Proficient Auto Logistics, Inc 10-Q for FY2026 Q1
Proficient Auto Logistics, Inc (PAL)
About this 10-Q
Proficient Auto Logistics, Inc filed this 10-Q on May 14, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $93.69M
- down 1.6% from $95.21M a year earlier
- Net loss
- $6.49M
- compared with a net loss of $3.19M a year earlier
- Diluted EPS
- -$0.23
- compared with -$0.12 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
For the quarterly period ended
or
For the transition period from _______ to _______
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| Large accelerated filer ☐ | Accelerated filer ☐ | |||
| Smaller reporting company | ||||
| Emerging growth company |
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether
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The registrant had
Index
i
PROFICIENT AUTO LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, less allowance for credit losses (2026 - $ | ||||||||
| Net investment in leases, current portion | ||||||||
| Maintenance supplies | ||||||||
| Assets held for sale | ||||||||
| Income tax receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net of accumulated depreciation and amortization (2026 - $ | ||||||||
| Operating lease right-of-use assets | ||||||||
| Net investment in leases, less current portion | ||||||||
| Deposits | ||||||||
| Goodwill | ||||||||
| Intangible assets, net (2026 - $ | ||||||||
| Other long-term assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Finance lease liabilities, current portion | ||||||||
| Operating lease liabilities, current portion | ||||||||
| Long-term debt, current portion | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Operating lease liabilities, less current portion | ||||||||
| Long-term debt, less current portion | ||||||||
| Deferred tax liability, net | ||||||||
| Other long-term liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 15) | ||||||||
| Stockholders’ Equity: | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock at cost | ( | ) | ||||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.
1
PROFICIENT AUTO LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Operating Revenue | ||||||||
| Revenue, before fuel surcharge | $ | $ | ||||||
| Fuel surcharge and other reimbursements | ||||||||
| Other Revenue | ||||||||
| Lease Revenue | ||||||||
| Total Operating Revenue | ||||||||
| Operating Expenses | ||||||||
| Salaries, wages and benefits | ||||||||
| Stock-based compensation | ||||||||
| Fuel and fuel taxes | ||||||||
| Purchased transportation | ||||||||
| Truck expenses | ||||||||
| Depreciation | ||||||||
| Intangible amortization | ||||||||
| (Gain) Loss on sale of equipment | ( | ) | ||||||
| Insurance premiums and claims | ||||||||
| General, selling, and other operating expenses | ||||||||
| Total Operating Expenses | ||||||||
| Operating Loss | ( | ) | ( | ) | ||||
| Other income and expense | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Acquisition Costs | ( | ) | ||||||
| Other income, net | ||||||||
| Total other expense, net | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax benefit | ( | ) | ( | ) | ||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Loss Per Share | ||||||||
| Basic & Diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Shares | ||||||||
| Basic & Diluted | ||||||||
The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.
2
PROFICIENT AUTO LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
| Common Stock | Additional Paid | Accumulated | Total | |||||||||||||||||
| Shares | Amount | in Capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common Stock | Additional Paid in | Accumulated | Treasury | Total | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Stock | Equity | |||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Repurchase of Shares | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.
3
PROFICIENT AUTO LOGISTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash flows provided by operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Provision for credit losses | ||||||||
| Depreciation and amortization expense | ||||||||
| (Gain) Loss on sale of equipment | ( | ) | ||||||
| Interest income | ( | ) | ( | ) | ||||
| Amortization of debt issuance costs | ||||||||
| Deferred income tax benefit | ( | ) | ( | ) | ||||
| Operating lease expense | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Net investment in leases | ||||||||
| Maintenance supplies | ( | ) | ( | ) | ||||
| Income tax receivable | ( | ) | ||||||
| Prepaid expenses and other assets | ||||||||
| Deposits | ( | ) | ( | ) | ||||
| Accounts payable | ||||||||
| Accrued liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash flows provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Proceeds from sale of equipment | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Net cash flows used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from line of credit | ||||||||
| Repayments of line of credit | ( | ) | ||||||
| Repayments of long-term debt | ( | ) | ( | ) | ||||
| Repayments of finance lease obligations | ( | ) | ( | ) | ||||
| Repurchase of common stock | ( | ) | ||||||
| Net cash flows used in financing activities | ( | ) | ( | ) | ||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Noncash investing and financing activity: | ||||||||
| Equipment and Services financed through long-term debt | $ | $ | ||||||
The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.
4
PROFICIENT AUTO LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Nature of operations
AH Acquisition Corp. was formed on June 13, 2023, pursuant to the laws of the State of Delaware to become a holding company for the consolidation of several operating companies within the automobile transportation industry. Subsequently, on October 17, 2023, AH Acquisition Corp. legally changed its name to Proficient Auto Logistics, Inc (“Proficient,” the “Company,” or “we”).
Proficient is an industry leading specialized freight company focused on providing auto transportation and logistics services. The Company offers a broad range of auto transportation and logistics services, primarily focused on transporting finished vehicles from automotive production facilities, marine ports of entry, or regional rail yards to auto dealerships around the country. We have developed a differentiated business model due to our scale, breadth of geographic coverage, and embedded customer relationships with leading auto original equipment manufacturing companies (“OEMs”). Our customers range from large, global auto companies, to electric vehicle (“EV”) producers. Additional customers include auto dealers, auto auctions, rental car companies, and auto leasing companies. Proficient operates an asset-based Company Drivers service (“Company Drivers”) on behalf of the manufacturers. In addition, Proficient serves OEMs and other customers through independent contractors and third-party carriers under an asset-light freight model (“Subhaulers”).
Note 2 — Summary of significant accounting policies
Basis of Presentation — The condensed consolidated financial statements and footnotes have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Principles of Consolidation — The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and accounts have been eliminated. The condensed consolidated financial statements include the impact of push-down accounting with acquisition related costs pushed down to the corresponding reporting entity.
Seasonality — In our industry, results of operations generally follow a seasonal pattern. Volumes in the first quarter are typically lower due to less consumer demand, customers reducing shipments following year end, and inclement winter weather. At the same time, operating expenses generally increase, and tractor productivity of the Company's fleet and independent contractors decreases during the winter months due to decreased fuel efficiency, increased cold-weather-related equipment maintenance and repairs, and increased insurance claims and costs attributed to higher accident frequency from weather conditions. These factors typically lead to lower operating profitability, as compared to other parts of the year. Additionally, beginning in the latter half of the third quarter and continuing into the fourth quarter, the Company typically experiences surges in volumes from customers pushing to move units before year end. Additionally, macroeconomic trends and cyclical changes in the auto haul industry, including imbalances in supply and demand, can override the seasonality faced in the industry.
5
Accounts Receivable — Accounts
receivable represents customer obligations due under normal trade terms. The Company reviews accounts receivable on a continuing basis
to determine if any receivables are potentially uncollectible. The Company writes off uncollectible receivables based on specifically
identified amounts determined to be uncollectible. Based on the information available, the Company recorded an allowance for credit losses
of approximately $
Business Combinations — The Company accounts for business combinations using the acquisition method pursuant to ASC 805, Business Combinations. For each acquisition, the Company recognizes the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. Valuations of certain assets acquired, including customer relationships, and trade names involve significant judgment and estimation. The Company uses independent valuation specialists to help determine fair value of certain assets and liabilities. Valuations utilize significant estimates, such as forecasted revenues and profits. Changes in these estimates could significantly impact the value of certain assets and liabilities. ASC 805 establishes a measurement period to provide the Company with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date. Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed as of the acquisition date. The Company expects to complete the final fair value determination of the assets acquired and liabilities assumed as soon as practicable within the measurement period, but not to exceed one year from the acquisition date.
Goodwill — Goodwill is recorded when the purchase price paid in a business combination exceeds the fair value of assets acquired and liabilities assumed. Goodwill is reviewed for impairment on an annual basis with the assessment date of November 30th, or upon an occurrence of an event or changes in circumstances that indicate that the carrying value may not be recoverable.
Goodwill impairment is the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. When testing goodwill for impairment, the Company may first perform a qualitative assessment to determine whether the fair value of a reporting unit is less than its carrying amount. The Company then completes a quantitative impairment test if the qualitative assessment indicates that it is more likely than not that the reporting unit’s fair value is less than the carrying value of its assets. As part of the Company’s impairment analysis, fair value of a reporting unit is generally determined using the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping, as well as recent guideline transactions. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions with respect to the business and financial performance of the Company’s reporting units. These estimates and assumptions primarily include, but are not limited to, the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industry in which we compete, discount rates, terminal growth rates, forecasts of revenue, operating income, working capital requirements, and capital expenditures.
If the estimated fair value of the reporting unit exceeds the carrying value, goodwill is not considered impaired, and no additional steps are needed. If, however, the fair value of the reporting unit is less than its carrying value, then the amount of the impairment loss is the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
Intangible Assets, Net — The Company’s intangible assets consist of acquired customer relationships and trade names. Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method. Intangible assets historically have been acquired through business combinations and recorded at their purchase date estimated fair value.
