Proficient Auto Logistics Q4 2024 Earnings Report

Waste Connections EPS Results

• Actual EPS: N/A
• Consensus EPS: C$0.01
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Waste Connections Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $95.00 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Waste Connections Announcement Details

• Quarter: Q4 2024
• Date: 4/4/2025
• Time: Before Market Opens
• Conference Call Date: N/A
• Conference Call Time: N/A

Waste Connections (TSE:WCN) is the third- largest integrated provider of traditional solid waste and recycling services in the North America, operating 91 active landfills (12 are E&P waste landfills), 132 transfer stations, and 68 recycling operations. The firm serves residential, commercial, industrial, and energy end markets. Waste Connections entered the Canadian market with its 2016 merger with Progressive Waste. In 2020, 13% of consolidated revenue was generated from the firm's Canadian segment.

Proficient Auto Logistics Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Please be advised that today's conference is being recorded.

[Operator]

I would now like to

[Operator]

hand the conference over to your speaker today, Brad Wright, Chief Financial Officer. Please go ahead.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Autologistics. Thanks for joining us on Proficient's fourth quarter twenty twenty four earnings call. Under SEC rules, our Form 10 K covering the three and twelve month periods ending 12/31/2024 will include financial statements for both the predecessor accounting entity, Proficient Auto Transport and the successor entity, Proficient Auto Logistics Inc. We are not required to provide and the Form 10 K will not contain pro form a financial data for the combined companies.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

However, our earnings release provides comparative summary combined financial information for the fourth quarter and the twelve months ended December 31 for the combined companies. Note that these results are preliminary as our financial audit for 2024 is not yet complete. Our earnings release can be found under the Investor Relations section of our website at proficientautologistics.com. Our 10 K wind file can also be found under the Investor Relations section of our website. During this call, we will be discussing certain forward looking information.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

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 our earnings release 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 measures that include adjusted operating income, adjusted operating ratio, EBITDA and adjusted EBITDA. Please refer to the portions of our earnings release to provide reconciliations of those profitability measures to GAAP measures such as operating earnings and earnings before income taxes.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

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 the fourth quarter. After our prepared remarks, we will open the call to questions. During the Q and A, please limit yourself to one question plus one follow-up. You may get back into the queue if you have additional questions.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Now, I would like to introduce Rick O'Dell, who

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

will provide the company update. Thank you, Brad, and good afternoon, everyone. I'll start out with an overview of our operations during the fourth quarter and some trends that provide insight into our expectations as we enter 2025. The macro auto industry environment in the fourth quarter was largely a continuation of the weakness we described in

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

the third

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

quarter. October unit volumes were relatively strong, up approximately 6% versus the same month in 2023. But by mid November, the pace of volume slowed, ending down 4% for the quarter versus the fourth quarter of twenty twenty three. As in the third quarter, the larger issue was unit prices, a slack transportation capacity and relatively high dealer inventory resulted in ongoing limited spot opportunities. Persistent downward pressure on spot pricing when opportunities present and a weak demand for dedicated fleet services.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

Our dedicated fleet service generated revenue of $3,700,000 during the fourth quarter compared to $14,200,000 in the fourth quarter of twenty twenty three. Our revenue from spot buy opportunities during the quarter comprised 5% of total revenue versus 14% a year ago. The revenue per unit from spot buys fell by 57% year over year and the spot premium over contract pricing was 16% in the fourth quarter compared to over 100% during the first two quarters of this year or this past year. While we believe this current spot market to be unusually weak, we also do not expect to return to the levels a year ago as the post COVID through early twenty twenty four time period was marked by unique industry supply chain dislocation that drove transportation premiums well above a typical market. Seasonally adjusted annual sales rates or SAR increased over the course of the fourth quarter with industry estimates for all three months above 16,000,000 units, peaking at 16,800,000 in December.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

The increased sales particularly in the second half of the quarter, however, came through a combination of reduction in dealer inventories and new shipments into dealer lots. Average day sales and dealer inventory ended 2024 at approximately forty six days, down from fifty eight days at the November and between sixty and ninety days throughout the third quarter. While the lower level of year end inventory would be more promising for replenishment, demand with sustained sales momentum in January, saw a decline to 15,600,000 units. Despite these various industry headwinds, Perficient achieved approximately 4% growth in both units delivered and total revenue during the fourth quarter versus the third quarter of twenty twenty four. We also continue to strengthen the foundations that will set the stage for future growth and profitability at Perficient, improving adjusted operating ratio by 50 basis points during a period of persistent, at least, week revenues.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

