Proficient Auto Logistics - Earnings Call - Q4 2024

Executive Summary

• Q4 2024 revenue was $95.1M, up 4% q/q but down 15.9% y/y; adjusted operating ratio improved 50 bps to 98.3% while adjusted EBITDA fell to $7.5M (7.8% margin), reflecting a weak spot market and reduced dedicated fleet activity.
• The quarter’s mix and pricing were pressured: spot premium narrowed to 16% (vs ~18% in Q3 and >100% in 1H 2024), dedicated fleet revenue fell to $3.7M (vs $14.2M in Q4’23), and units delivered were 521,476 (-4% y/y).
• Management highlighted an industry capacity shake-out (closure of a top-5 carrier) and active OEM bid cycles as share gain catalysts as Proficient integrates its national platform and fleet additions.
• Q1 2025 color: January ran ~-17.5% y/y through the update window due to typical seasonal weakness and weather, but management expects full-quarter revenue and OR to be similar to Q4 2024 (implying stabilization into quarter-end).
• Balance sheet remained positioned for growth: $15.8M cash, $82.4M debt (net leverage ~1.6x on FY24 adjusted EBITDA), ~$10M Q4 equipment capex, and new $25M term loan/$20M revolver completed in Q3.

What Went Well and What Went Wrong

What Went Well

• Integration and tech standardization: “all of our operating companies are now using [the] Magnus” TMS; management points to enhanced analytics and purchasing synergies (fuel, tires, parts) to improve efficiency and margin over time.
• Sequential execution in a weak market: revenue +4% q/q, adjusted OR improved 50 bps q/q to 98.3%; CEO: “achieving top line growth of 4%… and improving adjusted operating ratio by 50 basis points quarter over quarter”.
• Pipeline for share gains: reported closure of a top-5 carrier reduces capacity; multiple OEM regional/national bids under way; management expects to benefit via market share gains and is positioned with newer fleet and subhaul network.

What Went Wrong

• Pricing compression and mix: spot premium declined to 16% (Q4) from ~18% (Q3) and >100% (1H 2024); revenue per unit fell notably y/y, especially for subhaulers (Q4 subhaul $163.49 vs $198.59 in Q4’23).
• Dedicated fleet slump: dedicated revenue dropped to $3.7M (Q4) from $14.2M (Q4’23) as dealer inventories and slack capacity reduced urgency for premium service.
• Profitability pressure: adjusted EBITDA margin compressed to 7.8% (from 10.5% in Q3 and 13.9% in Q4’23), and the company posted a GAAP operating loss (-$1.9M) and pre-tax loss (-$3.8M) amid lower fixed-cost absorption and higher D&A post-merger.

Transcript

Alexander Paris (Analyst)

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brad Wright, Chief Financial Officer. Please go ahead.

Bradley Wright (CFO)

Good afternoon, everyone. I'm Brad Wright, Chief Financial Officer of Proficient Auto Logistics. Thank you for joining us on Proficient's fourth quarter 2024 earnings call. Under SEC rules, our Form 10-K covering the three and 12-month periods ending December 31, 2024, will include financial statements for both the predecessor accounting entity, Proficient Auto Transport, and the successor entity, Proficient Auto Logistics. We are not required to provide, and the Form 10-K will not contain pro forma financial data for the combined companies. However, our earnings release provides comparative summary combined financial information for the fourth quarter and the 12 months ended December 31 for the combined companies. Note that these results are preliminary as our financial audit for 2024 is not yet complete. Our earnings release can be found under the Investor Relations section of our website at proficientautologistics.com.

Our 10-K, when filed, can also be found under the Investor Relations section of our website. During this call, we will be discussing certain forward-looking information. This information is based on our current expectations and is not a guarantee of future performance. I encourage you to review the cautionary statement in our earnings release describing factors that could cause actual results to differ from those expressed by the forward-looking statements. Further information can be found in our SEC filings. During this call, we may also refer to measures that include adjusted operating income, adjusted operating ratio, EBITDA, and adjusted EBITDA. Please refer to the portions of our earnings release to provide reconciliations of those profitability measures to GAAP measures such as operating earnings and earnings before income taxes.

