, Brad, and good afternoon, everyone. Before discussing our Q2 results, I want to begin with the acquisition announcement we shared today. We are excited to announce our agreement to acquire Hansen & Adkins, a founder-built business with more than 30 years of history, a strong reputation for service, deep relationships with leading OEM customers, and broad talent throughout the organization. I would like to recognize Steve Hansen and Louie Adkins for building one of the most respected operators in our industry, and also welcome the Hansen & Adkins employees and our carrier partners. Their collective commitment to safety, customer service, and operational excellence has been central to the company's success and is a key reason we are so enthusiastic about this transaction. We believe this acquisition represents a compelling strategic and financial opportunity.

Rick O'Dell: Thank you, Brad, and good afternoon, everyone. Before discussing our Q2 results, I want to begin with the acquisition announcement we shared today. We are excited to announce our agreement to acquire Hansen & Adkins, a founder-built business with more than 30 years of history, a strong reputation for service, deep relationships with leading OEM customers, and broad talent throughout the organization. I would like to recognize Steve Hansen and Louie Adkins for building one of the most respected operators in our industry, and also welcome the Hansen & Adkins employees and our carrier partners. Their collective commitment to safety, customer service, and operational excellence has been central to the company's success and is a key reason we are so enthusiastic about this transaction.

Speaker #3: I'd like to recognize Steve Hanson and Louis Adkins for building one of the most respected operators in our industry and also welcome the Hanson & Adkins employees and our carrier partners.

Speaker #3: Their collective commitment to safety, customer service, and operational excellence has been central to the company's success and is a key reason we're so enthusiastic about this transaction.

Speaker #3: We believe this acquisition represents a compelling strategic and financial opportunity. Upon closing, the combined organization will benefit from greater scale, expanded geographic coverage, enhanced network density, and broader capabilities to support our customers across North America.

Rick O'Dell: We believe this acquisition represents a compelling strategic and financial opportunity. Upon closing, the combined organization will benefit from greater scale, expanded geographic coverage, enhanced network density, and broader capabilities to support our customers across North America. We also see opportunities to improve asset utilization, create operating efficiencies, and strengthen the earnings power of the business over time. Importantly, both companies share a similar culture and a commitment to safe, reliable execution, which we believe will support successful integration over the coming months and long-term value creation.

Richard D. O'Dell: Upon closing, the combined organization will benefit from greater scale, expanded geographic coverage, enhanced network density, and broader capabilities to support our customers across North America. We also see opportunities to improve asset utilization, create operating efficiencies, and strengthen the earnings power of the business over time. Importantly, both companies share a similar culture and a commitment to safe, reliable execution, which we believe will support successful integration over the coming months and long-term value creation. Turning to the Q2, industry SAR trends improved sequentially from the challenging conditions experienced in the Q1, and volume trends became more stable. However, the impacts of several sub-seasonal quarters and depressed rates became increasingly evident in the form of industry-wide driver shortages and constrained carrier capacity. Rising operating costs, including fuel and maintenance, pressured the market and our quarterly results.

Speaker #3: We also see opportunities to improve asset utilization, create operating efficiencies, and strengthen the earnings power of the business over time. Importantly, both companies share a similar culture and a commitment to safe, reliable execution, which we believe will support successful integration over the coming months and long-term value creation.

Speaker #3: Turning to the second quarter, industry saw trends improve sequentially from the challenging conditions experienced in the first quarter, and volume trends became more stable.

Rick O'Dell: Turning to the Q2, industry SAR trends improved sequentially from the challenging conditions experienced in the Q1, and volume trends became more stable. However, the impacts of several sub-seasonal quarters and depressed rates became increasingly evident in the form of industry-wide driver shortages and constrained carrier capacity. Rising operating costs, including fuel and maintenance, pressured the market and our quarterly results. As market conditions continue to strengthen, we believe we are well-positioned to benefit from seasonal favorable tailwinds across the trucking and auto hauling markets.

Speaker #3: However, the impacts of several subseasonal quarters and depressed rates became increasingly evident in the form of industry-wide driver shortages and constrained carrier capacity. Rising operating costs, including fuel and maintenance, pressured the market and our quarterly results.

Speaker #3: As market conditions continue to strengthen, we believe we're well-positioned to benefit from seasonal favorable tailwinds across the trucking and auto hauling markets. Recovering automotive production normalized dealer inventories and improving inventory turnover are supporting higher finished vehicle shipment volumes.

Richard D. O'Dell: As market conditions continue to strengthen, we believe we are well-positioned to benefit from seasonal favorable tailwinds across the trucking and auto hauling markets. Recovering automotive production, normalized dealer inventories, and improving inventory turnover are supporting higher finished vehicle shipment volumes. At the same time, regulatory actions and driver recertification requirements are contributing to tighter capacity following a multi-year freight recession, supporting improving spot rates and carrier pricing dynamics. Hansen & Adkins' greater brokerage exposure relative to Proficient provides increased participation in the recovering spot market. Additionally, recent court rulings, including the Montgomery case, could further benefit Proficient as heightened carrier qualification standards and liability exposure may reduce reliance on marginal capacity and shift demand toward larger, established, safety-focused providers such as Proficient.

Rick O'Dell: Recovering automotive production, normalized dealer inventories, and improving inventory turnover are supporting higher finished vehicle shipment volumes. At the same time, regulatory actions and driver recertification requirements are contributing to tighter capacity following a multi-year freight recession, supporting improving spot rates and carrier pricing dynamics. Hansen & Adkins' greater brokerage exposure relative to Proficient provides increased participation in the recovering spot market. Additionally, recent court rulings, including the Montgomery case, could further benefit Proficient as heightened carrier qualification standards and liability exposure may reduce reliance on marginal capacity and shift demand toward larger, established, safety-focused providers such as Proficient.

Speaker #3: At the same time, regulatory actions and driver recertification requirements are contributing to tighter capacity following a multi-year freight recession, supporting improving spot rates and carrier pricing dynamics.

Speaker #3: Hanson & Adkins’ greater brokerage exposure relative to Proficient provides increased participation in the recovering spot market. Additionally, recent court rulings, including the Montgomery case, could further benefit Proficient, as heightened carrier qualification standards and liability exposure may reduce reliance on marginal capacity and shift demand toward larger, established, safety-focused providers such as Proficient.

Richard D. O'Dell: Our customer discussions have been constructive in response to the evolving market conditions and as we are able to improve fuel surcharge coverage and secure certain rate adjustments during the quarter, our margins improved sequentially each month, finishing with June's operating ratio of 95.7%, which is the best month thus far this calendar year. These trends give us increasing confidence that the industry is moving toward a more balanced and sustainable operating environment. Looking ahead, we believe scale, dependable asset-based capacity, and operational excellence matter more than ever for the automotive industry. The acquisition of Hansen & Adkins, once completed, will strengthen our ability to support customers, create new opportunities for our employees and carrier partners, enhance our long-term financial profile, and drive meaningful value for shareholders.

Rick O'Dell: Our customer discussions have been constructive in response to the evolving market conditions and as we are able to improve fuel surcharge coverage and secure certain rate adjustments during the quarter, our margins improved sequentially each month, finishing with June's operating ratio of 95.7%, which is the best month thus far this calendar year. These trends give us increasing confidence that the industry is moving toward a more balanced and sustainable operating environment. Looking ahead, we believe scale, dependable asset-based capacity, and operational excellence matter more than ever for the automotive industry.

Speaker #3: Our customer discussions have been constructive in response to the evolving market conditions, and as we were able to improve fuel surcharge coverage and secure certain rate adjustments during the quarter, our margins improved sequentially each month, finishing with June's operating ratio of 95.7, which is the best month thus far this calendar year.