There's recently been a significant amount of media attention regarding disruption in the auto hauling landscape and speculation about the impact to Perficient and others in our industry. As a matter of policy and to adhere to confident reality around OEM carrier relationships, Perficient will not comment about specific competitors or customers. That being said, the weak external environment has been challenging for our industry segment. Reported closure of a top five carrier will reduce near term capacity and likely have widespread impact in the industry. We remain confident that with our service capabilities and the related value proposition,

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

we'll be

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

able to do more for our OEM customers and expect to benefit over time through market share gains. Also, we should note that in addition to some of the reported auto haul disruption in the media, there are several OEMs in the midst of scheduled regional or national bid processes such that a meaningful amount of new vehicle volume transportation is being decisioned across the OEM landscape this year. Proficient is positioning itself and competing for incremental market share that should be sustainable and accretive to our portfolio over the long term. With regard to major integration and strategic initiatives, we continue to progress nicely. On the technology front, all of our operating companies are now using Magnus Technologies Transportation Management System.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

The data captured in this common system is providing key insights into our customer base, operational efficiency and profitability metrics. We continue to advance integration efforts to back office systems and tools, including a common accounting platform, a cohesive HRS platform and cost accounting methodology. For example, particularly in a weaker market, though consistent with our strategic objective, we've prioritized company driver efficiency and mix and have a pipeline of backhaul target pursuits identified and being worked in both new vehicle and the secondary market to capture these opportunities. National procurement efforts continue signed contracts being fully implemented and a broader set of smaller target areas identified to drive ongoing incremental cost savings. That said, we have some inflationary and structural headwinds to offset this as well with items such as insurance costs and expanded coverage driving some unfavorable near term variance in that cost line.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

I'll now turn it back to Brad to cover some key financial highlights.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Thank you, Rick. I'll start with a few summary statistics. All prior year comparisons are for the combined companies. Operating revenue of $95,100,000 in the quarter was up 4% from last quarter, but down 15.9 in the prior year. Units delivered of $521,476 represents a 4% increase over the third quarter, but a 4% decline from the fourth quarter of twenty twenty three.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Revenue per unit excluding fuel surcharge was approximately $169 unchanged from the third quarter, but down approximately 14% from $197 in the fourth quarter of last year. Company deliveries were 37% of revenue in Q4 versus 39% in the third quarter. Sub haul deliveries therefore were 63% of revenue in Q4 versus 61% in the prior quarter. The company had approximately $15,800,000 of cash and equivalents on 12/31/2024. Aggregate debt balances at quarter end were approximately $82,400,000 or net debt of $66,600,000 The increase in net debt from last quarter reflects our financing of fleet growth during the quarter.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Total common shares outstanding ended the quarter at $27,000,000 which is unchanged from that disclosed in our third quarter Form 10 Q. Looking ahead to the first quarter of twenty twenty five, January was challenged by not only a weak SAR month and the typical post year end seasonal volume weakness, but also significant weather events in many areas of the country, such as the Northeast, New Mexico and Oklahoma, Texas and the Gulf Coast that shut down local operations for days at a time. Wildfires in Southern California also delayed loading and delivery intermittently over a period of a few weeks. As a result, quarter to date unit volumes and revenue are lower by 17.5 versus the comparable period of last year. However, we expect to recover much of this shortfall through the end of the quarter based on visibility to the near term pipeline, such that full quarter revenue and profitability are likely to be similar to the fourth quarter of twenty twenty four.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Full year outlook for 2025 remains marked by some large uncertainties in the macro environment, though we do expect sequential momentum as we move into the second quarter and the second half of the year with expectation of improved full year 2025 results over 2024. Operator, we'll now take questions.

[Operator]

Thank you. Our first question comes from the line of Bruce Chan with Stifel. Your line is now open.

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Good afternoon, team. This is Matt Milas calling for Bruce Chan. How are you?

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Good, Matt. Good, Matt.

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Excellent. Just to start off, I know there's likely limited information that you'd like to share or can share at this time, but we're looking to get a better sense of the market share that might be at stake here. During the IPO roadshow, you discussed that both you and Jack Cooper had about low teens market share. However, it seems Jack Cooper might have north of $1,000,000,000 of top line. Is there any way without maybe going to be able to help us put a finer point on those numbers at a minimum maybe from a volume or revenue perspective, how much opportunity could be headed to the market?

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

We really don't have visibility into their revenue levels. So I don't know that we could be very helpful with that. We know fleet wise, they are larger than us.

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Okay. Is that low teen market share figure something that you're comfortable communicating?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

We don't have any updated view of the market relative to what was shared at the investor roadshow. So that would be a reasonable estimate of our understanding at the time.

