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But Alexander Parris, a research analyst with Barrington Research, questioned why the company’s stock has been a laggard when Proficient is generating strong cash flows. The company reported free cash flow–EBITDA minus capital expenditures–of $11.5 million in the third quarter. “You generate on a free cash flow basis more than any other company in the group, whether truckload or LTL,” Parris said. With a market cap that on Wednesday stood at about $182 million, per Barchart data, a full-year free cash flow at the top of the company’s estimate of $30 million to $40 million for this year would be a cash flow yield of 20% or more, measured as cash flow to market capitalization. Better than the rest Parris said the “next closest” in the trucking sector would be about 5% to 6%. “What’s it going to take to get the market to recognize this free cash flow characteristic?” Parris asked. Parris may have spoken too soon. On the back of the Proficient earnings, the company’s share price shot higher. At the close of trading Wednesday, it was up $1.97 to $8.55, an increase of almost 30%. Proficient stock already had been trending higher. With the gains Wednesday, it was up more than 46.2% in the last month and 14.8% for the three months. However, even with the Wednesday increases, Proficient stock was down about 8% in the last 52 weeks and down 25.3% from a 52-week high February 11. Proficient CFO Bradley Wright said in discussions he has held with investors, “I think most of them appreciate the fact that the business is kind of an outsized cash flow return.” Looking forward to “working off some of these other deprecation levels and amortization,” Wright said the impact on earnings when those are behind Proficient may “wake other people up.” “But I know, Alex,” Wright said. “We’re as flummoxed by it as you are.” Net numbers aren’t good On a net basis, Proficient has regularly been unprofitable on a net income basis, though other metrics, like operating income, have been positive at times. In its 10-K filing with the SEC earlier this year, the company formed in the spring reported a net loss of $8.5 million for the 12 months. The earnings call touched on several other market conditions. Amy Rice, the company’s president, said “pricing dynamics are pretty weak right now.” “We would like to see a more constructive market for pricing with supply and demand a bit more balanced,” Rice said. But she did say that the revenue per unit (R{U) metric, a key barometer in hauling authors, is expected to be “stable.” Rice added that Proficient has several contracts with OEMs that are “awaiting awards and sort of in the process of being resolved.” “You should expect to see more consistent RPU year-over-year,” she said. Comparisons to the third quarter of 2024 are impacted by the acquisition of Brothers Auto Transport in April. But Rice said even taking that into account, October business was “slightly improved” from 2024’s third quarter. In the auto hauling business, Rice said November and December are typically strong as dealers seek to empty their lots of the prior year’s model cars and make room for new ones. But November so far, she said, has been marked by “sluggishness.” The expected uptick is not being seen this year by Proficient, Rice said. Proficient’s operating ratio was 96.3% in the third quarter. That was a slight improvement from the 96.7% in the second quarter of this year, but a more notable improvement from 98.8% a year ago. On the call, CEO Richard O’Dell said the company’s target is to improve the OR by “at least” 150 bps in 2026 over its 2025 level. Three of seven opcos are 90% of better ORs Wright reiterated a statement he made on the second quarter earnings call that three of the seven operating companies that make up Proficient Auto were posting an OR that is 90% or better. He added that “generally there has been a pretty broad improvement across almost all the operating companies” even as revenue has stayed mostly constant. Third quarter revenue was $114.3 million. Sequentially, that is slightly down from $115.5 million. Comparisons to the third quarter of 2024 are not an apples-to-apples basis given the acquisition of Brothers. O’Dell, discussing the ongoing efforts to have greater cooperation among the seven operating companies, said load sharing among the companies rose to 11% of revenues in the quarter, up from 9% sequentially, “reducing empty miles and contributing to improved asset utilization.” More articles by John Kingston RXO faces a rate squeeze: what it means for the 3PL Beautiful women, open doors and drivers: trucking cybersecurity risks proliferate
