Proficient signs agreement to purchase Western car carrier

Proficient Auto Logistics executives have signed an agreement to buy a Utah-based carrier with terminals in seven states. The acquisition will boost Proficient’s earnings per share by about 20%.

Proficient, led by former Saia Inc. CEO Rick O’Dell, expects to close on its purchase of Auto Transport Group by the end of the month. The move would add a business with more than 100 vehicles, about 80 people and about 200,000 deliveries a year to Florida-based Proficient, which in May completed an initial public offering that funded the acquisition of five other regional carriers.

Proficient did not disclose specific terms of the ATG acquisition. However, given the size of the company relative to Proficient as a whole and CFO Brad Wright’s comments that it would be structured similarly to IPO-funded acquisitions, the deal appears to be worth around $30 million.

“They are operating 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 will add about 25 cents per share to Proficient’s net income on a year-over-year basis, which analysts forecast will be $1.30 per share in 2025.

In addition to its home state, ATG operates terminals in Arizona, California, Montana, Nevada, Oregon and Washington. Its operations will dovetail nicely with two California companies — Deluxe Auto Carriers and Sierra Mountain Group — that O’Dell and his team acquired a few months ago.

News of the ATG deal came as Proficient reported second-quarter results, which showed a net loss of nearly $3.6 million on operating income of $107 million. The net loss included nearly $6.7 million in stock-based compensation expense related to the company’s IPO; excluding those expenses and other items, adjusted operating income was $8.7 million.

See also: Car transport company Proficient raises $200 million in IPO

The company’s adjusted operating ratio for the quarter was 91.8%, an improvement of nearly one percentage point compared to the results of its constituent companies in the same period in 2023. O’Dell and Wright said their teams have made significant progress integrating the five companies Proficient acquired immediately after going public this spring and expect to overcome several more hurdles by early fall.

Another positive indicator from the second quarter was an increase in backhaul work to reduce empty miles on Proficient’s routes. The company completed 352 such jobs during the quarter, and Wright noted that improvements on that front are still in their infancy. In total, Proficient delivered more than 507,700 units in the three months ended June 30, up more than 10% from the 2023 quarter.

One potential cloud on the horizon for Proficient is a summer slowdown in automotive production, a combination of both normal seasonal downtime and some manufacturers pulling back in the face of higher inventories. O’Dell also mentioned that a June outage at dealer software provider CDK Global also slowed volumes toward the end of the second quarter.

The weak volume trend continued in July, O’Dell said, with total revenue down about 11% year over year. That prompted Proficient leaders to lower their growth forecast from 8% to mid-single digits in the third quarter.

“The last two months of easing are something we’ll be watching closely,” Stifel analyst Brice Chan wrote in a note to clients. “But for now, they won’t materially impact our earnings outlook for the rest of the year or our thesis.”

Proficient (ticker: PAL) shares rose more than 3% to $19.48 on Aug. 12. The company sold its shares for $15 a share during its initial public offering and now has a market capitalization of more than $500 million.