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Fair enough. And then just on network density, how should we think about prioritization of volume and share here versus density? Is your approach going to be to take as much high quality share as possible and then sort of optimize for density after the fact? Or are we planning to take a more measured approach to what volumes that you guys take on board?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

Yes, I can speak to that a little bit. So volume that fits our existing network is very attractive to us and we're bidding on all of those opportunities. Adjacent volume that ties into an existing base of drivers, assets, terminals is a good growth fit. We are very calculating before we enter an entirely new market and pursue new build traffic. We'd be looking for a concentrated sustainable level of volume to go into new markets and then we build around that both organically and through acquisition.

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

So to answer your question, it's a bit of both, right? Driving density particularly with that opportunity in the existing network is the most attractive price to us, building in adjacent territory, is also a pursuit that we have in mind and they're really not one or the other. We have the bandwidth to do both. We're more thoughtful, I would say, around new market build, if that's helpful.

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Super helpful. I will hop back in the queue. Thanks.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

Thank you.

[Operator]

Our next question comes from the line of Tyler Brown with Raymond James. Your line is now open.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Hey, good afternoon guys.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

Good afternoon, Tyler.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Hey, so obviously there's a lot going on, lots of dynamic things. I get that you're not going to address it all head on. Let me come at it a little bit differently. If I looked at it in real time, are you guys seeing incremental spot opportunities in the market today? And is that spot market premium firming up basically in real time?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

We are seeing what I would describe as episodic opportunities and not per basis spot opportunities in general.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Okay. Okay. So episodic. Okay. If I

[Tyler Brown, Financial Advisor at Raymond James Financial]

go back to Pro Fleet, so I think Pro Fleet is running at around $4,000,000 a quarter, let's call it in revenue. Number one, is that basically at a minimum? And two, how would Pro Fleet react in a capacity challenged market? Could we see that number jump quite a bit if there's a lot of market disruption?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

So to answer your first question, yes. What you're seeing is kind of at that minimum level and we guided last quarter that at minimum levels we see roughly $4,000,000 5 million dollars a quarter depending upon volume and like Nepal where we have those drivers running. If you had dislocation and higher demand for those services, you could see some increase there. But our conservative outlook continues to be that we're going to be at or near contracted minimums as we look to the near term.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Okay. So to be clear, that's kind of implied in the Q1 guidance?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

Yes.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Okay. Rick, you mentioned that spot market premium, I think was 16% of contract and that was versus say 100. You also said that 100 was effectively unusually high. So what would be kind of a normal as we try to learn the auto hauling industry more, what would be kind of a normal spot premium to contract?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

So, Tyler, I think we're also trying to learn what a normal auto ball market looks like. Patricia came into this at a time that was pretty atypical for the market. So to Rick's comment, the stock premium in the twenty twenty two, twenty twenty three time period, I think was elevated in a manner that we're not likely to see again in the current environment. But we think we're on the low side of that continuum now. So what we think might be typical is a stock premium that looks a little more like maybe 25% to 40% and don't take me at exact numbers there, but directionally that would feel a little more like where capacity is in shorter supply.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Okay, that's helpful. You've been just arranged very helpful. And then any just I know that you have this heavy subcontractor capacity pool, but how much slack capacity do you have in the company owned fleet? And maybe even to that, how much do you have it's hard I know it would be harder to say in the subcontractor piece, but how much flat capacity do you feel like you have ready at your fingertips?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

Yes. So on the company fleet side of things, recall that we invested roughly $30,000,000 of capital in new equipment through the second half of last year. So, we have one of the newer fleets in the industry, some of that was replenishment, a lot of that was investment for future growth. And those orders were placed in a market that was relatively stronger than the time at which those orders were delivered. So we do have open assets available.

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

We will be hiring to fill those assets and deploying those assets into the market where we see growth come online. We will continue to invest in truck capacity with growth and have a capital plan to do so again this year. That of course is commensurate with opportunity that we see and we'll measure and balance accordingly. On the sub haul side of things, I would say there is a great deal of capacity available in the marketplace. We have 2,500 sub haul carriers or more across our network that are vetted by us, that are able to do work on behalf of our various operating companies.

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

And as there is very little growth rate in the current environment, The callers are keen on work and providing services. So I would say there's a lot of slot capacity currently.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Okay. Lots of slot capacity. So Brad, last one, just any thoughts on CapEx in 2025? And what would be a reasonable number for 2024

[Tyler Brown, Financial Advisor at Raymond James Financial]

actually?

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

So Amy alluded to that somewhat. I mean, I think we from the time of the IPO through the end of the year, Tyler, we probably had right around just over $30,000,000 of fleet CapEx. And we're expecting for the current year to be in the $25,000,000 to $35,000,000 range as well. And that just and that will evolve as we see opportunities, but that's our expectation today.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Okay, perfect. Excellent. Thank you for the time.