Speaker #3: These trends give us increasing confidence that the industry is moving toward a more balanced and sustainable operating environment. Looking ahead, we believe scale, dependable asset-based capacity, and operational excellence matter more than ever for the automotive industry.

Speaker #3: The acquisition of Hanson & Adkins once completed will strengthen our ability to support customers, create new opportunities for our employees, and carrier partners, enhance our long-term financial profile, and drive meaningful value for shareholders.

Rick O'Dell: The acquisition of Hansen & Adkins, once completed, will strengthen our ability to support customers, create new opportunities for our employees and carrier partners, enhance our long-term financial profile, and drive meaningful value for shareholders. Importantly, we believe the transaction comes at an inflection point for the industry, positioning us to capitalize on tightening capacity, improving market fundamentals, and a more favorable pricing environment as conditions normalize. With that, I turn it back to Brad to review our financial results and key performance highlights for the quarter.

Richard D. O'Dell: Importantly, we believe the transaction comes at an inflection point for the industry, positioning us to capitalize on tightening capacity, improving market fundamentals, and a more favorable pricing environment as conditions normalize. With that, I turn it back to Brad to review our financial results and key performance highlights for the quarter.

Speaker #3: Importantly, we believe the transaction comes at an inflection point for the industry, positioning us to capitalize on tightening capacity, improving market fundamentals, and a more favorable pricing environment as conditions normalize.

Speaker #3: With that, I turn it back to Brad to review our financial results and key performance highlights for the quarter.

Speaker #2: Thank you, Rick. In general, financial metrics have improved sequentially in the second quarter of 2026 versus Q1. However, not to the levels achieved in what was a record quarter for the company in Q2 of 2025.

Brad Wright: Thank you, Rick. In general, financial metrics have improved sequentially in Q2 2026 versus Q1. However, not to the levels achieved in what was a record quarter for the company in Q2 2025. An improving cost profile during each sequential month of the second quarter gives us reason for optimism that financial ratios entered Q3 more in line with investor and company expectations. Summarizing year-over-year comparisons, total operating revenue for Q2 2026 was $109.4 million, a decrease of 5.3% versus the same quarter of 2025. Total units delivered during the second quarter totaled 580,962, which was a decrease of 8% compared to the same quarter of 2025. However, revenue per unit was higher than Q2 2025 by 2.9%. Adjusted EBITDA for the second quarter was $7.6 million versus $11.3 million in the second quarter of last year.

Speaker #2: An improving cost profile during each sequential month of the second quarter gives us reason for optimism that financial ratios entered Q3 more in line with investor and company expectations.

Speaker #2: Summarizing year-over-year comparisons, total operating revenue for the second quarter of 2026 was $109.4 million, a decrease of 5.3% versus the same quarter 2025. Total units delivered during the second quarter totaled $580,962, which was a decrease of 8% compared to the same quarter of 2025.

Speaker #2: However, revenue per unit was higher than Q2 of 2025 by 2.9%. Adjusted EBITDA for the second quarter was $7.6 million versus $11.3 million in the second quarter of last year.

Brad Wright: However, revenue per unit was higher than Q2 2025 by 2.9%. Adjusted EBITDA for the second quarter was $7.6 million versus $11.3 million in the second quarter of last year. As already mentioned, we experienced increased fuel costs and driver payments, both company and sub-haul, in response to seasonally inflated demand. These costs were incurred in advance of the customer payment cycle, catching up to higher fuel and sequentially rising volumes. The result was higher accounts receivable and corresponding lower cash balances at quarter end.

Speaker #2: As already mentioned, we experienced increased fuel costs and driver payments, both company and subhaul, in response to seasonally inflated demand. These costs were incurred in advance of the customer payment cycle, catching up to higher fuel and sequentially rising volumes.

Brad Wright: As already mentioned, we experienced increased fuel costs and driver payments, both company and sub-haul, in response to seasonally inflated demand. These costs were incurred in advance of the customer payment cycle, catching up to higher fuel and sequentially rising volumes. The result was higher accounts receivable and corresponding lower cash balances at quarter end. This imbalance, however, self-corrected during July. Net debt was $62.3 million at the end of the second quarter for a net debt leverage ratio of 2.1x on trailing 12-month adjusted EBITDA of $30.3 million. Our equipment CapEx has remained light during 2026, less than $5 million year-to-date.

Speaker #2: The result was higher accounts receivable and correspondingly lower cash balances at quarter end. This balance imbalance, however, self-corrected during July. Net debt was $62.3 million at the end of the second quarter, for a net debt leverage ratio of 2.1 times on trailing 12-month adjusted EBITDA of $30.3 million.

Brad Wright: This imbalance, however, self-corrected during July. Net debt was $62.3 million at the end of the second quarter for a net debt leverage ratio of 2.1x on trailing 12-month adjusted EBITDA of $30.3 million. Our equipment CapEx has remained light during 2026, less than $5 million year-to-date. Following the acquisition that we will be further detailing in a moment, we will assess the available fleet assets on a combined basis and make a determination of CapEx through year-end that is based on needs of the entire company and takes into consideration forthcoming asset deliveries that were already scheduled. Total common shares outstanding on 30 June were 28.1 million, an increase of approximately 218,000 shares since year-end 2025, or less than 1%, as a result of vesting RSU grants.

Speaker #2: Our equipment CapEx has remained light during 2026, at less than $5 million year-to-date. Following the acquisition that we will be further detailing in a moment, we will assess the available fleet assets on a combined basis and make a determination of CapEx through year-end that is based on the needs of the entire company, and takes into consideration forthcoming asset deliveries that were already scheduled.

Brad Wright: Following the acquisition that we will be further detailing in a moment, we will assess the available fleet assets on a combined basis and make a determination of CapEx through year-end that is based on needs of the entire company and takes into consideration forthcoming asset deliveries that were already scheduled. Total common shares outstanding on 30 June were 28.1 million, an increase of approximately 218,000 shares since year-end 2025, or less than 1%, as a result of vesting RSU grants. There were no additional share buybacks during the second quarter as we positioned our capital and debt resources in preparation for a significant acquisition. Finally, as we look ahead to H2 2026, we are forecasting volumes that reflect typical seasonal fluctuation of a relative pullback in July and August, followed by rising volume through the fall.

Speaker #2: Total common shares outstanding on June 30 were $28.1 million, an increase of approximately $218,000 shares since year-end 2025, or less than 1%. As a result of vesting RSU grants.

Speaker #2: There were no additional share buybacks during the second quarter as we positioned our capital and debt resources in preparation for a significant acquisition. Finally, as we look ahead to the second half of 2026, we are forecasting volumes that reflect typical seasonal fluctuation of a relative pullback in July and August, followed by rising volume through the fall.

Brad Wright: There were no additional share buybacks during the second quarter as we positioned our capital and debt resources in preparation for a significant acquisition. Finally, as we look ahead to H2 2026, we are forecasting volumes that reflect typical seasonal fluctuation of a relative pullback in July and August, followed by rising volume through the fall. That said, revenue yield off similar volumes is expected to improve as supply constraints, incentive pricing, and the transportation market moving away from unsustainable low rates becomes more evident over time. Taking into account the acquisition that closes in mid Q3, we believe that reported H2 revenue will total between $350 million and $370 million, with operating ratios approximating 97% and EBITDA margins between 8% and 9%. This outlook assumes that the synergies expected from the combination will start to be realized as we are entering 2027. I would now like to turn the call over to Amy Rice for a fuller overview of the Hansen & Adkins acquisition.

Speaker #2: That said, revenue yield off similar volumes is expected to improve as supply constraints incentivize pricing, and the transportation market moving away from unsustainable low rates becomes more evident over time.