When determining the fair
value of acquired intangible assets, management makes significant estimates and assumptions, including, but not limited to, expected long-term
market growth, customer retention, future expected operating expenses, costs of capital and appropriate discount rates. Finite-lived intangible
assets are amortized using the straight-line method over their respective estimated useful lives. The Company amortizes its intangible
assets using the straight-line method over their estimated useful lives of
6
Stock-Based Compensation — Restricted Stock Units (“RSUs”) have been granted to eligible employees and independent board members of the Company. The Company has recorded the compensation expense within stock-based compensation in the consolidated statement of operations. In accounting for stock-based compensation awards, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant date fair value of those awards. Compensation expense for time-vesting awards is recognized ratably using the straight-line attribution method over the vesting period, which is considered to be the requisite service period. The estimated fair value of the RSUs was determined using the fair value of the Company’s common stock on the grant date.
Fair Value Measurements — The Company determines fair value based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, as determined by either the principal market or the most advantageous market in which it transacts. The Company applies fair value accounting for all the financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
| Level 1 – | Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; |
| Level 2 – | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
| Level 3 – | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions about current market conditions and require significant management judgment or estimation. |
As of March 31, 2026 and December 31, 2025, the carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other current assets and liabilities approximates fair value due to the short maturities of these instruments. Interest rates on borrowings under long-term debt and finance lease obligations approximate the interest rates that would currently be available to the Company under similar terms, and as such, carrying value approximates fair value. Certain assets, including goodwill, intangible assets and other long-lived assets, are also subject to measurement at fair value on a nonrecurring basis (1) when they are acquired during a business combination as discussed in Note 3, and (2) if they are deemed to be impaired as a result of an impairment review.
7
The CODM uses the Segment Operating profit or loss measure to evaluate the profitability and operational efficiency of each segment, identify areas for improvement, and make informed decisions about resource allocation, strategic planning, and performance targets. This measure of segment profit or loss is consistent with the measurement principles used in the consolidated financial statements. The CODM reviews the segment Operating profit or loss on a quarterly basis during executive meetings and uses this information to assess segment performance (analyzing margins, revenue changes, and expense management), allocate resources (capital deployment and personnel allocation to executive strategic initiatives), strategic planning (setting short and longer term goals for expansion), and performance targets (establishing key performance indicators, monitoring progress, and revising plans).
Accounting Pronouncements Not Yet Adopted –
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40), which removes project development stages when developing internal use software. The ASU is effective for fiscal years beginning after December 15, 2027, while early adoption is permitted. The Company is currently assessing any changes to capitalization that may be required.
Note 3 — Business combinations
Acquisition of the Founding Companies
On December 21, 2023, Proficient
Auto Logistics, Inc. entered into agreements to acquire in multiple, separate acquisitions
The various agreements to acquire the Founding Companies are briefly described below:
| ● | The Company entered into a Membership Interest Purchase Agreement and a Contribution Agreement to acquire all of the outstanding equity of Delta for cash and shares of common stock. Delta’s main business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used cars from and to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the Southeast and East Coast of the United States. |
| ● | The Company entered into a Stock Purchase Agreement and a Merger Agreement to acquire all of the outstanding equity of Deluxe for cash, shares of common stock and contingent consideration in the form of an earn-out provision. The earn-out provision which provided that the Company would make earn-out payments, fifty percent ( |
8
| ● | The Company entered into a Stock Purchase Agreement and a Contribution Agreement to acquire all of the outstanding equity of Proficient Transport for cash and shares of common stock. Proficient Transport’s primary business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used cars from and to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the South, Southeast and East Coast of the United States. |
| ● | The Company entered into a Stock Purchase Agreement and a Merger Agreement to acquire all of the outstanding equity of Sierra for cash and shares of common stock. Sierra’s primary business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used cars from and to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the West Coast and the Midwest of the United States. |
| ● | The Company entered into a Stock Purchase Agreement and a Contribution Agreement to acquire all of the outstanding equity of Tribeca for cash and shares of common stock. Tribeca’s primary business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used cars from and to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the East Coast and Southeast of the United States. |
The acquisitions were accounted for using the acquisition method of accounting, in accordance with ASC 805, Business Combinations. Proficient Auto Logistics, Inc. was the accounting acquirer. The tables below present the consideration transferred and the allocation of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition of the Founding Companies based on the respective fair values as of May 13, 2024.
The preliminary purchase price allocation was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject to change within the measurement period (defined as one year following the acquisition date). As a result of further refining its estimates and assumptions since the date of the acquisition, the Company recorded measurement period adjustments to the initial opening balance sheet as shown in the tables below. Adjustments were primarily made to property and equipment, operating lease right-of-use assets, goodwill, and deferred income taxes.
Total Acquisition Date Amounts Recognized as of May 12, 2025
| Delta | Deluxe | Proficient Transport | Sierra | Tribeca | Total | |||||||||||||||||||
| Purchase consideration | ||||||||||||||||||||||||
| Cash consideration paid | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Stock consideration issued | ||||||||||||||||||||||||
| Contingent consideration – earn-out | ||||||||||||||||||||||||
| Total purchase price | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Allocation of purchase price | ||||||||||||||||||||||||
| Fair value of net assets acquired | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Goodwill | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
9
The Company recognized intangible assets as follows:
| Useful Life | Delta | Deluxe | Proficient Transport | Sierra | Tribeca | Total | ||||||||||||||||||||
| Customer relationships | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Trade names | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
The Combinations resulted
in $
On August 8, 2024, PAL Stock
Acquiror, Inc. and PAL Merger Sub, LLC, subsidiaries of the Company, executed an Agreement and Plan of Merger (the “Merger Agreement”)
with Auto Transport Group, LC, (“ATG,” which was converted to a limited liability company after closing) pursuant to which
the Company acquired all of the outstanding equity of ATG to expand the Company’s geographic presence and services offered (“ATG,”
which was converted to a limited liability company after closing). ATG provides vehicle transportation and shipping services in the Mountain
Western region. The transaction closed on August 15, 2024. The acquisition was accounted for using the acquisition method of accounting,
in accordance with ASC 805, Business Combinations. Proficient Auto Logistics, Inc. was the accounting acquirer, and the Company
elected to apply pushdown accounting.
| December 31, 2024 | Adjustment | August 16, 2025 | ||||||||||
| Purchase consideration | ||||||||||||
| Cash consideration paid | $ | ( | ) | $ | ||||||||
| Stock consideration issued | ||||||||||||
| Total purchase price | $ | ( | ) | $ | ||||||||
| Allocation of purchase price | ||||||||||||
| Fair value of net assets acquired | $ | $ | ||||||||||
| Goodwill | $ | ( | ) | $ | ||||||||
The Company recognized intangible assets as follows:
| Useful Life | Auto Transport Group | |||||
| Customer relationships | $ | |||||
| Trade names | ||||||
| Total | $ | |||||
10
The acquisition of ATG resulted in $
Utah Truck & Trailer Acquisition
On November 1, 2024, PAL Stock Acquiror, Inc.
purchased Utah Truck & Trailer Repair, LLC, (“UTT”), a repair facility located at the ATG headquarters terminal in Ogden,
Utah. The Company purchased UTT for $
Brothers Auto Transport Acquisition
On April 1, 2025, PAL Stock
Acquiror, Inc. purchased all the outstanding equity of Brothers Auto Transport, LLC, (“Brothers”), which provides vehicle
transportation and shipping services in the Northeast and MidAtlantic regions of the country. Brothers was purchased for $
PVT Truck and Trailer Acquisition
On May 27, 2025, Proficient Repairs Services,
LLC purchased PVT Truck & Trailer Repair, LLC, (“PVT”), a repair facility located at the Brothers headquarters terminal
in Wind Gap, Pennsylvania. The Company purchased PVT for $
11
Note 4 — Goodwill
Goodwill is evaluated for impairment annually as of November 30, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.
As of November 30, 2025, the
Company completed a quantitative impairment analysis for goodwill related to its Company Drivers and Subhauler reporting units during its
annual assessment. Based on this analysis, the Company recognized goodwill impairment of $
As part of the Company’s impairment analyses, fair value of the reporting units were determined using both the income and market approach. The income approach requires management to estimate a number of factors, including the projected future operating results, economic projections, anticipated future cash flow and discount rates. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping as well as recent guideline transactions.
The determination of the fair value of the reporting unit requires the Company to make significant estimates and assumptions related to the business and financial performance of the Company’s reporting units. These estimates and assumptions primarily include but are not limited to; the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industry which the Company competes, discount rates, terminal growth rates, forecasts of revenue, operating income, depreciation, amortization, working capital requirements and capital expenditures. Future increases in discount rates or deterioration in the observable prices for guideline companies could result in further goodwill impairment in subsequent periods.
