Proficient Auto Logistics executives signed an agreement to buy a Utah-based hauler with terminals in seven states that would grow Proficient’s profits per share by about 20% once acquired.
The Proficient team, led by former Saia Inc. CEO Rick O’Dell, expects to complete its purchase of Auto Transport Group by month’s end. The move would add an operation with more than 100 vehicles, about 80 people, and roughly 200,000 annual deliveries to Florida-based Proficient, which in May completed an initial public offering that funded the acquisitions of five other regional carriers.
Proficient didn’t release detailed terms of the ATG acquisition. But, based on the company’s size relative to Proficient as a whole and comments from CFO Brad Wright that it will be structured similarly to the IPO-funded acquisitions, the deal looks to be worth about $30 million.
“They operate at margins consistent with the best of our founding companies and are expected to be immediately accretive to earnings per share,” O’Dell said on an Aug. 9 conference call with analysts, noting that ATG would add about 25 cents per share to Proficient’s bottom line on an annualized basis, which analysts were forecasting to be $1.30 per share in 2025.
In addition to its home state, ATG runs terminals in Arizona, California, Montana, Nevada, Oregon, and Washington. Its operations will dovetail nicely with the two California-based companies—Deluxe Auto Carriers and Sierra Mountain Group—O’Dell and his team bought a few months ago.
Word of the deal to buy ATG came along with Proficient’s second-quarter results, which showed a net loss of nearly $3.6 million on $107 million in operating revenue. The net loss included nearly $6.7 million in stock compensation costs that stemmed from the company’s IPO; excluding those expenses and other items, adjusted operating income came in at $8.7 million.
See also: Auto hauler Proficient takes home $200M from IPO
The company’s adjusted operating ratio for the quarter was 91.8%, an improvement of nearly a percentage point from what its component companies produced in the same period of 2023. O’Dell and Wright said their teams have made solid progress integrating the five companies Proficient acquired immediately after going public this spring and expect to clear several more hurdles by early fall.
Another positive indicator from Q2 was the growth of backhaul work to cut down on empty miles across Proficient’s routes. The company handled 352 such jobs during the quarter, and Wright noted improvements on that front are still in their infancy. In all, Proficient delivered more than 507,700 units in the three months ended June 30, which was more than 10% higher versus the 2023 quarter.
One potential cloud on the horizon for Proficient is the summer slowdown in automotive production, the combination of both normal seasonal downtime as well as some manufacturers pulling back in the face of higher inventories. O’Dell also mentioned that June’s hack of dealership software vendor CDK Global also slowed volumes in late Q2.
The weak volume trend continued in July, O’Dell said, with total revenue down about 11% year over year. That has prompted Proficient’s leaders to trim their growth forecast from 8% to the mid-single digits in the third quarter.
“The recent two months of softness are something that we’ll be watching closely,” Stifel analyst Brice Chan wrote in a note to clients. “But for now, they do not materially shake our bottom-line outlook for the rest of the year nor our thesis.”
Shares of Proficient (Ticker: PAL) were up more than 3% to $19.48 on Aug. 12. The company sold its shares for $15 apiece during its IPO, and its market capitalization is now more than $500 million.