Brad Wright: That said, revenue yield off similar volumes is expected to improve as supply constraints, incentive pricing, and the transportation market moving away from unsustainable low rates becomes more evident over time. Taking into account the acquisition that closes in mid Q3, we believe that reported H2 revenue will total between $350 million and $370 million, with operating ratios approximating 97% and EBITDA margins between 8% and 9%. This outlook assumes that the synergies expected from the combination will start to be realized as we are entering 2027. I would now like to turn the call over to Amy Rice for a fuller overview of the Hansen & Adkins acquisition.

Speaker #2: Taking into account the acquisition that closes in mid-Q3, we believe that reported second half revenue will total between $350 and $370 million with operating ratios approximating 97% and EBITDA margins between 8 and 9%.

Speaker #2: This outlook assumes that the synergies expected from the combination will start to be realized as we're entering 2027. I'd now like to turn the call over to Amy Rice for a fuller overview of the Hanson & Adkins acquisition.

Speaker #4: Thank you, Brad. Rick has expressed some of the broad strategic rationale that we believe makes this combination so compelling. I would like to expand on that with some details about Hanson & Adkins and the complementary nature of their business with Proficient Auto Logistics.

Amy Rice: Thank you, Brad. Rick has expressed some of the broad strategic rationale that we believe make this combination so compelling. I would like to expand on that with some details about Hansen & Adkins and the complementary nature of their business with Proficient Auto Logistics. At over $400 million in revenue and greater than $27 million in EBITDA on a trailing 12-month basis through March, the combination of H&A's US and Canadian businesses are only modestly smaller than Proficient. The Canadian business comprises roughly 13% of their overall revenue, and at that level, positions them as one of the largest in the Canadian market. This will represent a new market for Proficient and one that we believe has meaningful upside potential over the long term.

Speaker #4: At over 400 million in revenue, and greater than 27 million in EBITDA on a trailing 12-month basis through March, the combination of H&A's US and Canadian businesses are only modestly smaller than Proficient.

Speaker #4: The Canadian business comprises roughly 13% of their overall revenue, and at that level positions them as one of the largest in the Canadian market.

Speaker #4: This will represent a new market for Proficient, and one that we believe has meaningful upside potential over the long term. With a meaningful fleet of company assets, which mirrors our target age profile as one of the youngest in the industry, particularly for the US market, we will be well positioned to meet the evolving market in which asset-based capacity with high-quality drivers is crucial.

Amy Rice: This will represent a new market for Proficient and one that we believe has meaningful upside potential over the long term. With a meaningful fleet of company assets, which mirrors our target age profile as one of the youngest in the industry, particularly for the US market, we will be well-positioned to meet the evolving market in which asset-based capacity with high-quality drivers is crucial. The combined enterprise post-closing will be the largest auto hauler in the North American market and one of only a very few with a fully national footprint in the US, as well as comprehensive Canadian coverage.

Amy Rice: With a meaningful fleet of company assets, which mirrors our target age profile as one of the youngest in the industry, particularly for the US market, we will be well-positioned to meet the evolving market in which asset-based capacity with high-quality drivers is crucial. The combined enterprise post-closing will be the largest auto hauler in the North American market and one of only a very few with a fully national footprint in the US, as well as comprehensive Canadian coverage. At over $800 million in revenue and $60 million in adjusted EBITDA on a trailing 12-month basis, we expect to participate in roughly one-quarter of the addressable new vehicle transportation market, enabling network efficiencies for both the company and customers.

Speaker #4: The combined enterprise post-closing will be the largest auto hauler in the North American market, and one of only a very few with a fully national footprint in the U.S., as well as comprehensive Canadian coverage.

Speaker #4: At over 800 million in revenue and $60 million in adjusted EBITDA on a trailing 12-month basis, we expect to participate in roughly one quarter of the addressable new vehicle transportation market, enabling network efficiencies for both the company and customers.

Amy Rice: At over $800 million in revenue and $60 million in adjusted EBITDA on a trailing 12-month basis, we expect to participate in roughly one-quarter of the addressable new vehicle transportation market, enabling network efficiencies for both the company and customers. Hansen & Adkins has employed a company fleet focus and derives approximately 60% of their revenue from company deliveries versus 40% from the sub-hauler segment, which, when combined with Proficient, will bring the overall mix to very nearly half and half. Many of the locations served for auto transport are rail and port facilities, and with more of the infrastructure footprint covered by the combined enterprise, we have a stronger value proposition for OEMs as they have needs for nimbleness in their transportation supply chains.

Speaker #4: Hanson & Adkins has employed a company fleet focus, and derives approximately 60% of their revenue from company deliveries versus 40% from the subhauler segment, which, when combined with Proficient, will bring the overall mix to very nearly half and half.

Amy Rice: Hansen & Adkins has employed a company fleet focus and derives approximately 60% of their revenue from company deliveries versus 40% from the sub-hauler segment, which, when combined with Proficient, will bring the overall mix to very nearly half and half. Many of the locations served for auto transport are rail and port facilities, and with more of the infrastructure footprint covered by the combined enterprise, we have a stronger value proposition for OEMs as they have needs for nimbleness in their transportation supply chains. Notably, we are excited to welcome the experienced and talented workforce across the H&A entities, as well as the enhanced network of partners in the owner-operator and third-party carrier space.

Speaker #4: Many of the locations served for auto transport are rail and port facilities, and with more of the infrastructure footprint covered by the combined enterprise, we have a stronger value proposition for OEMs, as they have needs for nimbleness in their transportation supply chains.

Speaker #4: Notably, we are excited to welcome the experienced and talented workforce across the H&A entities, as well as the enhanced network of partners in the owner-operator and third-party carrier space.

Amy Rice: Notably, we are excited to welcome the experienced and talented workforce across the H&A entities, as well as the enhanced network of partners in the owner-operator and third-party carrier space. As we have discussed with investors throughout our relatively short history, density and key markets matter, and the combined footprint will allow us to strategically deploy our fleets, exhibit flexibility to address customer needs, and coordinate routes to enhance capacity, improve utilization, and reduce empty miles. While both Proficient and Hansen & Adkins have existing business across the spectrum of OEM clients, our respective customer bases are complementary, providing natural diversification, both in the context of geographies served and in customer concentration.

Speaker #4: As we have discussed with investors throughout our relatively short history, density in key markets matter, and the combined footprint will allow us to strategically deploy our fleets exhibit flexibility to address customer needs, and coordinate routes to enhance capacity improve utilization, and reduce empty miles.

Amy Rice: As we have discussed with investors throughout our relatively short history, density and key markets matter, and the combined footprint will allow us to strategically deploy our fleets, exhibit flexibility to address customer needs, and coordinate routes to enhance capacity, improve utilization, and reduce empty miles. While both Proficient and Hansen & Adkins have existing business across the spectrum of OEM clients, our respective customer bases are complementary, providing natural diversification, both in the context of geographies served and in customer concentration. Our businesses are not built around terminal networks the way that other trucking and LTL companies might be. However, we do have points of service where there is overlap, and we expect to realize synergies from the integration of our operations over time.

Speaker #4: While both Proficient and Hanson & Adkins have existing business across the spectrum of OEM clients, our respective customer bases are complementary, providing natural diversification in terms of both geography served and customer concentration.

Speaker #4: Our businesses are not built around terminal networks the way that other trucking and LTL companies might be. However, we do have points of service where there is overlap, and we expect to realize synergies from the integration of our operations over time.