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Thanks, Tyler.

[Operator]

Our next question comes from the line of Ryan Merkel with William Blair. Your line is now open.

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

Hey, everyone. Thanks for taking the question. I wanted to ask on 1Q a little bit more. I think you said January is kind of trending down or at least quarter dates trending down 17.5. Again, you said you thought you'd make up some of that shortfall and you had some visibility.

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

Could you just talk about what that visibility is and why you think you'll make it up?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

Sure. This is Amy. So we get depending on the OEM and the mode by which the cars are dispositions to us, we get visibility of anywhere from one to three weeks. For example, import cars on the water, we get somewhat longer visibility. So we do have an idea of what is coming in the near term pipeline, as well as in the customer conversations.

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

And generally, what we're hearing is a cautious outlook, but some reassurance that volume should continue or should begin to ramp up here, particularly as we move through March and into April. So OEMs are at least guiding us that they think volumes will turn up a bit more March into April and then looking to the back half of the year. So as we look at the first quarter, we said to date near term pipeline in the locations where we participate, we expect to see some stronger volume coming.

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

Got it. Okay. And then just a clarification, I think you said you think 1Q will look like 4Q. So should that should we take that to mean revenue and EBITDA to look like 4Q?

[Bradley Wright, Chief Financial Officer at Proficient Auto Logistics]

Revenue and OR, I would say, yes.

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

Okay. And then I know you're not giving official guidance here, but should we just assume that the spot business and the premium of spot over contracts, we assume that really doesn't change for the next couple of quarters, any reason that it would improve?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

There are reasons that it could improve, but I think you're on the right track there. We don't have a crystal baller here and we are coming into the practice of reporting both the portion of our stock portfolio and what we are seeing in price premium there. So sequentially, I think we will be able to give you additional information as the market for 2025 becomes clearer. But conservatively, I would say it as you suggested.

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

Okay.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

And I would add to that just that we're not anticipating a rebound in the spot market, but given current market dynamics, I said there's probably more opportunities for dislocations where people are taking on new business and they may struggle with that and some of that may come back to the spot market.

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

Yes, that makes sense, Rick. Okay. Last one for me. You mentioned the press release strength of our balance sheet will be a differentiating factor in the marketplace. Can you just talk about does 2025 feel like there's a lot of new business to win just broadly?

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

How are you thinking about that? And am I thinking about that the right way, just given the challenges that the industry is facing and you're probably in a pretty good position relative?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

Yes. I would think about it in two ways. One is over the last couple of quarters, we've shared with you our figures on net new contract wins. And actually to give an update there since the last earnings call, we have had three net new contract wins, two of which are larger than average size. But the point on bringing that up is each quarter we have had net new contract wins, but we have been in a weak market.

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

If the market starts to improve, the benefit of those market share gains should become more visible in our results. And we've talked quite a bit particularly in the last four calls. Contract business is stable profitable business for us and we want to partner with customers in a way where we show up for them day after day with a high service level and work to flex with their needs and volatility. So we want to win in the contract space. We want to participate in the spot market when opportunities present and we can put capacity up against it.

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

But our main focus is sustainable accretive market share growth in the contract business. The other way I would think about that to your question is, Rick mentioned in his opening comments, there are several open bids that are material in scale. A handful or so of OEMs have done either what I would describe as super regional bids or national bids that become effective anywhere from May of this year to as late as January of twenty twenty six. But we have gone and positioned ourselves to gain incremental business with those key customers with the strength of our solar network and the offering and we feel pretty good about how we are positioned to grow coming out of those bid. So as we look at market share through the year, as those are dispositioned and those new contract terms take effect, we would look to some additional opportunity in the back part of the year from that.

[Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C]

Got it. That's very helpful. Thank you. Pass it on.

[Operator]

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

[Alexander Paris, President & Senior MD at Barrington Research Associates]

Hi, guys. Thanks for fitting me in and taking my questions. Rick, I want to come at that big question another way. Given your experience in the LTL space, CEO of Saia for fourteen or finished as CEO, but was there for fourteen years, I think fourteen years as CEO. And you're still the non executive Chairman today.

[Alexander Paris, President & Senior MD at Barrington Research Associates]

So you live through the bankruptcy of Yellow Roadways. And I'm wondering if you could maybe create a parallel and even a timeline and what should we expect first? I would think if the number two player in the auto hauling business exits the business, that volume needs to find a new way to the dealerships. So does it start with brokers? Does it include bids?