The changes in the carrying amount of goodwill and allocation to reportable segment are as follows:
| Company Drivers | Subhaulers | Consolidated | ||||||||||
| Balance – December 31, 2024 | $ | $ | $ | |||||||||
| Additions | ||||||||||||
| Adjustments | ( | ) | ||||||||||
| Impairment | ( | ) | ( | ) | ||||||||
| Balance – December 31, 2025 | $ | $ | $ | |||||||||
| Adjustments | ||||||||||||
| Balance – March 31, 2026 | $ | $ | $ | |||||||||
Note 5 — Intangible assets, net
| March 31, 2026 | ||||||||||||
| Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||
| Customer relationships | $ | $ | ( | ) | $ | |||||||
| Trade names | ( | ) | ||||||||||
| Total | $ | $ | ( | ) | $ | |||||||
| December 31, 2025 | ||||||||||||
| Gross carrying amount | Accumulated amortization and impairment | Net carrying amount | ||||||||||
| Customer relationships | $ | $ | ( | ) | $ | |||||||
| Trade names | ( | ) | ||||||||||
| Total | $ | $ | ( | ) | $ | |||||||
12
In the three months ended
March 31, 2026 and 2025, respectively, amortization expense was $
As of March 31, 2026, the expected amortization expense associated with the Company’s identifiable intangible assets with estimable useful lives over the next five years was as follows:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
As of March 31, 2026, the
weighted average amortization period for all intangible assets was
Note 6 — Property and equipment
Property and equipment, at cost, consist of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||
| Land | $ | $ | ||||||
| Buildings and improvements | ||||||||
| Furniture and equipment | ||||||||
| Machinery and equipment | ||||||||
| Software and computer equipment | ||||||||
| Transportation equipment | ||||||||
| Less accumulated amortization and depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
The Company recorded a gain
on the disposal of equipment of $
Note 7 — Accrued liabilities
Accrued liabilities consist of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||
| Claims, insurance and litigation reserves | $ | $ | ||||||
| Deferred leased to purchase payments | ||||||||
| Salaries, wages and benefits | ||||||||
| Accrued purchased transportation | ||||||||
| Owner operator deposits | ||||||||
| Escrow payments | ||||||||
| Other accrued expenses | ||||||||
| Accrued liabilities | $ | $ | ||||||
Note 8 — Income taxes
The effective tax rates for
the three months ended March 31, 2026 and March 31, 2025 were
The Company has uncertain tax positions.
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Note 9 — Line of credit
On November 8, 2024, Proficient
entered into a credit facility with a commercial bank that includes up to $
Note 10 — Long-term debt
| March 31, 2026 | December 31, 2025 | |||||||
| Equipment and vehicle notes payable to financial institutions, requiring monthly principal and interest payments totaling $ | $ | $ | ||||||
| Term Debt to Pinnacle Bank, requiring principal payments of $ | ||||||||
| Less: unamortized debt issuance costs | ( | ) | ( | ) | ||||
| Less: current maturities | ( | ) | ( | ) | ||||
| Total long-term debt | $ | $ | ||||||
| (1) |
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Future maturities of long-term debt are as follows:
| For the quarter ending March 31: | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total | $ | |||
The Company capitalized debt
issuance costs of
Note 11 — Leases
Lessee —
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Operating lease cost | $ | $ | ||||||
| Finance lease costs: | ||||||||
| Amortization of finance lease assets | ||||||||
| Interest on lease liabilities | ||||||||
| Short-term lease costs | ||||||||
| Total lease costs | $ | $ | ||||||
As of March 31, 2026 and
March 31, 2025, the weighted-average discount rate for operating leases was
As of March 31, 2026, future maturities of the lease liabilities were as follows:
| Operating leases | ||||
| For the quarter ending March 31: | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total undiscounted cash flows | ||||
| Less: present value factor | ||||
| Total lease liabilities | ||||
| Less: current portion – | ( | ) | ||
| Total long-term lease liabilities | $ | |||
15
Lessor — The
Company leases various types of transportation-related equipment to independent third parties under lease contracts which are generally
for a term of one to eight years and contain an option for the lessee to return or purchase the equipment. Depending on the lease
agreement, the Company has recorded these as either sales-type leases or operating leases. The Company assesses a third party’s
ability to pay based on the financial capacity and intention to pay, considering all relevant facts and circumstances, including past
experiences with that third party or similar third parties. For those leases classified as sales-type leases where collectability of lease
payments is not probable at lease commencement, the Company does not derecognize the underlying asset, and the payments received for these
leases are recorded as deposit liabilities. Deposit liabilities of $
Lease receivables are carried
at the aggregate of lease payments receivable plus the estimated residual value of the leased assets and any initial direct costs incurred
to originate these leases, less unearned income, which is accreted to interest income over the lease term using the interest method. Lease
receivables of $
For the three months ended
March 31, 2026 and 2025, the Company recorded sales-type lease revenue of $
For the three months ended
March 31, 2026 and 2025, the Company recorded interest income of $
As of March 31, 2026, future minimum lease payments expected to be collected were as follows:
| For the quarter ending March 31: | ||||
| 2026 | $ | |||
| 2027 | ||||
| Total undiscounted cash payments | ||||
| Less: present value factor | ( | ) | ||
| Total net investment in lease | ||||
| Less: current portion | ( | ) | ||
| Total net investment in lease, less current portion | $ | |||
16
Note 12 — Stock-based compensation
In May 2024, the Company adopted
its 2024 Long-Term Incentive Plan (“the 2024 Plan”). The 2024 Plan provides for the grant of incentive stock options (“ISOs”)
to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options (“NSOs”), stock
appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees
and directors, including employees of our affiliates. After taking into account restricted stock units granted in connection with the
IPO in concurrent business combinations (Note 3), the maximum number of shares of our common stock that may be issued under our 2024 Plan
is
The awards under the 2024
Plan vest over periods ranging between
If an employee terminates employment with the Company prior to awards vesting, the unvested awards are forfeited and the historical compensation expense is reversed in the period of termination, unless the employee terminates without cause then a pro-rata portion of the then-unvested awards will vest immediately.
Shares subject to stock awards
granted under the 2024 Plan that expire or terminate do not reduce the number of shares available for issuance under the 2024 Plan. Additionally,
shares become available for future grants under the 2024 Plan if they were stock awards issued under the 2024 Plan and we repurchase them
or they are forfeited. This includes shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations
related to a stock award. As of March 31, 2026, there were
Restricted Stock Units
Total compensation expense
related to restricted stock awards was $
A summary of all restricted stock units outstanding as of March 31, 2026, and activity during the three month period ended March 31, 2026, is presented below:
| Number of Shares | Weighted Average Grant Date Fair Value | Total Grant Date Fair Value | Weighted Average Remaining Contractual Life (years) | |||||||||||||
| Outstanding, December 31, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Vested | ( | ) | ( | ) | ( | ) | ||||||||||
| Canceled/Forfeited | ( | ) | ( | ) | ( | ) | ||||||||||
| Outstanding, March 31, 2026 | $ | |||||||||||||||
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On March 2, 2026, the Company
announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase up to $
Note 13 — Segment reporting
The Company’s business
is organized into
The following table summarizes information about our reportable segments:
| Three Months Ended March 31, 2026 | Company Drivers | Subhaulers | Total | |||||||||
| Revenue | ||||||||||||
| Revenue, before fuel surcharge | $ | $ | $ | |||||||||
| Fuel surcharge and other reimbursements | ||||||||||||
| Other Revenue | ||||||||||||
| Lease Revenue | ||||||||||||
| Segment Revenue | $ | $ | $ | |||||||||
| Reconciliation of revenue: | ||||||||||||
| Other revenues(2) | ||||||||||||
| Total Consolidated | ||||||||||||
| Less: | ||||||||||||
| Salaries, wages and benefits | ||||||||||||
| Fuel and fuel taxes | ||||||||||||
| Purchased transportation | ||||||||||||
| Truck expenses | ||||||||||||
| Depreciation | ||||||||||||
| Other segment items(1) | ||||||||||||
| Segment Operating Profit/(Loss) | $ | ( |
) | $ | $ | |||||||
| Reconciliation of segment operating profit to income before income taxes: | ||||||||||||
| Other profit/(loss)(2) | ( |
) | ||||||||||
| Interest Expense | ( |
) | ||||||||||
| Acquisition Costs | ||||||||||||
| Other Income, net | ||||||||||||
| Income Before Income Taxes | $ | ( |
) | |||||||||
| Other Segment Disclosures: | ||||||||||||
| Depreciation and amortization(3) | $ | $ | $ | |||||||||
| Intangible amortization(2) | ||||||||||||
| Depreciation and Amortization | $ | |||||||||||
| (1) |
| (2) |
| (3) |
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| Three Months Ended March 31, 2025 | Company Drivers | Subhaulers | Total | |||||||||
| Revenue | ||||||||||||
| Revenue, before fuel surcharge | $ | $ | $ | |||||||||
| Fuel surcharge and other reimbursements | ||||||||||||
| Other Revenue | ||||||||||||
| Lease Revenue | ||||||||||||
| Segment Revenue | $ | $ | $ | |||||||||
| Reconciliation of revenue: | ||||||||||||
| Other revenues(2) | ||||||||||||
| Total Consolidated | $ | |||||||||||
| Less: | ||||||||||||
| Salaries, wages and benefits | ||||||||||||
| Fuel and fuel taxes | ||||||||||||
| Purchased transportation | ||||||||||||
| Truck expenses | ||||||||||||
| Depreciation | ||||||||||||
| Other segment items(1) | ||||||||||||
| Segment Operating Profit/(Loss) | $ | $ | $ | |||||||||
| Reconciliation of segment operating profit to income before income taxes: | ||||||||||||
| Other profit/(loss)(2) | $ | ( | ) | |||||||||
| Interest Expense | ( | ) | ||||||||||
| Acquisition Costs | ( | ) | ||||||||||
| Other Income, net | ||||||||||||
| Income Before Income Taxes | $ | ( | ) | |||||||||
| Other Segment Disclosures: | ||||||||||||
| Depreciation and amortization(3) | $ | $ | $ | |||||||||
| Intangible amortization(2) | ||||||||||||
| Depreciation and Amortization | $ | |||||||||||
| (1) |
| (2) |
| (3) |
19
Note 14 — Loss per share
Basic loss per share is based upon the weighted average common shares outstanding during each year. Diluted loss per share is based on the basic weighted earnings per share with additional weighted common shares for common stock equivalents. During the three months ended March 31, 2026 and 2025, the Company had outstanding restricted shares of common stock to certain of our employees and directors, under the Company’s restricted stock award plans. The diluted shares include the dilutive effect of restricted stock units based on the treasury stock method.