Joining me on today's call are Rick O'Dell, Proficient's Chairman and Chief Executive Officer, and Amy Rice, our President and Chief Operating Officer. We will provide a company update as well as an overview of the company's combined results for the fourth quarter. After our prepared remarks, we will open the call to questions. During the Q&A, please limit yourself to one question plus one follow-up. You may get back into the queue if you have additional questions. Now, I would like to introduce Rick O'Dell, who will provide the company update.

Richard O'Dell (Chairman and CEO)

Thank you, Brad, and good afternoon, everyone. I'll start out with an overview of our operations during the fourth quarter and some trends that provide insight into our expectations as we enter 2025. The macro auto industry environment in the fourth quarter was largely a continuation of the weakness we described in the third quarter. October unit volumes were relatively strong, up approximately 6% versus the same month in 2023. By mid-November, the pace of volumes slowed, ending down 4% for the quarter versus the fourth quarter of 2023. As in the third quarter, the larger issue was unit prices as slack transportation capacity and relatively high dealer inventory resulted in ongoing limited spot opportunities. Persistent downward pressure on spot pricing when opportunities present and a weak demand for dedicated fleet services.

Our dedicated fleet service generated revenue of $3.7 million during the fourth quarter compared to $14.2 million in the fourth quarter of 2023. Our revenue from spot buy opportunities during the quarter comprised 5% of total revenue versus 14% a year ago. The revenue per unit from spot buys fell by 57% year over year, and the spot premium over contract pricing was 16% in the fourth quarter compared to over 100% during the first two quarters of this year or this past year. While we believe the current spot market to be unusually weak, we also do not expect to return to the levels a year ago as the post-COVID through early 2024 time period was marked by unique industry supply chain dislocation that drove transportation premiums well above a typical market.

Seasonally adjusted annual sales rates, or SAAR, increased over the course of the fourth quarter with industry estimates for all three months above 16 million units, peaking at 16.8 million in December. The increased sales, particularly in the second half of the quarter, however, came through a combination of reduction in dealer inventories and new shipments into dealer lots. Average day sales in dealer inventory ended 2024 at approximately 46 days, down from 58 days at the end of November and between 60 and 90 days throughout the third quarter. While the lower level of year-end inventory would be more promising for replenishment, demand was sustained sales momentum in January. SAAR declined to 15.6 million units. In spite of these various industry headwinds, Proficient achieved approximately 4% growth in both units delivered and total revenue during the fourth quarter versus the third quarter of 2024.

We also continue to strengthen the foundations that will set the stage for future growth and profitability at Proficient, improving adjusted operating ratio by 50 basis points during a period of persistent weak revenues. There has recently been a significant amount of media attention regarding disruption in the auto hauling landscape and speculation about the impact to Proficient and others in our industry.

As a matter of policy and to adhere to confidentiality around OEM carrier relationships, Proficient will not comment about specific competitors or customers. That being said, the weak external environment has been challenging for our industry segment. The reported closure of a top five carrier will reduce near-term capacity and likely has widespread impact in the industry.

We remain confident that with our service capabilities and the related value proposition, we'll be able to do more for our OEM customers and expect to benefit over time through market share gains. Also, we should note that in addition to some of the reported auto haul disruption in the media, there are several OEMs in the midst of scheduled regional or national bid processes such that a meaningful amount of new vehicle volume transportation is being decisioned across the OEM landscape this year.

Proficient is positioning itself and competing for incremental market share that should be sustainable and accretive to our portfolio over the long term. With regard to major integration and strategic initiatives, we continue to progress nicely. On the technology front, all of our operating companies are now using Magnus Technologies' transportation management system.

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

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

Bradley Wright (CFO)

Thank you, Rick. I'll start with a few summary statistics. All prior year comparisons are for the combined companies. Operating revenue of $95.1 million in the quarter was up 4% from last quarter, but down 15.9% from the prior year. Units delivered of 521,476 represents a 4% increase over the third quarter, but a 4% decline from the fourth quarter of 2023. Revenue per unit, excluding fuel surcharge, was approximately $169, unchanged from the third quarter, but down approximately 14% from $197 in the fourth quarter of last year. Company deliveries were 37% of revenue in Q4 versus 39% in the third quarter. Sub-haul deliveries, therefore, were 63% of revenue in Q4 versus 61% in the prior quarter. The company had approximately $15.8 million of cash and equivalents on December 31st, 2024. Aggregate debt balances at quarter-end were approximately $82.4 million for net debt of $66.6 million.

