Proficient Auto Logistics’ Delivery Growth Turned Into Contraction
The auto transporter delivered 580,962 vehicles in the second quarter, while higher costs and delayed pricing adjustments kept profitability near break-even on an adjusted operating basis.
Proficient Auto Logistics, Inc. (PAL), a provider of auto transportation and logistics services, saw delivery growth turn into contraction in the second quarter as available hauling capacity tightened. Deliveries fell 8.0% year over year, reversing the 1.5% increase reported in the first quarter, despite an improvement in industry demand trends.
Revenue fell 5.3% to $109.4 million in the three months ended June 30, widening the decline from 1.6% in the first quarter. The company said higher fuel-surcharge recoveries partially offset lower delivery volumes. Those recoveries cushioned the revenue decline without preventing the business from slipping further below its year-earlier sales level.
The constraint was not simply a weaker automotive market. Industry seasonally adjusted annual sales trends improved sequentially and were down less than 1% from the comparable quarter of 2025. Proficient’s delivery volumes were constrained by reduced available capacity following market exits, which it attributed to several quarters of below-seasonal demand and rate pressure that had affected compensation.
That left the company facing capacity limitations even after management had pointed toward improving conditions. In May, Chief Executive Rick O’Dell had said underlying demand improved exiting the first quarter and that the company believed more consistent seasonal volumes and better fuel-cost recovery would support improved performance. In the second quarter, O’Dell said higher fuel, equipment and driver-related costs increased expenses, while pricing actions generally lagged inflation.
Profitability nevertheless recovered sequentially. Adjusted operating income was $0.5 million, reversing a $3.2 million adjusted operating loss in the first quarter. The second-quarter adjusted operating ratio was 99.5%, leaving little revenue after adjusted operating expenses. Cost inflation and capacity limitations kept revenue near fixed-cost coverage levels, while claims expense, part of which was self-insured, exceeded expectations.
O’Dell said margins improved each month as rate adjustments began taking effect. That improvement still left Proficient with a reported operating loss of $3.2 million and a net loss of $3.9 million, or $0.14 a share. Its adjusted results excluded intangible amortization and stock compensation; the return to adjusted operating profit therefore left the company short of profitability under generally accepted accounting principles.
The delivery mix underscored its reliance on outside haulers. Subhaulers transported 376,184 vehicles and accounted for 62% of delivery revenue, while company deliveries totaled 204,778 vehicles. Revenue per subhauler delivery was $157.70. Both channels participated in the volume weakness, rather than one providing an offset to the other.
Proficient also announced an acquisition that would substantially change its operating footprint. It agreed to buy Hansen & Adkins, whose businesses included a company-owned fleet and operations in the United States and Canada. The company expects the transaction to establish its Canadian presence under the MCL McGill brand and to close in mid-August, subject to customary conditions.
The agreement carried an upfront purchase price of $130 million, including approximately $75 million of assumed debt. The balance of that upfront price included approximately $52 million in cash and $3 million in Proficient shares. The agreement also provided for potential earnout payments of up to approximately $22.1 million based on achievement of near-term EBITDA targets.
The cash portion would be funded with available cash resources and credit-facility borrowings. Proficient ended June with $8.1 million in cash and $70.4 million in debt.
Alongside the acquisition, Proficient plans a $75 million offering of convertible senior notes due 2033. The company intends to use the proceeds to refinance outstanding debt and pay premiums on capped call transactions. Those transactions are expected to reduce potential dilution or offset certain cash payments upon conversion, subject to a cap.
The acquisition puts a much larger owned fleet into Proficient’s plans after a quarter constrained by hauling availability. The company expects Hansen & Adkins to more than double its owned fleet capacity and add over 900 drivers, operational staff and support management personnel. Proficient expects the combined business to move more than four million vehicles annually.
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