A reconciliation of the numerator (net loss) and denominator (weighted average number of shares outstanding of the basic loss per share) for the three months ended March 31, 2026 and 2025 is as follows:
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Numerator: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted-Average Number of Shares of Common Stock | ||||||||
| Basic Loss per Share | $ | ( | ) | $ | ( | ) | ||
The Company excluded
20
Note 15 — Commitments and contingencies
The Company is involved in certain claims and pending litigation primarily arising in the normal course of business. The majority of these claims relate to workers compensation, auto collision and liability, and physical and cargo damage. The Company expenses legal fees as incurred and accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. It is at least reasonably possible that the effect on the financial statements of significant estimates involving contingencies will change within one year of the date of the financial statements due to one or more future confirming events. If such changes occur, they could be material to the financial statements. The Company has disclosed all significant estimates and assumptions that could potentially be affected by future confirming events.
Independent Contractors Misclassification Class Action
In August 2016, a truck driver who contracted with Tribeca Automotive, Inc. filed a Complaint in Essex County Superior Court of New Jersey, bringing claims on behalf of himself and those similarly situated against Tribeca and its owners. An amended class complaint was filed in April 2022. The putative class alleges Tribeca misclassified contracted truck drivers as independent contractors, rather than “employees” under applicable law. As a result, the class seeks overtime and unlawful deductions in violation of New Jersey Wage and Hour Law and New Jersey Wage Payment Law. Tribeca denies liability and the parties are engaged in mediation. We are entitled to the stated indemnity in the Purchase Agreement from the sellers of Tribeca relating to this potential liability.
Former Employee Class Action
In May 2024, a former employee
filed a class action lawsuit against Deluxe Auto Carriers, Inc., in Riverside County Superior Court in California. The lawsuit alleges
class claims against Deluxe for unpaid minimum and overtime wages, non-compliant meal and rest periods, unreimbursed business expenses,
and inaccurate wage statements, among other claims. A class settlement was reached for $
Civil Complaint
In November 2025, a second
amended civil complaint was filed in federal court in South Carolina against the Company, its subsidiaries Tribeca Automotive, Inc. (“Tribeca”)
and Proficient Services, Inc. (f/k/a PAL Stock Acquiror, Inc.) and an individual working on behalf of Tribeca arising out of a vehicular
accident involving one of Tribeca’s vehicles. In March 2026, the Company agreed in principle to settle the case to
avoid the cost, risk and distraction of continued litigation. On May 8, 2026, the settlement was finalized for $
21
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Special Note Regarding Forward-Looking Statements
The following discussion and analysis should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes and our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”).
Unless otherwise indicated, the terms the “Company,” “we,” “us” and “our” refer to Proficient Auto Logistics, Inc. and its subsidiaries as a whole, after giving effect to the Combinations (as defined below) and recent acquisitions.
This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to possible or assume future results of our business, financial condition, results of operations, liquidity, plans and objectives. You can generally identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions that concern our expectations, strategy, plans or intentions. We have based these forward-looking statements largely on our current expectations and projections regarding future events and trends that we believe may affect our business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” in this Quarterly Report and the Annual Report, and elsewhere in this Quarterly Report and the Annual Report. Accordingly, you should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding:
| ● | the economic conditions in the global markets in which we operate; |
| ● | our ability to successfully implement our business strategy, effectively respond to changes in market dynamics and customer preferences, and achieve the anticipated benefits and associated cost savings of such strategies and actions; |
| ● | our ability to recruit and retain qualified drivers, independent contractors and third-party auto transportation and logistics companies; |
| ● | our expectations regarding the successful implementation of the Combinations and other acquisitions; |
| ● | geopolitical developments and additional changes in international trade policies and relations; |
| ● | the effect of any international conflicts or terrorist activities, including the current conflict in the Middle East, and the conflict between Russia and Ukraine, on the United States and global economies in general, the transportation industry, or us in particular, and what effects these events will have on our costs and the demand for our services; |
| ● | our ability to manage our network capacity and cost structure for capital expenditures and operating expenses, and match it to shifting and future customer volume levels; |
| ● | our ability to compete effectively against current and future competitors; |
| ● | our dependence on the automotive industry, which is directly affected by such external factors as general economic conditions in the United States, Canada and Mexico, trade policies, including tariffs, unemployment rates, fuel price volatility, labor shortages or strikes, consumer confidence, government policies, continuing activities of war, terrorist activities and the availability of affordable new car financing; |
22
| ● | our ability to maintain our profitability despite quarterly fluctuations in our results, whether due to seasonality, large cyclical events, or other causes; and our future financial and operating results; |
| ● | our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act; and |
| ● | the sufficiency of our existing cash to fund our future operating expenses and capital expenditure requirements. |
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report. In addition, in light of certain risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report may not occur. The forward-looking statements made in this document relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Business Overview
We are a leading specialized freight company focused on providing auto transportation and logistics services. Formed in connection with the IPO through the combination of five industry-leading operating companies, we operate one of the largest auto transportation fleets in North America with an operating fleet with approximately 800 owned assets and employing 698 dedicated employees as of March 31, 2026. From our 57 strategically located facilities across the United States, we offer a broad range of auto transportation and logistics services, primarily focused on transporting finished vehicles from automotive production facilities, marine ports of entry or regional rail yards to auto dealerships around the country. We have developed a differentiated business model due to our scale, breadth of geographic coverage and embedded customer relationships with leading auto original equipment manufacturing companies (“OEMs”). Our customers include nearly all of the global auto manufacturing companies who participate in the North American market. Additional customers include auto dealers, auto auctions, rental car companies and auto leasing companies.
Description of the Combinations
On December 21, 2023, Proficient Auto Logistics, Inc. entered into agreements to acquire in multiple, separate acquisitions, five operating businesses and their respective affiliated entities, as applicable: (i) Delta, (ii) Deluxe, (iii) Sierra, (iv) Proficient Transport, and(v) Tribeca (collectively, the “Founding Companies”). On May 13, 2024, the Company completed the IPO of its common stock, and in connection with the closing of the IPO, the Company also completed the acquisitions of all of the Founding Companies (the “Combinations”). Thereafter, on August 16, 2024, the Company acquired Auto Transport Group, LC, (“ATG,” which was converted to a limited liability company after closing), and on November 1, 2024, the Company acquired Utah Truck & Trailer Repair, LLC, (“UTT,” which subsequently converted into Proficient Repair Services LLC),a repair facility located at the ATG headquarters terminal in Ogden, Utah. On April 1, 2025, the Company acquired Brothers Auto Transport, LLC, (“Brothers”), located in Wind Gap, Pennsylvania and on May 27, 2025, the Company acquired PVT Truck &Trailer Repair, LLC, (“PVT”) a repair facility located at the Brothers headquarters. These acquisitions expanded the Company’s geographic presence and services offered. The Combinations and subsequent acquisitions are accounted for as business combinations under ASC 805. Under this method of accounting, Proficient Auto Logistics, Inc. is treated as the “accounting acquirer”.