The increase in net debt from last quarter reflects our financing of fleet growth during the quarter. Total common shares outstanding ended the quarter at $27 million, which is unchanged from that disclosed in our third quarter Form 10-Q. Looking ahead to the first quarter of 2025, January was challenged by not only a weak SAAR month and the typical post-year-end seasonal volume weakness, but also significant weather events in many areas of the country, such as the Northeast, New Mexico, Oklahoma, Texas, and the Gulf Coast that shut down local operations for days at a time. Wildfires in Southern California also delayed loading and delivery intermittently over a period of a few weeks. As a result, quarter-to-date unit volumes and revenue are lower by 17.5% versus the comparable period of last year.

However, we expect to recover much of this shortfall through the end of the quarter based on visibility to the near-term pipeline, such that full quarter revenue and profitability are likely to be similar to the fourth quarter of 2024. The full-year outlook for 2025 remains marked by some large uncertainties in the macro environment, though we do expect sequential momentum as we move into the second quarter and the second half of the year, with expectation of improved full-year 2025 results over 2024. Operator we'll now take questions.

Operator (participant)

Thank you. As a reminder to ask the question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Bruce Chan with Stifel. Your line is now open.

Matthew Milask (Managing Director and Analyst)

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

Richard O'Dell (Chairman and CEO)

Good, Matt.

Amy Rice (President and COO)

Good, Matt.

Matthew Milask (Managing Director and Analyst)

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

Richard O'Dell (Chairman and CEO)

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

Matthew Milask (Managing Director and Analyst)

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

Amy Rice (President and COO)

We do not have any updated view of the market relative to what was shared at the Investor Roadshow. That would be a reasonable estimate of our understanding at the time.

Matthew Milask (Managing Director and Analyst)

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

Amy Rice (President and COO)

Yeah, I can speak to that a little bit. Volume that fits our existing network is very attractive to us, and we're bidding on all of those opportunities. Adjacent volume that ties into an existing base of drivers, assets, terminals is a good growth bit. We are very calculating before we enter an entirely new market and pursue new build traffic. We'd be looking for a concentrated, sustainable level of volume to go into new markets, and then we build around that both organically and through acquisition. To answer your question, it's a bit of both, right? Driving density, particularly with backhaul opportunity in the existing network, is the most attractive rate to us. Building in adjacent territories is also a pursuit that we have in mind, and they're really not one or the other. We have the bandwidth to do both.

We're more thoughtful, I would say, around new market builds, if that's helpful.

Matthew Milask (Managing Director and Analyst)

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

Richard O'Dell (Chairman and CEO)

Thank you.

Operator (participant)

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

Tyler Brown (Analyst)

Hey, good afternoon, guys.

Richard O'Dell (Chairman and CEO)

Good afternoon, Tyler.

Tyler Brown (Analyst)

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

Amy Rice (President and COO)

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

Tyler Brown (Analyst)

Okay. Okay. Episodic. If I go back to ProFleet, I think ProFleet is running at around $4 million a quarter, let's call it, in revenue. Number one, is that basically at a minimum? Two, how would ProFleet react in a capacity-challenged market? Could we see that number jump quite a bit if there is a lot of market disruption?

Amy Rice (President and COO)

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

Tyler Brown (Analyst)

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

Amy Rice (President and COO)

Yes.

Tyler Brown (Analyst)

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

Amy Rice (President and COO)

Tyler, I think we're also trying to learn what a normal auto haul market looks like. Proficient came into this at a time that was pretty atypical for the market. To Rick's comment, the spot premium in the 2022-2023 time period, I think, was elevated in a manner that we're not likely to see again in the current environment. We think we're on the low side of that continuum now. What we think might be typical is a spot premium that looks a little more like maybe 25%-40%. Don't take me at exact numbers there, but directionally, that would feel a little more like where capacity is in shorter supply.