Amy Rice: Our businesses are not built around terminal networks the way that other trucking and LTL companies might be. However, we do have points of service where there is overlap, and we expect to realize synergies from the integration of our operations over time. Of particular note, the combined companies will have a repair and maintenance network that is strategically placed in high-traffic zones, allowing us to achieve the cost synergies of insourcing a higher percentage of our maintenance costs versus paying third-party providers. These synergies in the areas of network optimization, maintenance efficiencies, improved backhaul opportunities, and procurement advantages are in addition to the identified cost savings from optimizing our combined G&A functions.

Speaker #4: Of particular note, the combined companies will have a repair and maintenance network that is strategically placed in high-traffic zones allowing us to achieve the cost synergies of insourcing a higher percentage of our maintenance costs versus paying third-party providers.

Amy Rice: Of particular note, the combined companies will have a repair and maintenance network that is strategically placed in high-traffic zones, allowing us to achieve the cost synergies of insourcing a higher percentage of our maintenance costs versus paying third-party providers. These synergies in the areas of network optimization, maintenance efficiencies, improved backhaul opportunities, and procurement advantages are in addition to the identified cost savings from optimizing our combined G&A functions. The upfront purchase price in this transaction reflects an enterprise value of $130 million, which includes the assumption of approximately $75 million in outstanding equipment financing and $55 million paid to sellers. Payment at closing will include $3 million in Proficient common shares with the remaining $52 million in cash. The amount of debt assumed versus value paid to sellers will be adjusted to reflect the actual debt outstanding and assumed by Proficient at closing.

Speaker #4: These synergies in the areas of network optimization, maintenance efficiencies, improved backhaul opportunities, and procurement advantages are in addition to the identified cost savings from optimizing our combined G&A functions.

Speaker #4: The upfront purchase price in this transaction reflects an enterprise value of $130 million, which includes the assumption of approximately $75 million in outstanding equipment financing and $55 million paid to sellers.

Amy Rice: The upfront purchase price in this transaction reflects an enterprise value of $130 million, which includes the assumption of approximately $75 million in outstanding equipment financing and $55 million paid to sellers. Payment at closing will include $3 million in Proficient common shares with the remaining $52 million in cash. The amount of debt assumed versus value paid to sellers will be adjusted to reflect the actual debt outstanding and assumed by Proficient at closing. In addition, there is potential for an earn-out payment in Q1 2027 based on achievement of forecasted EBITDA for the full year ending 31 December 2026. Any earn-out payment will be made at multiples consistent with the base purchase price.

Speaker #4: Payment at closing will include $3 million in Proficient common shares, with the remaining $52 million in cash. The amount of debt assumed versus value paid to sellers will be adjusted to reflect the actual debt outstanding and assumed by Proficient at closing.

Speaker #4: In addition, there is potential for an earn-out payment in the first quarter of 2027, based on achievement of forecasted EBITDA for the full year ending December 31, 2026.

Amy Rice: In addition, there is potential for an earn-out payment in Q1 2027 based on achievement of forecasted EBITDA for the full year ending 31 December 2026. Any earn-out payment will be made at multiples consistent with the base purchase price. Concurrent to the completion of the acquisition transaction, Proficient is restructuring its overall debt portfolio. Equipment financing for both the Proficient and Hansen & Adkins fleets will be brought under one syndicated facility with a capacity of up to $120 million. The balance at closing will be approximately $100 million. A seven-year convertible bond has been placed for $75 million in face value. A capped call in an equal amount has been obtained to synthetically increase the conversion premium on the convertible bond by up to 75% over the premium set in the convertible indenture, which mitigates equity dilution for current shareholders.

Speaker #4: Any earn-out payment will be made at multiples consistent with the base purchase price. Concurrent with the completion of the acquisition transaction, Proficient is restructuring its overall debt portfolio.

Amy Rice: Concurrent to the completion of the acquisition transaction, Proficient is restructuring its overall debt portfolio. Equipment financing for both the Proficient and Hansen & Adkins fleets will be brought under one syndicated facility with a capacity of up to $120 million. The balance at closing will be approximately $100 million. A seven-year convertible bond has been placed for $75 million in face value. A capped call in an equal amount has been obtained to synthetically increase the conversion premium on the convertible bond by up to 75% over the premium set in the convertible indenture, which mitigates equity dilution for current shareholders.

Speaker #4: Equipment financing for both the Proficient and Hanson & Adkins fleets will be brought under one syndicated facility, with a capacity of up to $120 million.

Speaker #4: The balance at closing will be approximately $100 million. A seven-year convertible bond has been placed for $75 million in face value. A capped call in an equal amount has been obtained to synthetically increase the conversion premium on the convertible bond by up to 75% over the premium set in the convertible indenture.

Speaker #4: This mitigates equity dilution for current shareholders. Final terms on the convertible will be established when the market closes tomorrow, on August 11, and we will separately disclose the final terms at that time.

Amy Rice: Final terms on the convertible will be established when the market closes tomorrow on 11 August, and we will separately disclose the final terms at that time. Finally, the separate line of credit arrangements employed by the two companies are expected to be combined into an expanded syndicated line of credit facility after closing, and the amounts and terms of this new structure will be disclosed upon completion. In summary, we believe this combination is transformative for the auto haul industry and brings meaningful benefits to our customers, in addition to enabling us to further lean into scale and efficiency to achieve improving financial results, consistent with the investment thesis that underscored PAL's creation. Hansen & Adkins meets all of our strategic criteria for growth through acquisition, and its magnitude differentiates this transaction from what we've done in the past.

Speaker #4: Finally, the separate line of credit arrangements employed by the two companies are expected to be combined into an expanded syndicated line of credit facility after closing, and the amounts and terms of this new structure will be disclosed upon completion.

Speaker #4: In summary, we believe this combination is transformative for the auto haul industry, and brings meaningful benefits to our customers in addition to enabling us to further lean into scale and efficiency to achieve improving financial results consistent with the investment thesis that underscored PAL's creation.

Speaker #4: Hanson & Adkins meets all of our strategic criteria for growth through acquisition. And its magnitude differentiates this transaction from what we've done in the past.

Amy Rice: Hansen & Adkins meets all of our strategic criteria for growth through acquisition, and its magnitude differentiates this transaction from what we've done in the past. With all preexisting PAL entities fully integrated, bringing H&A into the PAL environment will be a coordinated and methodical process over the next 6 months. We already share many of the same enterprise systems and a similar values and organizational mindset. We are excited to meet the challenges of the industry in a more compelling fashion as we move forward. I will now turn the call back to Rick for closing comments.

Speaker #4: With all pre-existing PAL entities fully integrated, bringing H&A into the PAL environment will be a coordinated and methodical process over the next six months.

Amy Rice: With all preexisting PAL entities fully integrated, bringing H&A into the PAL environment will be a coordinated and methodical process over the next 6 months. We already share many of the same enterprise systems and a similar values and organizational mindset. We are excited to meet the challenges of the industry in a more compelling fashion as we move forward. I will now turn the call back to Rick for closing comments.

Speaker #4: We already share many of the same enterprise systems, and a similar values and organizational mindset, and we are excited to meet the challenges of the industry in a more compelling fashion as we move forward.

Speaker #4: I'll now turn the call back to Rick for closing comments.

Speaker #1: Thank you, Amy. In closing, we believe this transaction comes at exactly the right time for our industry. Scale, reliability, and operational excellence have never been more important.