23
Financial Statement Components
Revenue
We generate revenue by transporting autos for our customers in OEM contract and spot arrangements, secondary market auto moves, and contract services arrangements. Our OEM contract and spot arrangements provide auto transportation and logistics services through movements of autos over routes across the United States. Secondary market auto moves are for customers other than OEMs. Our contract services offering uses Company-owned equipment to service specific customers and provides services through long-term contracts. Our business provides services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide transportation and logistics of automobiles.
We are typically paid a predetermined rate per unit for our services. Consistent with industry practice, our typical customer contracts do not guarantee load levels or tractor availability. This gives us and our customers a certain degree of flexibility in response to changes in auto demand and truck capacity.
Generally, we receive fuel surcharges on the miles moved for which we are compensated by customers. Fuel surcharges revenue mitigates the effect of price increases over a negotiated base rate per gallon of fuel; however, these revenues may not fully protect us from all fuel price volatility, particularly in times of rapid fuel price increases, due to the lag of the increased price being reflected in fuel surcharges recovery.
Operating Expenses
Our most significant operating expenses vary with miles traveled and include (i) fuel and fuel taxes, (ii) driver related expenses, such as salaries, wages, benefits, training and recruitment, (iii) the cost of purchased transportation that we pay independent contractors and to third-party carriers and (iv) maintenance of our fleet. Expenses that have both fixed and variable components include maintenance and truck expenses and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs include depreciation of long-term assets, such as revenue equipment and leasing costs for our service center facilities, the compensation of non-driver personnel and other general and administrative expenses.
We monitor key operating metrics including the volume of units delivered, average revenue per unit and adjusted operating ratio, as applicable to the portions of our business that contract on each of these bases.
Critical Accounting Policies and Estimates
In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of our financial statements in conformity with GAAP. Actual results could differ significantly from those estimates under different conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. See Note 2 of the accompanying consolidated financial statements of the Company for additional information about our critical accounting policies and estimates.
Property and equipment
Property and equipment are carried at cost. Depreciation of property and equipment is computed using the straight-line method for financial reporting purposes and accelerated methods for tax purposes over the estimated useful lives of the related assets (net of estimated salvage value or trade-in value). We generally use estimated useful lives of five to ten years for trucks and trailers, classified as transportation equipment. The depreciable lives of our revenue equipment represent the estimated usage period of the equipment, which may be more or less than the economic lives.
24
Periodically, we evaluate the useful lives and salvage values of our revenue equipment and other long-lived assets based upon, but not limited to, our experience with similar assets including gains or losses upon dispositions of such assets, conditions in the used equipment market and prevailing industry practices. Changes in useful lives or salvage value estimates, or fluctuations in market values that are not reflected in our estimates, could have a material impact on our financial results. We review our property and equipment whenever events or circumstances indicate the carrying amount of the asset may not be recoverable. An impairment loss equal to the excess of carrying amount over fair value would be recognized if the carrying amount of the asset is not recoverable.
Business Combinations — We account for business combinations using the acquisition method pursuant to ASC 805, Business Combinations. For each acquisition, we recognize the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. Valuations of certain assets acquired, including customer relationships, developed technology and trade names involve significant judgment and estimation. We use independent valuation specialists to help determine fair value of certain assets and liabilities. Valuations utilize significant estimates, such as forecasted revenues and profits. Changes in these estimates could significantly impact the value of certain assets and liabilities. ASC 805 establishes a measurement period to provide us with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date. Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed as of the acquisition date. We complete the final fair value determination of the assets acquired and liabilities assumed for each acquired business as soon as practicable within the measurement period, but not to exceed one year from the acquisition date.
Goodwill — Goodwill is recorded when the purchase price paid in a business combination exceeds the fair value of assets acquired and liabilities assumed. Goodwill is reviewed for impairment on an annual basis, or upon an occurrence of an event or changes in circumstances that indicate that the carrying value may not be recoverable. In the absence of any indications of potential impairment, the evaluation of goodwill is performed during the fourth quarter of each year.
Goodwill impairment is the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. When testing goodwill for impairment, we may first perform a qualitative assessment to determine whether the fair value of a reporting unit is less than its carrying amount. We then complete a quantitative impairment test if the qualitative assessment indicates that it is more likely than not that the reporting unit’s fair value is less than the carrying value of its assets. If the estimated fair value of the reporting unit exceeds the carrying value, goodwill is not considered impaired, and no additional steps are needed. If, however, the fair value of the reporting unit is less than its carrying value, then the amount of the impairment loss is the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
Income taxes — Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.
We evaluate the need for a valuation allowance on deferred tax assets based on whether we believe that it is more likely than not all deferred tax assets will be realized. A consideration of future taxable income is made as well as on-going prudent feasible tax planning strategies in assessing the need for valuation allowances. In the event it is determined all or part of a deferred tax asset would not be able to be realized, management would record an adjustment to the deferred tax asset and recognize a charge against income at that time.
Our estimates of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts and circumstances existing at that time. We account for uncertain tax positions in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, and record a liability when such uncertainties meet the more likely than not recognition threshold. Potential accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.
25
Reportable Segments
Our business is organized into two operating segments, Company Drivers and Subhaulers, which represent the Company’s reportable segments. The Company Drivers segment offers automobile transport and contract services under an asset-based model. The Company’s contract service offering uses Company-owned equipment to service specific customers and provides transportation services through long-term contracts. The Company’s Subhaulers segment offers transportation services utilizing an asset-light model focusing on outsourcing transportation of loads to third-party carriers.
Company Drivers Segment
In our Company Drivers segment, we generate revenue by transporting autos for our customers in OEM contract and spot arrangements, secondary market auto moves, and contract services arrangements. Our OEM contract and spot arrangements provide auto transportation and logistics services through movements of autos over routes across the United States. Secondary market auto moves are for customers other than OEMs. Our contract services offering uses Company-owned equipment to service specific customers and provides services through long-term contracts. Our Company Drivers segment provides services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide Company Drivers carrier services of automobiles. The main factors that affect operating revenue in the Company Drivers Segment are the average revenue per unit received from customers and the number of vehicles transported.
We are typically paid a predetermined rate per unit for our Company Drivers services. Our executed contracts generally contain fixed terms and rates and are often used by our customers with high-service and high-priority freight. We strive to increase our revenues derived from contracts by delivering a high-quality service and continuing to build upon our relationships and reputation with OEMs.
Our contracts with customers generally include a fuel surcharge to account for fluctuating fuel prices. Built into the predetermined contract rates with each customer is a baseline fuel price and when fuel prices rise above this baseline price, our customers compensate us for the variance in the form of additional revenue. If fuel prices drop below the baseline price, we may in turn owe our customers this variance and record a discount. This additional revenue/discount is represented on the Fuel Surcharge and Other Reimbursements line in the consolidated financial statements.
In our Company Drivers segment, our most significant operating expenses vary with miles traveled and include (i) fuel, and (ii) driver-related expenses, such as wages, benefits, training and recruitment. Expenses that have both fixed and variable components include maintenance and truck expenses and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs include depreciation of long-term assets, such as trucks and trailers (to which we refer as revenue equipment) and service center facilities, the compensation of non-driver personnel and other general and administrative expenses.
Our Company Drivers segment requires capital expenditures for the purchase of new revenue equipment. We use a combination of financing leases and secured long-term debt to acquire revenue equipment. When we finance revenue equipment acquisitions with either finance leases or long-term debt, the asset and liability are recorded on our consolidated balance sheet, and we record expense under “Depreciation” and “Interest expense”. We expect our depreciation and interest expense to increase by changes in the quality and value of our revenue equipment acquired in any given year.
The primary performance indicator in our Company Drivers segment is operating margin (Company Drivers operating revenue, less Company Drivers operating expenses, as a percentage of Company Drivers operating revenue). Operating margin can be impacted by the rates charged to customers, Company Drivers pay, fuel, trucking and maintenance expense.
Subhaulers Segment
In our Subhaulers segment, we generate revenue by independent owner operators (who run under our DOT authority) and independent third-party carriers, which assist in transporting autos for customers in our OEM contract and spot arrangements, and secondary market auto moves. We maintain the customer relationship, including billing and collection, but outsource the transportation of the loads. The main factors that affect operating revenue in our Subhaulers segment are our customers’ excess inventory needs, the rates we obtain from customers, the auto volumes we ship through the Subhaulers segment and our ability to secure capacity using independent contractors and carriers.
The most significant expense of our Subhaulers segment, which is primarily variable, is the cost of purchased transportation that we pay to independent contractors and third-party carriers and is included in the “Purchased transportation” line item. This expense generally varies directly with the amount of Subhauler revenue, rates paid to independent contractors and third party carriers, and current demand and customer shipping needs. Other operating expenses are generally fixed and primarily include the compensation and benefits of non-driver personnel supporting this segment (which are recorded in the “Salaries, wages and benefits” line item).