Tyler Brown (Analyst)

Okay. That's helpful. Even just the range, very helpful. I know that you have this heavy subcontractor capacity pool, but how much slack capacity do you have in the company-owned fleet? Maybe even to that, how much do you have? It's hard. I know it'd be harder to say in the subcontractor piece, but how much slack capacity do you feel like you have ready at your fingertips?

Amy Rice (President and COO)

Yep. On the company fleet side of things, recall that we invested roughly $30 million of capital in new equipment through the second half of last year. We have one of the newer fleets in the industry. Some of that was replenishment. A lot of that was investment for future growth. Those orders were placed in a market that was relatively stronger than the time at which those orders were delivered. We do have open assets available. We will be hiring to fill those assets and deploying those assets into the market where we see growth come online. We will continue to invest in truck capacity with growth and have a capital plan to do so again this year. That, of course, is commensurate with opportunity that we see and will measure and balance accordingly.

On the sub-haul side of things, I would say there is a great deal of capacity available in the marketplace. We have, call it, 2,500 sub-haul carriers or more across our network that are vetted by us, that are able to do work on behalf of our various operating companies. As there is very little brokerage freight in the current environment, sub-haulers are keen on work and providing services. I would say there's a lot of slack capacity currently.

Tyler Brown (Analyst)

Lots of Slack capacity. Brad, last one. Just any thoughts on CapEx in 2025? And what would be a reasonable number for 2024, actually?

Bradley Wright (CFO)

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

Tyler Brown (Analyst)

Okay. Perfect. Excellent. Thank you for the time.

Bradley Wright (CFO)

Thanks, Tyler.

Operator (participant)

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

Ryan Merkel (Analyst)

Hey, everyone. Thanks for taking the question. I wanted to ask on one Q a little bit more. I think you said January's kind of trending down, or at least quarter to date is trending down 17.5%. Then you said you thought you'd make up some of that shortfall, and you had some visibility. Could you just talk about what that visibility is and why you think you'll make it up?

Amy Rice (President and COO)

Sure. This is Amy. We get, depending on the OEM and the mode by which the cars are dispositioned to us, visibility of anywhere from one to three weeks. For example, import cars on the water, we get somewhat longer visibility. We do have an idea of what is coming in the near-term pipelines as well as through customer conversations. Generally, what we're hearing is a cautious outlook, but some reassurance that volume should continue or should begin to ramp up here, particularly as we move through March and into April. OEMs are at least guiding us that they think volumes will turn up a bit more March into April and then looking to the back half of the year.

As we look at the first quarter, weakness to date, near-term pipeline in the locations where we participate, we expect to see some stronger volume coming.

Ryan Merkel (Analyst)

Got it. Okay. And then just a clarification. I think you said you think Q1 will look like Q4. Should we take that to mean revenue and EBITDA will look like Q4?

Bradley Wright (CFO)

Revenue and OR, I would say. Yeah.

Ryan Merkel (Analyst)

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

Amy Rice (President and COO)

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

Ryan Merkel (Analyst)

Okay.

Richard O'Dell (Chairman and CEO)

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

Ryan Merkel (Analyst)

Yeah. That makes sense, Rick. Okay. Last one for me. You mentioned the press release. Strength of our balance sheet will be a differentiating factor in the marketplace. Can you just talk about does 2025 feel like there's a lot of new business to win just broadly? How are you thinking about that? Am I thinking about that the right way, just given the challenges that the industry is facing? You're probably in a pretty good position relative.

Amy Rice (President and COO)

Yeah. I would think about it in two ways. One is, over the last couple of quarters, we've shared with you our figures on net new contract wins. Actually, to give an update there, since the last earnings call, we have had three net new contract wins, two of which are larger than average size. The point on bringing that up is, each quarter, we have had net new contract wins, but we have been in a weak market. If the market starts to improve, the benefit of those market share gains should become more visible in our results. We've talked quite a bit, particularly in the last quarter of call.