Richard D. O'Dell: Thank you, Amy. In closing, we believe this transaction comes at exactly the right time for our industry. Scale, reliability, and operational excellence have never been more important. The acquisition of Hansen & Adkins will create a stronger platform built on proven leadership, disciplined execution, and industry-leading capabilities. This transaction also reinforces Proficient's position as the acquirer of choice, providing a scalable foundation to continue consolidating a highly fragmented market and creating long-term value for all stakeholders. Looking ahead, we are well-positioned to benefit from improving pricing dynamics and increasing demand for asset-based capacity. With the financial strength to continue investing in our fleet, service offerings, and customer relationships, we are confident this combination strengthens our competitive position and accelerates our path for sustainable growth. Thank you for your time and interest. We are excited about the opportunities ahead and look forward to delivering on the significant potential of this partnership.

Rick O'Dell: Thank you, Amy. In closing, we believe this transaction comes at exactly the right time for our industry. Scale, reliability, and operational excellence have never been more important. The acquisition of Hansen & Adkins will create a stronger platform built on proven leadership, disciplined execution, and industry-leading capabilities. This transaction also reinforces Proficient's position as the acquirer of choice, providing a scalable foundation to continue consolidating a highly fragmented market and creating long-term value for all stakeholders.

Speaker #1: The acquisition of Hanson & Adkins will create a stronger platform built on proven leadership, disciplined execution, and industry-leading capabilities. This transaction also reinforces Proficient's position as the acquirer of choice, providing a scalable foundation to continue consolidating a highly fragmented market and creating long-term value for all stakeholders.

Speaker #1: Looking ahead, we're well-positioned to benefit from improving pricing dynamics and increasing demand for asset-based capacity. With a financial strength to continue investing in our fleet, service offerings, and customer relationships, we're confident this combination strengthens our competitive position and accelerates our path for sustainable growth.

Rick O'Dell: Looking ahead, we are well-positioned to benefit from improving pricing dynamics and increasing demand for asset-based capacity. With the financial strength to continue investing in our fleet, service offerings, and customer relationships, we are confident this combination strengthens our competitive position and accelerates our path for sustainable growth. Thank you for your time and interest. We are excited about the opportunities ahead and look forward to delivering on the significant potential of this partnership. Operator, we will now open it up for questions.

Speaker #1: Thank you for your time, and interest, we're excited about the opportunities ahead, and look forward to delivering on the significant potential of this partnership.

Richard D. O'Dell: Operator, we will now open it up for questions.

Speaker #1: Operator will now open it up for questions.

Speaker #2: Thank you. As a reminder, to ask a question, please press star when one of your telephone and wait for your name to be announced.

Operator: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bruce Chan with Stifel. Your line is now open.

Speaker #2: To withdraw your question, please press star one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bruce Chan with Stifel. Your line is now open.

Bruce Chan: Hey. Good afternoon, everyone, and thanks for taking the questions here. Maybe want to start out by following up on some of your comments about the market. Certainly understand the margin pressure from the tightening capacity. Typically a good indication of the early cycle inflection, to your point. But I know that you typically have a longer duration pricing recovery, just given the average contract tenure here. So want to get your sense for when you expect pricing to sort of outpace the cost inflation. Is there a timeline associated to that? And whether or not you have an opportunity to maybe take any out-of-cycle price increases and address some of that margin squeeze.

Speaker #5: Hey, good afternoon, everyone, and thanks for taking the questions here. Maybe I want to start out by following up on some of your comments about the market.

Speaker #5: Certainly, understand the margin pressure from the tightening capacity typically a good indication of the early cycle inflection to your point. But I know that you typically have a longer duration pricing recovery just given the average contract tenure here.

Speaker #5: So, I want to get your sense for when you expect pricing to sort of outpace the cost inflation. Is there a timeline associated with that?

Speaker #5: And then, whether or not you have an opportunity to maybe take any out-of-cycle price increases and address some of that margin squeeze?

Speaker #4: Yep. Hi, Bruce. The market has sort of forced some short-term adjustments in particularly strained geographies. So we've been working with customers most recently in many cases on short-term incentives to support capacity enhancement in given geographies.

Amy Rice: Yep. Hi, Bruce. The market has sort of forced some short-term adjustments in particularly strained geographies. We've been working with customers most recently, in many cases, on short-term incentives to support capacity enhancement in given geographies. And what we're finding is, with additional rate support, we can be more successful in bringing additional capacity to the market. So we're getting some positive proof points that enhanced rate supports enhanced service, and we're using that as a platform for a broader conversation with our customers where we are seeing service challenges, or we do see greater demand need for our customers that's currently unmet. What I would say to your question is I think we have certainly come off of the bottom of the market in terms of low rate pressure.

Speaker #4: And what we're finding is, with additional rate support, we can be more successful in bringing additional capacity to the market. So we're getting some positive proof points that enhanced rate supports enhance service.

Speaker #4: And we're using that as a platform for a broader conversation with our customers where we are seeing service challenges or we do see greater demand need for our customers that's currently unmet.

Speaker #4: So, what I would say to your question is, I think we have certainly come off the bottom of the market in terms of low rate pressure.

Amy Rice: What I would say to your question is I think we have certainly come off of the bottom of the market in terms of low rate pressure. There have been some failures in the ability to service traffic at very low rates, and that's helpful to reestablishing sustainable rates going forward. Now, as you mentioned, off-cycle price increases, to the extent that there is a supply-demand imbalance, it's incumbent on both us and our partner customers to figure out how we close that gap. And we are finding that supporting drivers and third-party capacity with a more compensable rate structure is an enabler. So I do see opportunity there.

Speaker #4: There have been some failures in the ability to service traffic at very low rates, and that's helpful to reestablishing sustainable rates going forward. And now, as you mentioned, off-cycle price increases—to the extent that there is a supply-demand imbalance—it's incumbent on both us and our partner customers to figure out how we close that gap.

Amy Rice: There have been some failures in the ability to service traffic at very low rates, and that's helpful to reestablishing sustainable rates going forward. Now, as you mentioned, off-cycle price increases, to the extent that there is a supply-demand imbalance, it's incumbent on both us and our partner customers to figure out how we close that gap. And we are finding that supporting drivers and third-party capacity with a more compensable rate structure is an enabler. So I do see opportunity there.

Speaker #4: And we are finding that supporting drivers and third-party capacity with a more compensable rate structure is an enabler. So, I do see opportunity there.

Speaker #5: So, I guess given those comments and given the recent acquisition, is it fair to say that we will be looking at price to sort of outpace the cost inflation by the end of the year?

Bruce Chan: So I guess given those comments and given the recent acquisition, is it fair to say that we will be looking at price to sort of outpace the cost inflation by end of the year? Is that more of a 2027 event?

Speaker #5: Is that more of a 2027 event?

Speaker #4: Well, part of the story there is what happens on the cost side of the profile. Again, we've seen a very volatile fuel environment due to the macro backdrop.

Amy Rice: Well, part of the story there is what happens on the cost side of the profile. Again, we have seen a very volatile fuel environment due to the macro backdrop. It is unclear at this point when fuel normalizes back to what has been more typical for the last several years. I think that is a key component. Maintenance costs and supply costs, insurance costs, there has been increased pressure there as well. I do think our scale in the combination helps us to combat some of that. We have greater purchasing power, and we have a greater maintenance footprint to be able to be more efficient in our maintenance spend. I am optimistic in terms of what that represents as we bring the two networks together.

Speaker #4: And it's unclear at this point when fuel normalizes back to what has been more typical for the last several years. I think that's a key component.

Speaker #4: Maintenance costs and supply costs, insurance costs, there has been increased pressure there as well. I do think our scale in the combination helps us to combat some of that.

Speaker #4: We have greater purchasing power. And we have a greater maintenance footprint to be able to be more efficient in our maintenance spend. So I'm optimistic in terms of what that represents as we bring the two networks together.

Speaker #4: To hit your question on timing head-on, yeah, I think we come into 2027 with a good table set for the year on a combined basis.