The primary performance indicator in our Subhaulers segment is operating margin (Subhauler operating revenue, less Subhauler operating expenses, as a percentage of Subhauler operating revenue). Operating margin can be impacted by the rates charged to customers and the rates paid to third-party carriers.
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Non-GAAP Financial Measures
We report our financial results in accordance with GAAP. However, management believes that EBITDA and Operating Ratio provide useful information in measuring our operating performance, generating future operating plans and making strategic decisions regarding allocation of capital. Management believes this information presents helpful comparisons of financial performance between periods by excluding the effect of certain non-recurring items.
EBITDA and Operating Ratio do not have a standardized meaning prescribed by GAAP and therefore they may not be comparable to similarly titled measures presented by other companies, and it should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
EBITDA is defined as net income (loss) for the period adjusted for interest expense, income tax benefit and depreciation expense and intangible amortization expense.
Adjusted EBITDA represents net income (loss) plus interest expense, income tax benefit, depreciation expense, intangible amortization expense, and share-based compensation expenses and any non-recurring items that management does not consider indicative of ongoing operating performance.
The following table provides a reconciliation of net income, the most closely comparable GAAP financial measure, to EBITDA and Adjusted EBITDA:
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Total operating revenue | $ | 93,689,669 | $ | 95,206,021 | ||||
| Net loss | (6,490,101 | ) | (3,191,685 | ) | ||||
| Add Back: | ||||||||
| Interest expense | 1,397,021 | 1,570,920 | ||||||
| Income tax benefit | (1,807,647 | ) | (702,621 | ) | ||||
| Depreciation | 7,607,007 | 6,488,579 | ||||||
| Intangible amortization | 2,414,753 | 2,415,830 | ||||||
| EBITDA | $ | 3,121,033 | $ | 6,581,023 | ||||
| EBITDA Margin | 3.3 | % | 6.9 | % | ||||
| Add Back: | ||||||||
| Stock-based compensation | 1,352,082 | 1,183,009 | ||||||
| Adjusted EBITDA | $ | 4,473,115 | $ | 7,764,032 | ||||
| Adjusted EBITDA Margin | 4.8 | % | 8.2 | % | ||||
Operating ratio is calculated as total operating expenses as a percentage of operating revenue.
Adjusted operating ratio is calculated as total operating expenses reduced for share-based compensation expense and amortization of intangibles as a percentage of operating revenue.
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The following table provides a reconciliation of total operating revenue and operating (loss) income, to operating margin and adjusted operating margin:
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Total operating revenue | $ | 93,689,669 | $ | 95,206,021 | ||||
| Total operating expenses | 100,624,223 | 97,568,527 | ||||||
| Operating (loss) income | (6,934,554 | ) | (2,362,506 | ) | ||||
| Operating Ratio | 107.4 | % | 102.5 | % | ||||
| Add Back: | ||||||||
| Stock-based compensation | 1,352,082 | 1,183,009 | ||||||
| Intangible amortization | 2,414,753 | 2,415,830 | ||||||
| Adjusted Total Operating Expenses | $ | 96,857,388 | $ | 93,969,688 | ||||
| Adjusted Operating Ratio | 103.4 | % | 98.7 | % | ||||
Results of Operations for the three months ended March 31, 2026 and 2025
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Operating Revenue | ||||||||
| Revenue, before fuel surcharge | $ | 86,196,954 | $ | 87,615,128 | ||||
| Fuel surcharge and other reimbursements | 5,664,451 | 5,427,840 | ||||||
| Other Revenue | 1,104,200 | 1,305,745 | ||||||
| Lease Revenue | 724,064 | 857,308 | ||||||
| Total Operating Revenue | 93,689,669 | 95,206,021 | ||||||
| Operating Expenses | ||||||||
| Salaries, wages and benefits | 20,892,844 | 19,288,103 | ||||||
| Stock-based compensation | 1,352,082 | 1,183,009 | ||||||
| Fuel and fuel taxes | 6,875,998 | 6,065,255 | ||||||
| Purchased transportation | 44,614,009 | 47,208,843 | ||||||
| Truck expenses | 7,230,793 | 5,849,846 | ||||||
| Depreciation | 7,607,007 | 6,488,579 | ||||||
| Intangible amortization | 2,414,753 | 2,415,830 | ||||||
| (Gain) Loss on sale of equipment | (10,263 | ) | 8,781 | |||||
| Insurance premiums and claims | 5,287,345 | 4,958,679 | ||||||
| General, selling, and other operating expenses | 4,359,655 | 4,101,602 | ||||||
| Total Operating Expenses | 100,624,223 | 97,568,527 | ||||||
| Operating Loss | (6,934,554 | ) | (2,362,506 | ) | ||||
| Other income and expense | ||||||||
| Interest expense | (1,397,021 | ) | (1,570,920 | ) | ||||
| Acquisition Costs | - | (37,102 | ) | |||||
| Other income, net | 33,827 | 76,222 | ||||||
| Total other expense, net | (1,363,194 | ) | (1,531,800 | ) | ||||
| Loss before income taxes | (8,297,748 | ) | (3,894,306 | ) | ||||
| Income tax benefit | (1,807,647 | ) | (702,621 | ) | ||||
| Net Loss | $ | (6,490,101 | ) | $ | (3,191,685 | ) | ||
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Operating Revenue - The Company generates revenue from two primary sources: transporting freight for customers, including related fuel surcharge revenue and other reimbursements (Company Drivers), and arranging for the transportation of customer freight by independent contractors and third-party carriers (Subhaulers). Company Drivers revenue, before fuel surcharges and other reimbursements, is primarily generated through trucking services provided by the Company’s Company Drivers service offerings to OEMs and the secondary market. Subhaulers revenue before fuel surcharges and other reimbursements is primarily generated through brokering freight to third-party carriers. Fuel surcharges and other reimbursements represent additional revenue the Company earns based on mileage driven and other reimbursable costs incurred for which it is compensated by its customers.
The Company’s total operating revenue is affected by, among other things, the general level of economic activity in the United States, customer inventory levels, specific customer demand, the level of capacity in the truckload and brokerage industry, the success of its marketing and sales efforts and the availability of drivers and third-party carriers.
The Company disaggregates revenue from contracts with its customers for Company Drivers and Subhaulers operations between (1) revenue, before fuel surcharges and reimbursements and (2) fuel surcharges and reimbursements. A summary of the Company’s revenue generated by type for the periods indicated is as follows:
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Operating Revenue: | ||||||||
| Company Drivers | $ | 34,083,698 | $ | 30,476,339 | ||||
| Company Drivers fuel surcharge and other reimbursements | 1,990,020 | 1,349,583 | ||||||
| Other Revenue | 181,193 | 848,496 | ||||||
| Total Company Drivers revenue | 36,254,911 | 32,674,418 | ||||||
| Subhaulers | 52,113,256 | 57,138,789 | ||||||
| Subhaulers fuel surcharge and other reimbursements | 3,674,431 | 4,078,257 | ||||||
| Other Revenue | 923,007 | 457,249 | ||||||
| Lease Revenue | 724,064 | 857,308 | ||||||
| Total Subhaulers revenue | 57,434,758 | 62,531,603 | ||||||
| Total operating revenue | $ | 93,689,669 | $ | 95,206,021 | ||||
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During the first quarter of 2026, extended plant shutdowns, weak seasonally adjusted annual rate of automotive sales (“SAAR”), and severe winter weather impacted both new vehicle shipments and dealership operations, particularly in January and February. While volume was up modestly year-over-year, the Brothers acquisition was not included in the 2025 comparable period, and absent the Brothers volume, the core portfolio (and underlying automotive market) was down year-over-year.
In the Company Drivers segment, operating revenues increased by $3.6 million, or 11.0%, to $36.3 million in the first quarter of 2026 compared to $32.7 million in 2025. In the Subhaulers segment, operating revenues decreased by $5.1 million, or 8.2%, to $57.4 million in 2026 compared to $62.5 million in 2025. The change between Company Drivers and Subhauler revenues was driven by the Company utilizing more Company drivers to perform hauls compared to third party carriers during the quarter.
Salaries, wages and benefits — Salaries, wages, and benefits consist primarily of compensation for all employees. Salaries, wages, and benefits are primarily affected by the amount paid to company drivers, which is a function of the amount of freight hauled and units delivered. Salaries, wages and benefits are also affected by employee benefits such as health care and workers’ compensation, and to a lesser extent by the number of, and compensation and benefits paid to, non-driver employees.
Salaries, wages and benefits increased by $1.6 million, or 8.3%, to $20.9 million in the three months ended March 31, 2026 compared to $19.3 million in 2025. The increase in salaries, wages and benefits was largely driven by the acquisition of Brothers on April 1, 2025.
Stock-based compensation— Stock-based compensation consists primarily of compensation for certain employees, officers, and directors as a key component of our overall compensation strategy.
Stock-based compensation increased $169,000, or 14.3%, to $1.4 million in the three months ended March 31, 2026 compared to $1.2 million in 2025. The increase in stock-based compensation was driven by new grants awarded during the three months ended March 31, 2026.
