Proficient Auto Logistics, Inc

Previous wording

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025

Current wording

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025

Previous wording

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the related notes of Proficient and Proficient Transport included elsewhere in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025 (the “Quarterly Report”) and the consolidated financial statements and related notes of Proficient and Proficient Transport for the year ended December 31, 2024 included in Proficient’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2025 (the “Annual Report”).

Current wording

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the related notes of Proficient and Proficient Transport included elsewhere in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025 (the “Quarterly Report”) and the consolidated financial statements and related notes of Proficient and Proficient Transport for the year ended December 31, 2024, included in Proficient’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2025 (the “Annual Report”).

Previous wording

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 based upon information obtained from leadership of the Auto Haulers Association of America, utilizing roughly 1,350 auto transport vehicles and trailers on a daily basis, including approximately 920 Company-owned transport vehicles and trailers, and employing 785 dedicated employees as of June 30, 2025. 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. Additional customers include auto dealers, auto auctions, rental car companies and auto leasing companies.

Current wording

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 of over 800 owned assets and employing 804 dedicated employees as of September 30, 2025. 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. Additional customers include auto dealers, auto auctions, rental car companies and auto leasing companies.

Previous wording

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. On May 13, 2024, the Company completed its 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. Thereafter, on August 16, 2024, the Company acquired Auto Transport Group, LC, (“ATG”), then on November 1, 2024, the Company acquired Utah Truck & Trailer Repair, LLC, (“UTT”), 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”.

Current wording

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. On May 13, 2024, the Company completed its 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. Thereafter, on August 16, 2024, the Company acquired Auto Transport Group, LC, (“ATG”), and on November 1, 2024, the Company acquired Utah Truck & Trailer Repair, LLC, (“UTT”), 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”.

Previous wording

Proficient Auto Logistics, Inc. has been identified as the designated accounting acquirer (“Successor”) of each of the Founding Companies and Proficient Transport has been identified as the designated accounting predecessor (“Predecessor”) to the Company. As a result, Management’s Discussion And Analysis Of Results Of Operations And Financial Condition For The Three and Six Months Ended June 30, 2025 and June 30, 2024 for each of Proficient and Proficient Transport are included in this Quarterly Report on Form 10-Q. A black-line between the Successor and Predecessor periods has been placed in the financial tables below to highlight the lack of comparability between these two periods. Please refer to Note 3, “Business Combinations”.

Current wording

Proficient Auto Logistics, Inc. has been identified as the designated accounting acquirer (“Successor”) of each of the Founding Companies and Proficient Transport has been identified as the designated accounting predecessor (“Predecessor”) to the Company. As a result, Management’s Discussion and Analysis of Results of Operations and Financial Condition for the three and nine months ended September 30, 2025 and September 30, 2024 for each of Proficient and Proficient Transport are included in this Quarterly Report on Form 10-Q. A black-line between the Successor and Predecessor periods has been placed in the financial tables below to highlight the lack of comparability between these two periods. Please refer to Note 3, “Business Combinations”.

Previous wording

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.

Current wording

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 that 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.

Previous wording

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.

Current wording

Our estimates of the potential outcome of any uncertain tax issue are 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.

Previous wording

In our Subhaulers Segment, we generate revenue by independent owner operators (who run under our DOT authority) and independent third-party carriers to 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 carriers.

Current wording

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 carriers.

Previous wording

We report our financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP measures, including EBITDA and Operating Ratio, provide useful information in measuring 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.

Current wording

We report our financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP measures, including EBITDA, Adjusted EBITDA and Adjusted Operating Ratio, provide useful information in measuring 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.

Previous wording

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.

Current wording

EBITDA and Adjusted 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.

Previous wording

Adjusted EBITDA represents net income (loss) plus interest expense, income tax expense (benefit), depreciation expense, intangible amortization expense, and share-based compensation expenses.

Current wording

Adjusted EBITDA represents net income (loss) plus interest expense, income tax expense (benefit), depreciation expense, intangible amortization expense, share-based compensation expenses and other non-recurring items.

Previous wording

Results of Operations for the six months ended June 30, 2025 and June 30, 2024 (Successor) and period ended January 1, to May 12, 2024 (Predecessor)

Current wording

Results of Operations for the three months ended September 30, 2025 and September 30, 2024 (Successor)

Previous wording

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 third-party carriers (Subhaulers). Company Drivers segment revenue, before fuel surcharges and other reimbursements, is primarily generated through trucking services provided by the Company’s service offerings to OEMs and the secondary market. Subhaulers segment revenue before fuel surcharges and other reimbursements is primarily generated through dispatching and 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.