Amy Rice: To hit your question on timing head-on, I think we come into 2027 with a good table set for the year on a combined basis.

Speaker #5: Okay, and then just one more for me on the deal. I don't know if I missed it, but do you have a sense for what the margin profile looks like for the combined entity pro forma?

Bruce Chan: Okay, just one more from me on the deal. I do not know if I missed it, but do you have a sense for what the margin profile looks like for the combined entity pro forma? Any thoughts on whether the deal is accretive at the get-go and any synergy targets or guidance that you can provide there?

Speaker #5: Any thoughts on whether the deal is accretive at the get-go and any synergy targets or guidance that you can provide there?

Speaker #1: Yeah, Bruce, definitely accretive from the get-go. I mean, their financial profile looks a lot like ours. The company generates a lot of cash, and they do have good margins, but nonetheless, they're subject to the same challenges that we've got in the current environment.

Brad Wright: Bruce, definitely accretive from the get-go. Their financial profile looks a lot like ours. The company generates a lot of cash, and they do have good margins, but nonetheless, subject to the same challenges that we have got in the current environment. I am conservatively projecting for the rest of the year that we would run at a 97 OR and an 8% to 9% EBITDA margin. I think that there is plenty of room for upside to that as we get into 2027 and start realizing the synergies that come along with this combination.

Speaker #1: I'm conservatively projecting for the rest of the year that we would run at a 97 OR and a 8 to 9 percent EBITDA margin.

Speaker #1: But I think that there's plenty of room for upside to that as we get into '27 and start realizing the synergies that come along with this combination.

Speaker #5: So that $97 includes the synergies, or that's exclusive of the synergies?

Bruce Chan: So that 97 includes the synergies or that is exclusive of the synergies?

Speaker #1: I think that's—I mean, we haven't baked in a lot of synergies there because, frankly, we've identified some places that we will attack, but that still remains to be costed out and implemented between now and the beginning of the year.

Brad Wright: We have not baked in a lot of synergies there because frankly, we have identified some places that we will attack, but that still remains to be costed out between now and implemented between now and the beginning of the year. So, there is not a lot of synergy built into that number.

Speaker #1: So, there's not a lot of synergy built into that number.

Speaker #5: Okay. Great. Thank you.

Bruce Chan: Okay, great. Thank you.

Speaker #2: Thank you. As a reminder, to ask a question at this time, please press star one one (*11) when prompted on your telephone. Our next question comes from the line of Tyler Brown with Raymond James.

Operator: Thank you. As a reminder, to ask a question at this time, please press *11 on your touchtone telephone. Our next question comes from the line of Tyler Brown with Raymond James. Your line is now open.

Speaker #2: Your line is now open.

Speaker #6: Hey, good afternoon.

Tyler Brown: Hey, good afternoon.

Speaker #1: Good afternoon, Tyler.

Brad Wright: Good afternoon, Tyler.

Tyler Brown: Hey. Rick, Amy, obviously, one of the big developments this quarter was the Supreme Court's ruling on Montgomery, and I guess the potential risk on brokered loads. Obviously you guys have a very large mix of subcontractor capacity. I am just kind of curious about what the implication of Montgomery is for you and frankly, the broader industry. Is it going to lead to some forced purging of some of the subcontractors that maybe can't meet some of the stringent safety thresholds? Or are you expecting to see outside inflation on the liability side? I am just curious what you guys are thinking about that case for you and frankly, for the industry more broadly.

Speaker #6: Hey. Rick, Amy, obviously, one of the big developments this quarter was the Supreme Court's ruling on Montgomery. And I guess the potential risk on brokered loads.

Speaker #6: So, obviously, you guys have a very large mix of subcontractor capacity. I'm just kind of curious about what the implication of Montgomery is for you, and, frankly, the broader industry.

Speaker #6: I mean, is it going to lead to some forced purging of some of the subcontractors that maybe can't meet some of the stringent safety thresholds, or are you expecting to see outsized inflation on the liability side?

Speaker #6: I'm just curious what you guys are thinking about that case for you and, frankly, for the industry more broadly.

Speaker #4: Yep. So one thing I would remind the group, though our subpolar segment is roughly 60% of our current portfolio, that's comprised of both owner-operators who run under our transportation authority as well as third-party carriers who run under independent transportation authority.

Amy Rice: Yep. One thing I would remind the group, though our subhauler segment is roughly 60% of our current portfolio, that is comprised of both owner-operators who run under our transportation authority, as well as third-party carriers who run under independent transportation authority. I bring that up to say the owner-operators are already under our liability, so the incremental risk with Montgomery is really pertaining to third-party carriers. And we have got a more stringent third-party screening set of criteria and set of insurance and safety requirements of our network of parties than what we have seen in a lot of the industry. And I think a lot of the regulatory enforcement that is taking place is starting to purge some of the less scrupulous players in that space, and it is also contributory to some of the supply shortage that we are all feeling across the industry.

Speaker #4: I bring that up to say the owner-operators are already under our liability. So the incremental risk with Montgomery is really pertaining to third-party carriers.

Speaker #4: And we've got a more stringent third-party screening set of criteria and set of insurance and safety requirements of our network of parties than what we've seen in a lot of the industry.

Speaker #4: And I think a lot of the regulatory enforcement that's taking place is starting to purge some of the less scrupulous players in that space.

Amy Rice: I think a lot of the regulatory enforcement that is taking place is starting to purge some of the less scrupulous players in that space, and it is also contributory to some of the supply shortage that we are all feeling across the industry. That said, both from a risk mitigation standpoint and a capacity reliability standpoint, having a large asset base to rely upon to deliver and then having a strong, safe, reputable set of third-party carriers is the best way to protect ourselves from broker liability. To your question, yes, broker liability insurance is becoming more expensive, though within our insurance portfolio, that is a very small piece of our overall coverage portfolio.

Speaker #4: And it is also contributory to some of the supply shortage that we're all feeling across the industry. That said, both from a risk mitigation standpoint and a capacity reliability standpoint, having a large asset base to rely upon to deliver and then having a strong safe reputable set of third-party carriers is the best way to protect ourselves from broker liability to your question.

Amy Rice: That said, both from a risk mitigation standpoint and a capacity reliability standpoint, having a large asset base to rely upon to deliver and then having a strong, safe, reputable set of third-party carriers is the best way to protect ourselves from broker liability. To your question, yes, broker liability insurance is becoming more expensive, though within our insurance portfolio, that is a very small piece of our overall coverage portfolio.

Speaker #4: Yes, broker liability insurance is becoming more expensive, though within our insurance portfolio, that's a very small piece of our overall coverage portfolio.

Speaker #5: Okay. So of the 60% with just PAL legacy, is it is it mostly under your DOT authority, or is it a rough mix? I'm just curious what that mix is.

Tyler Brown: Okay. So of the 60% which is PAL legacy, is it mostly under your DOT authority or is it a rough mix? I am just curious what that mix is.

Speaker #4: I'd say we're at least 20% within the owner-operator space.

Amy Rice: I would say we are at least 20% within the owner operator space.

Speaker #5: Okay. Okay. And then just, Amy, just any color on the spot market? What was that mix in the quarter? Maybe you mentioned it. I may have missed it.

Tyler Brown: Okay. Amy, just any color on the spot market, what was that mix in the quarter? Maybe you mentioned it, I may have missed it. What are you seeing here into July and August? On that, is the reduction in the sub-haul volumes a function of those routing guides starting to break down because there is just an inability to move those VINs at those prices? Is that the right way to think about it?

Speaker #5: And then what are you kind of seeing here into July and August? And on that, is the reduction in the sub haul volumes is that kind of a function of those routing guides starting to break down because there's just an inability to move those VINs at those prices?