[Alexander Paris, President & Senior MD at Barrington Research Associates]

Whatever parallel you can make to the LTL business, if there is a parallel to make would be helpful, I think.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

Yes. I think, if you look at the cycle and how customers would generally react to a situation like that is, they may have a backup contracted carrier and that business would potentially move to that backup carrier, right out the gate and then they would probably put it out to bid over a period of time. So, there's probably there's some immediate impact depending on how you're positioned with the OEMs with pricing in place. This business is a little different than LTL where you may have a business that's under contract, but you're not getting any shipments and then they could just begin shipping with you. Our this business is a little different than that just because we don't have it's not as much of a network capacity business where you could just pick up more business.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

You have to have the tractor trailer and the driver in the right location to be able to service the requirements. So, our solution to that obviously is to near term would be to source with subcontractor capacity and then optimize with in source your own drivers there over some period of time. And we're positioned to react to that those opportunities quickly. And then as you probably would expect that as the industry goes through a transition of the incremental business, some carriers handle it better than others. And so a lot of times the customers again will try to re optimize over a period of time.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

So I would imagine there's kind of a two leg impact to the closure would be some immediate sourcing of the business and then there's probably going to be a second round of opportunities coming at us.

[Alexander Paris, President & Senior MD at Barrington Research Associates]

Has Perficient seen any impact from that first round yet?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

We are seeing some impact. The other thing I would share, Alex, is from our conversations with the OEMs, this situation is broader than just the transportation of the cars. It really is a risk management exercise for the OEM from their production to the dealer supply chain. So those have been upstream. They are looking to be sure they don't see can't shutdown as a result of disruption in transportation carriers.

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

And so there's a puzzle with a lot of pieces here that our customers are trying to solve and some of those things have to be solved in multiple sequences and rounds. And to Rick's point, I think that will in some sense play out over time.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

So there's a near I would just comment there is some near, nearly immediate short term impact that we feel will offset some of the current market weakness that we're experiencing and that would be indicative of a kind of a recovery volumes, particularly in March from the softness that we've seen year to date.

[Alexander Paris, President & Senior MD at Barrington Research Associates]

So is that part of that Q1 forecast? Is there some sort of assumption for some volume pickup from that event?

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

Yes, it is.

[Alexander Paris, President & Senior MD at Barrington Research Associates]

Got you. And then as you both said, then there's that second opportunity once they go through the risk management exercise to take on more volume down the road?

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

Right.

[Alexander Paris, President & Senior MD at Barrington Research Associates]

And is there any reason that that Perficient shouldn't get its fair share of this incremental volume that's coming out into the market for the other players, these market share opportunities?

[Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics]

The only caveat I would place on that is geographic again to the earlier comments of where our network is strong and where we have existing density. There has not necessarily been a high overlap with certain competitors. So, I would there's a component there, but all else equal, proficient as well positioned to participate in sort of reallocation among industry players should that occur.

[Alexander Paris, President & Senior MD at Barrington Research Associates]

Got you. That's helpful. I appreciate the additional color.

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Thank you.

[Operator]

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

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Great. Thanks for allowing us to follow-up here. Just curious to hear about how you're thinking about M and A. Is there an appetite for it from your side, especially with your needed capacity requirements? Does the M and A market potentially get more competitive from here?

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Any color around that would be great.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

Yes. I guess, what I would tell you is, I mean, we have a pipeline of opportunities that will be a nice fit for us providing synergies and adjacent geographical capacity. I would say, we're obviously managing that or balancing that against other priorities and opportunities that we have. But I would say, we're still active in the marketplace and we would probably expect one to two smaller acquisitions to occur this year.

[Matthew Milask, Associate Equity Analyst at Stifel Financial]

Great color. Thank you.

[Operator]

Thank you. And I'm currently showing no further questions at this time. I'd like to hand the call back over to Rick O'Dell for closing remarks.

[Richard O'Dell, CEO & Chairman at Proficient Auto Logistics]

All right. Well, thank you so much for your interest in Perficient Auto Logistics. We're very excited about the opportunities in the marketplace and confident in our execution capabilities.

[Operator]

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

Participants

Analysts

• Bradley Wright, Chief Financial Officer at Proficient Auto Logistics
• Richard O'Dell, CEO & Chairman at Proficient Auto Logistics
• Matthew Milask, Associate Equity Analyst at Stifel Financial
• Amy Rice, President and Chief Operating Officer at Proficient Auto Logistics
• Tyler Brown, Financial Advisor at Raymond James Financial
• Ryan Merkel, Co-Group Head–Industrials at William Blair & Company, L.L.C
• Alexander Paris, President & Senior MD at Barrington Research Associates