Current wording

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 third-party carriers (Subhaulers). The Company Drivers segment revenue, before fuel surcharges and other reimbursements, is primarily generated through trucking services provided by the Company’s service offerings to OEMs and the secondary market. The Subhaulers segment revenue before fuel surcharges and other reimbursements is primarily generated through dispatching and 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.

Previous wording

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.

Current wording

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 are the cost of fuel per mile and the number of miles driven by company drivers.

Previous wording

Purchased transportation increased by $50.4 million, or 593%, to $58.9 million in the three months ended June 30, 2025 compared to $8.5 million for the period April 1 to May 12, 2024. The increase in purchased transportation was driven by the Successor period including expenses from the acquired entities, as well as the expansion of the subhauler network, revenue from new contracts and spot buy opportunities.

Current wording

Purchased transportation increased by $11.9 million, or 26.3%, to $56.9 million in the three months ended September 30, 2025, compared to $45.0 million for the same period last year. This increase was primarily driven by the expansion of our subhauler network, revenue from new contracts and spot buy opportunities, as well as expenses related to a full quarter of the ATG acquisition in the third quarter of 2025 and the Brothers acquisition completed in the second quarter of 2025.

Previous wording

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 734% to $6.4 million in the three months ended June 30, 2025 compared to $772,000 for the period April 1 to May 12, 2024. This is primarily due to the Successor period including expenses from the acquired entities.

Current wording

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 18.4% to $6.7 million in the three months ended September 30, 2025, compared to $5.7 million for the same period last year. This increase was mainly driven by a full quarter of expenses from the ATG acquisition in third quarter of 2025 and the Brothers acquisition completed in the second quarter of 2025.

Previous wording

Depreciation and amortization and the loss (gain) on sale of equipment increased by $13.2 million, or 1887%, to $13.9 million in the six months ended June 30, 2025 compared to $700,000 for the period January 1 to May 12, 2024. The increase in depreciation and amortization and the loss (gain) on sale of equipment was driven by the Successor period including expenses from the acquired entities.

Current wording

Depreciation and amortization and the loss (gain) on sale of equipment increased by $1.2 million, or 18.7%, to $7.7 million in the three months ended September 30, 2025, compared to $6.5 million in the same period last year. This increase in depreciation was driven by assets purchased or acquired through acquisitions.

Previous wording

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 actuarial accruals and developments in large, prior year claims. The number of accidents tends to increase with the miles we travel. 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.

Current wording

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 and developments in large, prior year claims. The number of accidents tends to vary with the miles we travel. 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.

Previous wording

Insurance premiums and claims increased by $4.9 million, or 944%, to $5.4 million in the three months ended June 30, 2025 compared to $515,000 for the period April 1 to May 12, 2024. The increase in insurance premiums and claims was driven by the Successor period including expenses from the acquired entities. Subsequent to the end of the second quarter, we consolidated our casualty and workers’ compensation insurance plans into a single policy, which will benefit the company by not only providing cost savings relative to similar coverage levels spread across numerous carriers, but also simplifying administration, streamlining the claims process, and ensuring better coverage consistency.

Current wording

In August 2025, we consolidated our auto liability, general liability and worker’s compensation insurance plans into a single policy, which will benefit the company by not only providing cost savings relative to similar coverage levels spread across numerous carriers, but also simplifying administration, streamlining the claims process, and ensuring better coverage consistency.

Previous wording

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 $4.5 million, or 114%, to $8.4 million in the six months ended June 30, 2025 compared to $3.9 million for the period January 1 to May 12, 2024. The increase in general, selling, and other operating expenses was primarily due to the Successor period including expenses from the acquired entities.

Current wording

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 remained flat at $4.6 million for the three months ended September 30, 2025, compared to $4.5 million in the same period last year.

Previous wording

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 increased by $1.6 million, or 593%, to $1.8 million in the three months ended June 30, 2025 compared to $265,000 million for the period April 1 to May 12, 2024. The increase was primarily due to the Successor period including interest expense from the acquired entities.

Current wording

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 increased by $275,000, or 19.6%, to $1.7 million in the three months ended September 30, 2025, compared to $1.4 million for the same period last year. The increase was primarily due to the term loan entered into in November 2024.