Speaker #5: Is that the right way to think about it?

Amy Rice: There's several questions in there. I'll take them one by one. The spot market is reemerging for sure. What we are experiencing in the spot market is, we've shared consistently that our bread and butter is contract business for customers. Given the limited number of customers in this industry, it would be unwise to abandon contract freight and chase spot freight. There's too few customers to do that without endangering your reputation and just sending a really bad message. What we've done is where we see that demand is in excess of the capacity we have against our contract business, we've been discussing with customers, rather than putting the excess to the spot market, is there an opportunity for a short-term incentive, or surge rates that we could use to essentially participate in the spot market to move the broader contract traffic.

Speaker #4: There are several questions in there. I'll take them one by one. The spot market is re-emerging, for sure. What we are experiencing in the spot market is—we've shared consistently that our bread and butter is contract business for customers.

Speaker #4: And so, given the limited number of customers in this industry, it would be unwise to abandon contract rates and chase spot freight. There are too few customers to do that.

Speaker #4: Without endangering your reputation and just sending a really bad message. And so what we've done is where we see that demand is in excess of the capacity we have against our contract business, we've been discussing with customers, rather than putting the excess to the spot market, is there an opportunity for a short-term incentives or surge rates that we could use to essentially participate in the spot market to move the broader contract traffic?

Speaker #4: And we've done a lot more of that, so maybe not traditional spot traffic, but the opportunity to enhance and augment our capacity and movement in a particular area when the demand is acute for a given customer.

Amy Rice: We've done a lot more of that. So maybe not traditional spot traffic, but the opportunity to enhance and augment our capacity and movement in a particular area when the demand is acute for a given customer. In terms of what we're seeing.

Speaker #4: In terms of what we're seeing.

Tyler Brown: Yeah, sorry. Go ahead. Sorry.

Speaker #5: Yeah. Sorry. Sorry. Go ahead.

Speaker #4: In terms of what we're seeing in July and August, we're seeing the typical seasonal period where there are some plant shutdowns in early July, which is followed by a bit of a languishing in the rail pipelines in the latter part of July and into August.

Amy Rice: In terms of what we're seeing in July and August, we're seeing the typical seasonal period where there are some plant shutdowns in early July, which is followed by a bit of a languishing in the rail pipelines in the latter part of July and into August. So we have seen a pullback from where we were in the Q2, and candidly, it was needed. There was a backlog of demand that across the industry, carriers have benefited from some time to work off that backlog. At this point, I would say inventories have normalized. When I say inventories, I mean inventories available to us to move. Inventories have normalized. Our service metrics have by and large recovered. We're ready to move into the fall season that tends to ramp up through the end of the year.

Speaker #4: So, we have seen a pullback from where we were in the second quarter, and candidly, it was needed. There was a backlog of demand that, across the industry, carriers have benefited from, giving some time to work off that backlog.

Speaker #4: At this point, I would say inventories have normalized, and when I say inventories, I mean inventories available to us to move. Inventories have normalized.

Speaker #4: Our service metrics have, by and large, recovered, and we are ready to move into the fall season, which tends to ramp up through the end of the year.

Speaker #4: And then your question, your last question about reduced share excuse me, subhauler volume and what's driving that. In this higher fuel environment, it is very expensive as an independent third-party carrier to cover your operating costs and particularly the higher cost of fuel.

Amy Rice: Your last question about reduced sub-hauler volume and what is driving that. In this higher fuel environment, it is very expensive as an independent third-party carrier to cover your operating costs, particularly the higher cost of fuel. What we have seen in that whole segment of the industry is third-party carriers who have historically chosen to run in our portfolio consistently have had to chase the highest dollar. Some of that capacity has moved into opportunistic freight on a short-term basis to try and recoup some of the outsized costs that they have had to bear over the last several quarters. It has resulted in reduced sub-hauler capacity on our network. Some of it also has been due to exits in that space.

Speaker #4: And so what we've seen in that poll segment of the industry is third-party carriers who have historically chosen to run in our portfolio consistently have had to chase the highest dollar.

Speaker #4: And so some of that capacity has moved into opportunistic freight on a short-term basis to try and recoup some of the outsized costs that they've had to bear over the last several quarters.

Speaker #4: And it's resulted in reduced subhauler capacity on our network. Some of it also has been due to exits in that space.

Speaker #5: Okay, sorry—I threw a lot at you. Thank you very much; I appreciate it.

Tyler Brown: Okay. Sorry, I threw a lot at you. Thank you very much. Appreciate it.

Speaker #2: Thank you. Our next question comes from the line of Alex Paris with Barrington Research. Your line is now open.

Operator: Thank you. Our next question comes from the line of Alex Paris with Barrington Research. Your line is now open.

Speaker #6: Hi guys. Thanks for taking my questions, and congratulations on reaching the inflection point—and perhaps more significantly, the acquisition of H&A. Listening to your prepared comments, it sounds like it’ll be accretive from the get-go.

Alex Paris: Hi, guys. Thanks for taking my questions, and congratulations on reaching the inflection point and maybe more significantly, the acquisition of H&A. Listening to your prepared comments, it sounds like it will be accretive from the get-go, and there will be synergy opportunities in 2027 to improve its contribution. I heard, Brad, your guidance on H2 expectations for the combined company. I think you said in the press release that the deal would close in August at some point, so you are not going to get the July and most of the August revenue. I am wondering if you could give guidance on Q3, the current quarter like you usually do pre-acquisition.

Speaker #6: And there will be synergy opportunities in 2027 to improve its contribution. I heard, Brad, your guidance on second half expectations for the combined company. I think you said in the press release that the deal would close in August at some point.

Speaker #6: So you're not going to get the July and most of the August revenue. I'm wondering if you could give guidance on Q3, the current quarter, like you usually do, pre-acquisition.

Speaker #3: Yeah. Look, on a standalone basis, we're looking for revenue in Q3 that's probably at or right around the Q2 level, maybe up just slightly.

Brad Wright: Yeah. Look, on a standalone basis, we are looking for revenue in Q3 that is probably at or right around the Q2 level, maybe up just slightly. But given seasonality, I would expect it to be kind of flattish. Yet, because of some of the pricing dynamics and the better cost control that we experienced in June, I think we can continue to see a better OR, better profitability on that same level of revenue.

Speaker #3: But given seasonality, I would expect it to be kind of flattish. And yet, because of some of the pricing dynamics and the better cost control that we experienced in June, I think we can continue to see better OR, better profitability on that same level of revenue.

Speaker #6: Okay. And then again, listening to your second half guidance post-acquisition, it sounds like this is going to be a $900 million company or so on a run-rate basis, on an annual basis.

Alex Paris: Okay. Then again, listening to your H2 guidance post-acquisition, it sounds like this is going to be a $900 million company or so on a run rate basis on an annual basis and an EBITDA of $90 million or so. Does that sound about right?

Speaker #6: And EBITDA of $90 million or so? Does that sound about right?

Richard D. O'Dell: Seems a little high. I think one of the slides that we had, if you just look on a trailing 12 basis, it is probably maybe like eight-

Rick O'Dell: Seems a little high. I think one of the slides that we had, if you just look on a trailing 12 basis, it is probably maybe like eight-

Speaker #3: It seems a little high. I think one of the slides that we had—I mean, if you just look on a trailing twelve basis, it's probably maybe like eight.

Amy Rice: 835

Speaker #4: 835.

Speaker #3: 830. Yeah. Revenue and.

Richard D. O'Dell: 830, yeah.

Rick O'Dell: 830, yeah of revenue.

Amy Rice: Yeah.