Contract business is stable, profitable business for us, and we want to partner with customers in a way where we show up for them day after day with a high service level and work to flex with their needs and volatility. We want to win in the contract space. We want to participate in the spot market when opportunities present, and we can put capacity up against it. Our main focus is sustainable, accretive market share growth in the contract business. The other way I would think about that, to your question, is Rick mentioned in his opening comments, there are several open bids that are material in scale. A handful or so of OEMs have done either what I would describe as super regional bids or national bids that become effective anywhere from May of this year to as late as January of 2026.

We have gone and positioned ourselves to gain incremental business with those key customers with the strength of our solar network and offering. We feel pretty good about how we are positioned to grow coming out of those bids. As we look at market share through the year, as those are dispositioned and those new contract terms take effect, we would look to some additional opportunity in the back part of the year from that.

Ryan Merkel (Analyst)

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

Operator (participant)

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

Alexander Paris (Analyst)

Hi guys. Thanks for fitting me in and taking my questions. Rick, I want to come at that big question another way. Given your experience in the LTL space, CEO of Saia for 14 or finished as CEO, but was there for 14 years. I think 14 years as CEO. And you're still the non-executive chairman today. You lived through the bankruptcy of Yellow Roadway. I'm wondering if you could maybe create a parallel and even a timeline. What should we expect first? I would think if the number two player in the auto hauling business exits the business, that volume needs to find a new way to the dealerships. Does it start with brokers? Does it include bids? Whatever parallel you can make to the LTL business, if there is a parallel to make, would be helpful, I think.

Richard O'Dell (Chairman and CEO)

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

You have to have the tractor and trailer and the driver in the right location to be able to service the requirements. Our solution to that, obviously, in the near term would be to source with subcontractor capacity and then optimize with in-source your own drivers there over some period of time. We're positioned to react to those opportunities quickly. As you probably would expect, as the industry goes through a transition of the incremental business, some carriers handle it better than others. A lot of times, the customers, again, will try to reoptimize over a period of time. I would imagine there's kind of a two-leg impact to the closure: there would be some immediate sourcing of the business, and then there's probably going to be a second round of opportunities coming at us.

Alexander Paris (Analyst)

Has Proficient seen any impact from that first round yet?

Amy Rice (President and COO)

We are seeing some impact. The other thing I would share, Alex, is from our conversations with the OEMs, this situation is broader than just the transportation of the cars. It really is a risk management exercise for the OEMs from their production to the dealer supply chain. It goes a bit upstream. They are looking to be sure they do not see plant shutdowns as a result of disruption in transportation carriers. There is a puzzle with a lot of pieces here that our customers are trying to solve. Some of those things have to be solved in multiple sequences and rounds. To Rick's point, I think that will, in some sense, play out over time.

Richard O'Dell (Chairman and CEO)

There are some nearly immediate short-term impacts that we feel will offset some of the current market weakness that we're experiencing. That would be indicative of a kind of a recovery of volumes, particularly in March from the softness that we've seen year to date.

Alexander Paris (Analyst)

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

Richard O'Dell (Chairman and CEO)

Yes, it is.

Alexander Paris (Analyst)

Gotcha. As you both said, then there is that second opportunity once they go through the risk management exercise to take on more volume down the road.

Richard O'Dell (Chairman and CEO)

Right.

Alexander Paris (Analyst)

Is there any reason that Proficient shouldn't get its fair share of this incremental volume that's coming onto the market for the other players, these market share opportunities?

Amy Rice (President and COO)

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

Alexander Paris (Analyst)

Gotcha. That's helpful. I appreciate the additional color.

Operator (participant)

Thank you.

Richard O'Dell (Chairman and CEO)

Okay. Good.

Operator (participant)

As a reminder to ask a question at this time, please press star one one on your touch-tone telephone. Our next question is a follow-up from Bruce Chan with Stifel. Your line is now open.

Matthew Milask (Managing Director and Analyst)

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

Richard O'Dell (Chairman and CEO)

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

Matthew Milask (Managing Director and Analyst)

That's great. Great color. Thank you.

Operator (participant)

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

Richard O'Dell (Chairman and CEO)

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

Operator (participant)

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