Previous wording

Operating ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue. The Company’s operating ratio decreased by 100.5% to 99.9% in the three months ended June 30, 2025 as compared to 272.1% for the period April 1 to May 12, 2024. The decrease in operating ratio is primarily due to the Predecessor’s salaries expense including bonuses paid by the seller in connection with the IPO. Excluding successor stock-based compensation and intangible amortization expense, the adjusted operating ratio for the three months ended June 30, 2025 is 96.7%. We are working to achieve synergies across all operating companies, which should reduce the operating ratio over time. See “Non-GAAP Financial Measure” section for the Company’s calculation of operating ratio and adjusted operating ratio.

Current wording

Operating ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue. The Company’s operating ratio decreased to 100.1% in the three months ended September 30, 2025 compared to 102.4% for the period last year. This decrease can be attributed to the company working to achieve synergies across all operating companies, which reduces the operating ratio over time. See “Non-GAAP Financial Measures” section for the Company’s calculation of operating ratio and adjusted operating ratio.

Previous wording

Adjusted EBITDA — Adjusted EBITDA represents net income (loss) plus interest expense, income tax expense (benefit), depreciation expense, intangible amortization expense, and share-based compensation expenses. Adjusted EBITDA increased by $34.0 million, or 149.5%, to $11.3 million in the second quarter of 2025 compared to $(22.8) million for the period April 1 to May 12, 2024. The increase was due to the Successor period having more revenue from the acquired entities and the predecessor period including bonuses paid by the seller in connection with the IPO. See “Non-GAAP Financial Measure” section for the Company’s calculation of Adjusted EBITDA.

Current wording

Adjusted EBITDA — Adjusted EBITDA represents net income (loss) plus interest expense, income tax expense (benefit), depreciation expense, intangible amortization expense, and share-based compensation expenses. Adjusted EBITDA increased by $2.4 million, or 25%, to $12.0 million in the third quarter of 2025, compared to $9.6 million for the same period last year. The increase was due to higher revenue year over year and cost synergies the Company is implementing, including the consolidation of insurance policies. See “—Non-GAAP Financial Measures” above for the Company’s calculation of Adjusted EBITDA.

Previous wording

In the Company Driver segment, operating revenues increased by $38.5 million, or 1,298%, to $41.5 million in the three months ended June 30, 2025 compared to $3.0 million for the period April 1 to May 12, 2024. The increase in the Company Drivers segment’s revenue was driven by the Successor period including revenue from the acquired entities and the Predecessor period is only for half of the quarter.

Current wording

In the Company Driver segment, operating revenues increased by $64.2 million, or 124.2%, to $115.8 million in the nine months ended September 30, 2025, compared to $51.7 million for the same period last year. The increase in the Company Drivers segment’s revenue is driven by 2024 only showing a partial year of revenues for the acquired companies.

Previous wording

In the Subhaulers segment, operating revenues increased by $63.7 million, or 611%, to $74.1 million in the three months ended June 30, 2025 compared to $10.4 million for the period April 1 to May 12, 2024. The increase in the Subhaulers segment’s revenue was driven by the Successor period including revenue from the acquired entities and the Predecessor period is only for half of the quarter.

Current wording

In the Subhaulers segment, operating revenues increased by $113.5 million, or 118.5%, to $209.2 million in the nine months ended September 30, 2025, compared to $95.7 million for the same period last year. The increase in the Subhaulers segment’s revenue is driven by 2024 only showing a partial year of revenues for the acquired companies.

Previous wording

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 551% to $12.3 million in the six months ended June 30, 2025 compared to $1.9 million for the period January 1 to May 12, 2024. This is primarily due to the Successor period including expenses from the acquired entities.

Current wording

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 135.1% to $19.0 million in the nine months ended September 30, 2025, compared to $8.1 million for the same period last year. This increase was primarily driven by 2024 including only five and a half months of expenses for the acquired companies

Previous wording

Depreciation and amortization and the loss (gain) on sale of equipment increased by $7.1 million, or 2407%, to $7.4 million in the three months ended June 30, 2025 compared to $296,000 for the period April 1 to May 12, 2024. The increase in depreciation and amortization and the loss (gain) on sale of equipment was driven by the Successor period including expenses from the acquired entities.

Current wording

Depreciation and amortization and the gain on sale of equipment increased by $11.7 million, or 118.3%, to $21.6 million in the nine months ended September 30, 2025, compared to $9.9 million in the same period last year. This increase was primarily driven by 2024 including only five and a half months of depreciation for the acquired companies and assets purchased during 2025.