Richard D. O'Dell: Revenue.

Amy Rice: About $50 million in EBITDA.

Speaker #4: Yeah. And about 50 million in EBITDA.

Amy Rice: About $50 million in EBITDA.

Richard D. O'Dell: $60 to $65 million of EBITDA.

Rick O'Dell: $60 to $65 million of EBITDA.

Speaker #3: $60 to $65 million of EBITDA.

Speaker #6: Okay, good. I haven't seen the slide yet, so I appreciate that. That's all I have. Thank you.

Alex Paris: Okay, good. I haven't seen the slides yet, so appreciate that. That's all I have. Thank you.

Speaker #3: Thanks, Alex.

Richard D. O'Dell: Thanks, Alex.

Rick O'Dell: Thanks, Alex.

Speaker #2: Thank you. Our next question is a follow-up from Bruce Chan with Stifel. Your line is now open.

Operator: Thank you. Our next question is a follow-up from Bruce Chan with Stifel. Your line is now open.

Speaker #7: Yeah. Hey, team. Thanks for the follow-ups here. Brad, I just want to maybe pull at that bar or margin thread a little bit and what the combined entity looks like, especially as we get into '27.

Bruce Chan: Hey team, thanks for the follow-ups here. Brad, just want to maybe pull at that bar margin thread a little bit and what the combined entity looks like, especially as we get into 2027. You'd previously talked about, I know this is maybe a couple of years ago, but seeing sustainably below 90 OR type organization and maybe being able to whittle that down into the high 80s. Is that still the idea here? Is that something that you think you can achieve towards the end of 2027? Or is there a new level that we should sort of be thinking about?

Speaker #7: You'd previously talked about—I know this was maybe a couple of years ago—but being sustainably below a 90 OR-type organization, maybe being able to whittle that down into the high 80s. Is that still the idea here?

Speaker #7: Is that something that you think you can achieve towards the end of '27? Or is there a new level that we should sort of be thinking

Speaker #1: About

Speaker #2: Well , we'd still think that there's a lot of room to push or down . I don't know that I would I would be thinking , you know , 90 or below in 2027 .

Richard D. O'Dell: Well, Bruce, we still think that there's a lot of room to push OR down. I don't know that I would be thinking 90 or below in 2027. I think we're still in an environment where, again, with June at like a 95, I think when we start putting the two companies together and realizing those synergies, we should be able to get below that level. But that's going to take a little time. I don't want to be too ebullient without having the chance to really dig in and see what level of synergies are available to us. But we still believe that getting there, whether that's in 2027 or 2028, to that more reasonable 95 and below is certainly in the cards.

Rick O'Dell: Well, Bruce, we still think that there's a lot of room to push OR down. I don't know that I would be thinking 90 or below in 2027. I think we're still in an environment where, again, with June at like a 95, I think when we start putting the two companies together and realizing those synergies, we should be able to get below that level. But that's going to take a little time. I don't want to be too ebullient without having the chance to really dig in and see what level of synergies are available to us. But we still believe that getting there, whether that's in 2027 or 2028, to that more reasonable 95 and below is certainly in the cards.

Speaker #2: I think we're still in an environment where , you know , again , with June at like a 95 , I think when we start putting the two companies together and realizing those synergies , we should be able to get below that level .

Speaker #2: But that's, you know, that's going to take a little time. And so I don't want to be too ebullient without having the chance to really dig in and see what level of synergies are available to us.

Speaker #2: But , but we still believe that getting there , whether that's in 27 or 28 to that , that , you know , more reasonable 95 and below is certainly in the cards .

Speaker #3: Okay . Yeah . That's helpful . And then , Amy , maybe one from your side , you talked about the sub hauler mix .

Bruce Chan: Okay. Yeah, that's helpful. Amy, maybe one from your side. You talked about the subhauler mix. I do not know if that looks similar for Hansen & Adkins. What does that do to the overall subhauler mix? If you think about a now much larger fleet, maybe close to double the size as before, is there an opportunity to move a lot of the volume even more towards company equipment?

Speaker #3: I don't know if that looks similar for Hanson and Adkins . What does that do to the overall sub hauler mix . And if you think about a how much larger fleet you know maybe close to double the size as before , is there an opportunity to move a lot of the volume even more for company equipment ?

Speaker #4: So Hansen and Atkins mix is about the inverse of ours . So there are about 60% move in the company segment . And about 40% in the sub segment .

Amy Rice: Hansen & Adkins mix is about the inverse of ours. They are about 60% moved in the company segment and about 40% in the subhaul segment. I would say more of their revenue in the subhaul segment is on owner-operators relative to subhaulers. Much of what they do in the third party carrier space is a more traditional brokerage model. So we should have a nice diversified mix of channel tools in our toolkit here. To your question, yes, on a combined basis, I think our mix on company assets should be roughly 50%. That is powerful in terms of being able to provide a more reliable service product on company assets supplemented by owner-operators.

Speaker #4: But I would say more of their revenue in the sub segment is on owner operators relative to sub haulers . And much of what they do in the third party carrier space is a more traditional brokerage model .

Speaker #4: So we should have a nice diversified mix of channel tools in our toolkit here . But to your question , yes . I mean , on a combined basis , I think our mix on company assets should be roughly 50% .

Speaker #4: And that's powerful in terms of being able to provide a more reliable service product on , on company assets , supplemented by , by owner operators

Speaker #3: Okay . Thank you .

Bruce Chan: Okay. Thank you.

Speaker #5: And I would just comment on margins , just I mean , it's just math , but , you know , at this point with the combined organization , a 948 is about a dollar per share in earnings and earnings per share .

Richard D. O'Dell: I would just comment on margins. It is just math, but at this point, with the combined organization, a 94 eight is about a dollar per share in EPS, and a 92 eight is about $1.50. So in terms of needing to necessarily get to an 88 OR to have meaningful EPS and return for shareholders, as we step along the way, we will be generating some meaningful EPS and good returns for shareholders.

Rick O'Dell: I would just comment on margins. It is just math, but at this point, with the combined organization, a 94 eight is about a dollar per share in EPS, and a 92 eight is about $1.50. So in terms of needing to necessarily get to an 88 OR to have meaningful EPS and return for shareholders, as we step along the way, we will be generating some meaningful EPS and good returns for shareholders.

Speaker #5: And a 92 . It's about $1.50 . So you know , in terms of , you know , needing to necessarily get to an 88 or to have meaningful EPS and return for shareholders as we step along the way , we'll be generating some meaningful EPS and good returns for shareholders

Speaker #3: Great . Thanks .

Bruce Chan: Great. Thanks.

Speaker #6: Thank you. I would now like to hand the call back over to Rick O'Dell for closing remarks.

Operator: Thank you. I would now like to hand the call back over to Rick O'Dell for closing remarks.

Speaker #5: Well , thank you for your interest in Proficient Auto Logistics, Inc . We're really excited about the Hansen and Atkins addition to our organization , and we look forward to capitalizing on this opportunity for all the stakeholders being our customers , our employees , and our shareholders .

Richard D. O'Dell: Well, thank you for your interest in Proficient Auto Logistics. We are really excited about the Hansen & Adkins addition to our organization, and we look forward to capitalizing on this opportunity for all the stakeholders, being our customers, our employees, and our shareholders. Thank you.

Rick O'Dell: Well, thank you for your interest in Proficient Auto Logistics. We are really excited about the Hansen & Adkins addition to our organization, and we look forward to capitalizing on this opportunity for all the stakeholders, being our customers, our employees, and our shareholders. Thank you.

Speaker #5: Thank you

Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.

Q2 2026 Proficient Auto Logistics Inc Earnings Call

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