Fuel and fuel taxes — Fuel and fuel taxes consist primarily of diesel fuel expense and fuel taxes for the Company’s company-owned equipment. The primary factors affecting the Company’s fuel and fuel taxes expense are the cost of fuel per mile and the number of miles driven by company drivers.
Fuel and fuel taxes increased by $810,000, or 13.1%, to $6.9 million in the three months ended March 31, 2026 compared to $6.1 million in 2025. The increase in fuel and fuel taxes was primarily driven by higher fuel prices.
Purchased transportation — Purchased transportation consists of the payments the Company makes to owner-operators and third-party carriers.
Purchased transportation decreased by $2.6 million, or 5.5%, to $44.6 million in the three months ended March 31, 2026 compared to $47.2 million in 2025. The decrease in purchased transportation was driven by a decrease in Subhauler revenue, partially offset by a higher rate of purchased transportation.
Truck Expenses — Truck expenses consist of operating expenses and supplies incurred for ordinary vehicle repairs and maintenance costs, driver on-the-road expenses and tolls.
Truck expenses and supplies are primarily affected by the age of the Company’s company-owned and leased fleet of trucks and trailers, the number of miles driven in a period and driver turnover. Truck expenses increased $1.4 million, or 24.1%, to $7.2 million in the three months ended March 31, 2026 compared to $5.8 million in 2025. The primary increase in truck expenses is due to cold-weather-related equipment maintenance and repairs.
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Depreciation and amortization — Depreciation and amortization consist primarily of depreciation for owned trucks and trailers and to a lesser extent computer software amortization. The primary factors affecting these expense items include the size and age of the Company’s truck and trailer fleets, the cost of new equipment and the relative percentage of owned revenue equipment and equipment acquired through debt or finance leases.
Depreciation and amortization and the loss (gain) on sale of equipment increased by $1.1 million, or 16.9%, to $7.6 million in the three months ended March 31, 2026 compared to $6.5 million in 2025. The increase in depreciation and amortization was largely driven by the acquisition on April 1, 2025.
Intangible Amortization — Intangible amortization is the amortization of our intangible assets, including customer relationships and trade names, recognized during each acquisition, as applicable.
Intangible amortization remained consistent at $2.4 million in the three months ended March 31, 2026 and 2025.
Insurance premiums and claims — Insurance premiums and claims consist primarily of retained amounts for liability (personal injury and property damage), physical damage and cargo damage, as well as insurance premiums. The primary factors affecting the Company’s insurance premiums and claims are the frequency and severity of accidents, trends in the development factors used in the Company’s accruals and developments in large, prior year claims. The number of accidents tends to increase with the miles we travel and severe weather conditions. With our significant retained amounts, insurance claims expense may fluctuate significantly and impact the cost of insurance premiums and claims from period-to-period, and any increase in frequency or severity of claims or adverse loss development of prior period claims would adversely affect the Company financial condition and results of operations.
Insurance premiums and claims increased by $0.3 million, or 6.0%, to $5.3 million in the three months ended March 31, 2026 compared to $5.0 million in 2025.
General, selling, and other operating expenses — General, selling, and other operating expenses consist primarily of legal and professional services fees, occupancy and other costs. General, selling, and other operating expenses increased by $0.3 million, or 7.3%, to $4.4 million in the three months ended March 31, 2026 compared to $4.1 million in 2025. The increase in general, selling, and other operating expenses was primarily due to the acquisition of Brothers on April 1, 2025.
Interest expense, net — Interest expense, net consists of cash interest, amortization of deferred financing fees, net of any interest income received from financial institutions. Interest expense, net decreased by $0.2 million, or 12.5%, to $1.4 million in the three months ended March 31, 2026 compared to $1.6 million in 2025. The decrease was primarily due to the paydown of the line of credit in September of 2025 and payoff of equipment loans over the past twelve months.
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Operating ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue. The Company’s operating ratio increased by 4.9% to 107.4% in 2026 as compared to 102.5% in 2025. The increase in operating ratio is due to lower revenues during the quarter along with increased fuel cost and truck expenses. We are working to achieve synergies across all operating companies, which should help reduce the operating ratio over time. See “Non-GAAP Financial Measures” section for the Company’s calculation of operating ratio.
Adjusted Operating ratio — Adjusted operating ratio is calculated as total adjusted operating expenses (operating expenses less stock-based compensation and intangible amortization) as a percentage of operating revenue. The Company’s adjusted operating ratio increased by 4.7% to 103.4% in 2026 as compared to 98.7% in 2025. The increase in adjusted operating ratio is due to lower revenues during the quarter along with increased fuel cost and truck expenses. We are working to achieve synergies across all operating companies, which should help reduce the adjusted operating ratio over time. See “Non-GAAP Financial Measures” section for the Company’s calculation of adjusted operating ratio.
EBITDA — EBITDA decreased by $3.5 million, or 53%, to $3.1 million in 2026 compared to $6.6 million in 2025. The decrease was due to lower revenues during the quarter along with increased fuel cost and truck expenses. See “Non-GAAP Financial Measure” section for the Company’s calculation of EBITDA.
Adjusted EBITDA — Adjusted EBITDA represents net income (loss) plus interest expense, net, income tax benefit, depreciation expense, intangible amortization expense, share-based compensation expenses and any non-recurring items that management does not consider indicative of ongoing operating performance. Adjusted EBITDA decreased by $3.3 million, or 42%, to $4.5 million in 2026 compared to $7.8 million in 2025. The decrease was due to lower revenues during the quarter along with increased fuel cost and truck expenses. See “Non-GAAP Financial Measures” section for the Company’s calculation of Adjusted EBITDA.
Liquidity and Capital Resources
Overview
Our business requires substantial amounts of cash to cover operating expenses as well as to fund capital expenditures, working capital changes, principal and interest payments on our debt obligations, lease payments and tax payments when we generate taxable income. Recently, we have financed our capital requirements with cash flows from operating activities, direct equipment financing, and proceeds from our IPO. We intend to spend between $10 to $15 million per year on new revenue equipment to maintain our desired average age of the fleet. We plan to finance the purchases through a combination of operating cash flows and direct equipment financing. Additional purchases of revenue equipment in a given year will depend on new business added as well as management’s desire to shift the mix of delivery to have higher volume in the Company Drivers segment, which will require growth in the aggregate fleet.
We believe we can fund our expected cash needs in the short-term, including debt repayment and the capital purchases described above, with projected cash flows from operating activities, borrowings under our credit facility and direct debt and lease financing that we believe to be available for at least the next 12 months. Over the long-term, we expect that we will continue to have significant capital requirements, which may require us to seek additional borrowings or lease financing. The availability of financing will depend upon our financial condition and results of operations as well as prevailing market conditions.
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Sources of liquidity
In May 2024, we raised money in the capital markets through an IPO and then subsequently in June 2024 sold additional shares through an over-allotment option. The approximately $30 million remaining after acquiring the Founding Companies was used to support operations for 2024 and to partially fund strategic acquisitions. We anticipate that our cash flows from operations and available direct equipment financing will provide adequate liquidity for our planned capital expenditures during fiscal year 2026. For any new capital expenditures in 2026 and beyond that exceed our cash flow from operations, we have negotiated credit agreements with financial institutions in amounts sufficient to fund planned purchases. While we generally control the timing and extent of our capital expenditures, there is no assurance that we can obtain financing arrangements on terms acceptable to the Company.
Pinnacle LOC
On November 8, 2024, the Company and certain of its subsidiaries, as borrowers, entered into a Loan and Security Agreement (the “Loan Agreement”) with Pinnacle Bank, as lender (the “Lender”). The Loan Agreement provides for (i) a delayed draw term loan facility of up to an aggregate principal amount of $25 million (the “Term Loan Facility”) and (ii) a revolving credit facility of up to an aggregate principal amount of $20 million at any time outstanding (the “Revolving Credit Facility”), in each case, subject to the terms of the Loan Agreement. Proceeds of the Term Loan Facility may be used to refinance existing indebtedness of the Company, to finance certain permitted acquisitions and fees and expenses related thereto, and to pay fees and transaction expenses associated with the Loan Agreement. Proceeds of the Revolving Credit Facility may be used for general working capital, to pay the fees and transaction expenses associated with the Loan Agreement, and to pay any of the Company’s obligations thereunder. The loans under the Loan Agreement may be voluntarily prepaid at any time, in whole or in part, without premium or penalty. The maturity date of the Term Loan Facility is April 2031, and the maturity date of the Revolving Credit Facility is November 8, 2029.
Borrowings under the Loan Agreement bear interest at a rate per annum equal to Term SOFR for an interest period equal to one month plus a margin of (x) 2.50% per annum with respect to any loan under the Term Loan Facility and (y) 2.20% per annum with respect to any loan under the Revolving Credit Facility. In addition, the Company is required to pay an unused line fee on the unutilized commitments with respect to the Revolving Credit Facility at the rate of 0.15% per annum.