Previous wording

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 actuarial accruals and developments in large, prior year claims. The number of accidents tends to increase with the miles we travel. 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.

Current wording

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, and developments in large, prior year claims. The number of accidents tends to vary with the miles we travel. 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.

Previous wording

Insurance premiums and claims increased by $9.2 million, or 834%, to $10.3 million in the six months ended June 30, 2025 compared to $1.1 million for the period January 1 to May 12, 2024. The increase in insurance premiums and claims was driven by the Successor period including expenses from the acquired entities. Subsequent to the end of the second quarter, we consolidated our casualty and workers’ compensation insurance plans into a single policy, which will benefit the company by not only providing cost savings relative to similar coverage levels spread across numerous carriers, but also simplifying administration, streamlining the claims process, and ensuring better coverage consistency.

Current wording

In August 2025, we consolidated our auto liability, general liability and worker’s compensation insurance plans into a single policy, which will benefit the company by not only providing cost savings relative to similar coverage levels spread across numerous carriers, but also simplifying administration, streamlining the claims process, and ensuring better coverage consistency.

Previous wording

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 $1.3 million, or 45%, to $4.3 million in the three months ended June 30, 2025 compared to $3.0 million for the period April 1 to May 12, 2024. The increase in general, selling, and other operating expenses was primarily due to the Successor period including expenses from the acquired entities.

Current wording

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 increased by $6.3 million, or 94.2% to $13.0 million for the nine months ended September 30, 2025, compared to $6.7 million in the same period last year. This increase was primarily driven by 2024 including only five and a half months of expenses for the acquired companies.

Previous wording

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 increased by $2.7 million, or 375%, to $3.4 million in the six months ended June 30, 2025 compared to $717,000 for the period January 1 to May 12, 2024. The increase was primarily due to the Successor period, which includes interest expense from the acquired entities.

Current wording

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 increased by $3.1 million, or 148.7%, to $5.1 million in the nine months ended September 30, 2025, compared to $2.0 million for the same period last year. This increase was primarily driven by 2024 including only five and a half months of expenses for the acquired companies and the term loan entered into in November 2024.

Previous wording

Operating ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue. The Company’s operating ratio decreased by 89.4% to 101.1% in the six months ended June 30, 2025 as compared to 151.0% for the period January 1 to May 12, 2024. The decrease in operating ratio is primarily due to the predecessor’s salaries expense including bonuses paid by the seller in connection with the IPO. Excluding successor stock-based compensation and intangible amortization expense, the adjusted operating ratio for the six months ended June 30, 2025 is 97.6%. We are working to achieve synergies across all operating companies, which should reduce the operating ratio over time. See “Non-GAAP Financial Measure” section for the Company’s calculation of operating ratio and adjusted operating ratio.

Current wording

Operating ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue. The Company’s operating ratio decreased to 100.7% in the nine months ended September 30, 2025, compared to 103.5% for the period last year. This decrease can be attributed to the company working to achieve synergies across all operating companies, which reduces the operating ratio over time. See “—Non-GAAP Financial Measures” above for the Company’s calculation of operating ratio and adjusted operating ratio.

Previous wording

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 $5 - $10 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 delivery volume away from subhaulers in favor of company drivers which will require growth in the aggregate fleet.

Current wording

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 $5 - $10 million per year on new 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 delivery volume away from subhaulers in favor of company drivers which will require growth in the aggregate fleet.

Previous wording

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 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.

Current wording

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.

Previous wording

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. As of June 30, 2025, there was $24.5 million outstanding under the Loan Agreement.

Current wording

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. As of September 30, 2025, there was $23.0 million outstanding under the Loan Agreement.

Previous wording

For the six months ended June 30, 2025 (Successor), cash flows from operating activities were $13.2 million, representing a $5.2 million increase compared to the period from January 1 to May 12, 2024 (Predecessor). The increase was primarily driven by adjusted operating net income of $15.3 million, compared to a net loss of $18.3 million in the Predecessor period after considering non-cash adjustments. These improvements were partially offset by increases in working capital, which included decreases in accrued liabilities and a rise in accounts receivable, reflecting operational growth and timing differences.

Current wording

For the nine months ended September 30, 2025, cash flows from operating activities were $25.7 million, representing a $17.9 million increase compared to the period from September 30, 2024. The increase was primarily driven by adjusted operating income of $25.1 million, compared to $13.3 million in the prior period, after accounting for non-cash adjustments. Additionally, we saw a $6.1 million increase in working capital, further contributing to the overall improvement in operating cash flows.