The Loan Agreement contains customary affirmative and negative covenants, including covenants that restrict the ability of the Company and its subsidiaries to, among other things, incur debt, grant liens on their respective assets, engage in mergers and other fundamental changes, make investments, enter into transactions with affiliates, pay dividends and make other restricted payments, prepay other indebtedness and sell assets, in each case subject to certain exceptions set forth in the Loan Agreement. The Loan Agreement also requires the Company to maintain (i) a Fixed Charge Coverage Ratio (as defined in the Loan Agreement) of greater than or equal to 1.25 to 1.00 and (ii) a Funded Debt to Adjusted EBITDA Ratio (as defined in the Loan Agreement) of less than or equal to 3.00 to 1.00, in each case, as of the end of each fiscal quarter. The Company was in compliance with its debt covenants as of March 31, 2026.
All obligations under the Loan Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest on substantially all of the property of the Company and its subsidiaries.
Upon closing, the Company drew $16.0 million from the available term debt, a portion of which was used to repay and terminate the Proficient Transport line of credit. On April 1, 2025, the Company drew $9.0 million to fund the cash portion of the Brothers Auto Transport, LLC acquisition. On March 31, 2026, the amount outstanding on the term debt facility was approximately $20.8 million and there was no drawn balance on the line of credit.
Cash Flows
For the three months ended March 31, 2026, cash flows from operating activities was $2.0 million, a $350,000 increase compared to the three months ended March 31, 2025. We had a decrease in adjusted operating income of $2.9 million to $3.8 million in the three months ended March 31, 2026 compared to $6.7 million in the prior period, after accounting for non-cash adjustments, which was offset by a decrease in working capital of $3.2 million when comparing period over period.
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For the three months ended March 31, 2026, cash flows used in investing activities was $718,000. This decrease of $1.7 million compared to March 31, 2025 is mainly due to fewer new equipment purchases.
For the three months ended March 31, 2026, cash flows used in financing activities was $5.8 million, which was an increase of $2.1 million compared to the three months ended March 31, 2025. This increase was a result of no new borrowings on our line of credit in addition to repurchasing common stock from shareholders.
Emerging Growth Company Status
We qualify as an “emerging growth company,” as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include: (i) reduced disclosure about our executive compensation arrangements; (ii) not being required to hold advisory votes on executive compensation or to obtain stockholder approval of any golden parachute arrangements not previously approved; (iii) an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and (iv) an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on the financial statements.
We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of the IPO; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this Quarterly Report. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock. Additionally, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, therefore, while we are an emerging growth company, we will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies. As a result of this election, our financial statements may not be comparable to those of other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk
Changes in interest rates affect the amount of interest due on our variable rate debt. As of March 31, 2026, we had variable rate borrowings on the Term Debt of $20.8 million and no advances under our Revolving Line of Credit. We currently use Term SOFR as a reference rate for our variable rate debt, and any future increases in Term SOFR will inherently result in an increase in interest expense and cash paid toward interest. We performed a sensitivity analysis to determine the effect of interest rate fluctuations on our interest expense. A hypothetical 1 percentage point increase in Term SOFR would result in an increase to interest expense of $187,000 over 12 months based on amounts outstanding and interest rates in effect as of April 1, 2026.
Inflation and Fuel Cost
Most of the Company’s operating expenses are inflation-sensitive, with inflation generally producing increased costs of operations. Historically, the Company has limited the effects of inflation on its business through increases in freight rates and certain cost controls. The most relevant items impacted by inflation are the cost to insure and maintain the fleet. Significant inflation has been experienced in insurance and claims costs related to health insurance and claims as well as auto liability insurance and claims. Significant price increases in revenue equipment have impacted the cost for the Company to acquire new equipment. The cost increases have also impacted the cost of parts for equipment repairs and maintenance, inclusive of tires. Over the long term, general economic growth and industry supply and demand conditions have allowed increases in rates charged to customers, although these rate increases have significantly lagged the increases in tractor prices and related depreciation expense.
In addition to inflation, significant fluctuations in fuel prices can adversely affect the Company’s operating results and profitability. The Company has attempted to limit the effects of increases in fuel prices through certain cost control efforts and its fuel surcharge program. The Company receives fuel surcharge revenues on all Company Drivers moves. Although the Company historically has been able to recover most long-term increases in fuel prices and operating taxes to customers in the form of surcharges and higher rates, these arrangements generally do not fully protect the Company from short-term fuel price increases or continued rising price environments like the Company experienced throughout 2023 and 2024, and as has recently occurred with Middle East conflict. These arrangements may also prevent the Company from receiving the full benefit of any fuel price decreases. Additionally, the Company generally does not receive fuel surcharge on empty miles.
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Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on this evaluation of our disclosure controls and procedures as of March 31, 2026, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective.
Notwithstanding the material weakness in our internal control over financial reporting, our Chief Executive Officer and Chief Financial Officer have concluded that our condensed consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows in accordance with GAAP.
In connection with the preparation of the Company’s audited financial statements for the year ended December 31, 2025, a material weakness in the Company’s internal controls over financial reporting was identified and, if our remediation is not effective, or if we fail to maintain an effective system of internal controls over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence and profitability.
We have identified a material weakness in the Company’s internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified was related to IT general controls in Company’s financial systems and closing processes in the period after our IPO and prior to full integration of systems, including account reconciliations and review surrounding the close process.
Remediation steps have been taken to improve the Company’s internal controls over financial reporting to address the underlying causes, including: completion of systems integration to a common enterprise transportation management and accounting platform, designing and implementing increased controls, increasing oversight and review of technical systems and engaging third-parties to support control design and testing. As of December 31, 2025, all operating companies have been converted to one accounting technology platform, with the repair facilities scheduled for mid-2026. Having all companies operating under one accounting technology platform has allowed the Company to implement improved internal controls related to financial reporting and has given us more oversight over the financial information being generated. We have hired an independent consulting firm to assist with redesigning our internal controls over financial reporting and information technology and anticipate being completed with all remaining remediation steps in 2026.
While we believe that our efforts have improved the Company’s internal controls over financial reporting, the implementation and oversight of control measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. If, however, we are unable to successfully remediate the existing or any future material weakness, the accuracy of our financial reporting may be adversely affected, which could cause investors to lose confidence in our financial reporting and our share price and profitability may decline as a result.
Changes in Internal Control Over Financial Reporting
Except for the enhancements to controls to address the material weakness discussed above, there were no changes to our internal control over financial reporting during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
The Company is involved from time to time in various legal proceedings and governmental and regulatory proceedings that arise in the ordinary course of business. The Company does not believe that such litigation, claims, and administrative proceedings will have a material adverse impact on the Company’s financial position or results of operations.
Item 1A. Risk Factors
Our business is subject to various risks and uncertainties. You should review and consider carefully the risks and uncertainties described in more detail in Item 1A of Part I of our Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities
We did not sell any unregistered equity securities during the three-month period ended March 31, 2026.
On March 2, 2026, the Board of Directors authorized a share repurchase program under which we may repurchase up to $15 million of its common stock. The repurchase program authorizes the purchase of our common stock from time to time in the open market, in block transactions, in privately negotiated transactions, through accelerated stock repurchase programs, through option or other forward transactions or otherwise, all in compliance with applicable laws, rules, regulations and other restrictions.
The following table sets forth our stock repurchases during the three-month period ended March 31, 2026.
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
| January 1 – January 31, 2026 | — | — | — | — | ||||||||||||
| February 1 – February 28, 2026 | — | — | — | — | ||||||||||||
| March 1 – March 31, 2026 | 82,877 | $ | 6.25 | 82,877 | $ | 14,482,019 | ||||||||||
| Total | 82,877 | 82,877 | ||||||||||||||
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(c)
36
Item 6. Exhibits
| Exhibit Number |
||
| 31.1 | Certification by principal executive officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Certification by principal financial officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | Certification by principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certification by principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
37
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Proficient Auto Logistics, Inc. | ||
| Date: May 14, 2026 | By: | /s/ Richard O’Dell |
| Richard O’Dell | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| By: | /s/ Brad Wright | |
| Brad Wright | ||
| Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) | ||
38
Exhibit 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, Richard O’Dell, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2026, of Proficient Auto Logistics, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 14, 2026 | |
| /s/ Richard O’Dell | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Brad Wright, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2026, of Proficient Auto Logistics, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 14, 2026 | |
| /s/ Brad Wright | |
| Chief Financial Officer and Secretary | |
| (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Proficient Auto Logistics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard O’Dell, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| /s/ Richard O’Dell | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Dated: May 14, 2026
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Proficient Auto Logistics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brad Wright, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| /s/ Brad Wright | |
| Chief Financial Officer and Secretary | |
| (Principal Financial Officer) |
Dated: May 14, 2026
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.