Forward Air Corporation Reports First Quarter 2024 Results

Published

Industry veteran Shawn Stewart appointed as Chief Executive Officer

First quarter results impacted by elongated weak freight market and Omni Logistics deal closing

Cost synergy realization in line with initial diligence estimates

Preliminary April results providing early indication of improvement

GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ:FWRD) (the “Company”, “Forward”, “we”, “our”, or “us”) today reported financial results for the three months ended March 31, 2024 as presented in the tables below on a continuing operations basis (Final Mile is being reported as a discontinued operations).

Recently appointed Chief Executive Officer Shawn Stewart, said, “It is a privilege to be leading Forward during this pivotal time. Together, Forward and Omni have created an industry leader dedicated to delivering world-class service to customers. Forward excels at providing best-in-class premium less-than-truckload service to an attractive and broad customer base, while Omni provides custom supply chain solutions across multiple service modes to domestic and international customers. Together, Forward and Omni, provide customers a seamless partnership and flawless execution for their time-sensitive and mission-critical freight.”

Mr. Stewart continued, “I see tremendous opportunity for the combined entity to maximize value for customers, employees and shareholders. I am committed to aggressively taking action to improve profitability, maximize synergy capture and drive our leadership in global supply chain and domestic transportation services. With the distractions of the deal closing behind us, our team is focused on execution. I look forward to sharing our progress along the next phase of our journey. To that end, we look forward to sharing our full year 2024 guidance and our path to achievement on our second quarter earnings call.”

Rebecca J. Garbrick, Chief Financial Officer, said, “Our first quarter results did not meet our expectations. We continue to face challenging market conditions, characterized by weak freight demand, excess carrier capacity, and pressure on pricing. Omni's first quarter results were more adversely impacted as a result of its exposure to the international freight market. While these conditions led to decreased customer demand for our intermodal, truckload brokerage and Omni lines of business, we saw momentum in our less-than-truckload line of business where we experienced positive volume trends and improved freight quality metrics. In the first quarter, our shipments per day growth was +1.4%, weight per shipment was +7.4%, and revenue per shipment excluding fuel was +0.7% over the same period in the prior year. Unfortunately, this momentum did not offset softer demand for our intermodal and truckload brokerage services, resulting in an 8% decline in revenues and 41% decline in adjusted EBITDA on a continuing operations basis over the same period in the prior year, excluding the results of Omni. From the acquisition date, January 25, 2024, through the end of the quarter, Omni contributed $225 million in revenues and $(5.9) million in adjusted EBITDA.”

Ms. Garbrick continued, “Our first quarter results are not indicative of what we expect for 2024, and we are taking aggressive steps to improve profitability. One early positive indicator is the sequential growth in revenue as reflected in our preliminary April results. From the month of March 2024 to April 2024, we saw sequential revenue growth of 6% as compared to a sequential decline in revenue from March to April of (15%) over the same period in the prior year. We are also successfully executing on the cost synergies associated with the Omni transaction, which are in line with initial diligence estimates. While our first quarter EBITDA was not reflective of run-rate synergies, we expect to see a steady increase in subsequent quarters until synergies are fully realized by the end of 2025.”

 

 

Three Months Ended

(in thousands, except per share data)

 

March 31, 2024

 

March 31, 2023

 

Change

 

Percent Change

Operating revenue

 

$

541,813

 

 

$

357,709

 

 

$

184,104

 

 

51.5%

(Loss) income from operations

 

$

(65,732

)

 

$

47,196

 

 

$

(112,928

)

 

(239.3)%

Operating margin

 

 

(12.1

)%

 

 

13.2

%

 

(2,530) bps

Net (loss) income

 

$

(88,794

)

 

$

33,904

 

 

$

(122,698

)

 

(361.9)%

Net (loss) income per diluted share

 

$

(2.35

)

 

$

1.27

 

 

$

(3.62

)

 

(285.0)%

Cash (used in) provided by operating activities

 

$

(51,719

)

 

$

60,839

 

 

$

(112,558

)

 

(185.0)%

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures: 1

 

 

 

 

 

 

 

 

Adjusted income from operations

 

$

12,534

 

$

47,196

 

 

$

(34,662

)

 

(73.4)%

Adjusted net (loss) income

 

$

(24,172

)

 

$

33,904

 

 

$

(58,076

)

 

(171.3)%

Adjusted net (loss) income per diluted share

 

$

(0.64

)

 

$

1.27

 

 

$

(1.91

)

 

(150.4)%

Adjusted EBITDA

 

$

29,390

 

 

$

59,568

 

 

$

(30,178

)

 

(50.7)%

Free cash flow

 

$

(55,840

)

 

$

56,135

 

 

$

(111,975

)

 

(199.5)%

 

 

 

 

 

 

 

 

 

1 Reconciliation of these non-GAAP financial measures are provided below the financial tables.

Review of Financial Results

Forward Air will hold a conference call to discuss first quarter 2024 results on Thursday, May 9, 2024 at 10:00 a.m. ET. An Earnings Presentation has been posted online on the Investor Relations portion of the Company’s website at ir.forwardaircorp.com, and will be referenced during the conference call. The Company’s conference call will be available online on the Investor Relations portion of the Company’s website at ir.forwardaircorp.com, or by dialing (877) 876-9173, Access Code: FWRDQ124.

A replay of the conference call will be available on the Investor Relations portion of the Company’s website at www.forwardaircorp.com, which we use as a primary mechanism to communicate with our investors. Investors are urged to monitor the Investor Relations portion of the Company’s website to easily find or navigate to current and pertinent information about us.

About Forward Air Corporation

Forward Air is a leading asset-light provider of transportation services across the United States, Canada and Mexico. We provide expedited less-than-truckload (“LTL”) services, including local pick-up and delivery, shipment consolidation/deconsolidation, warehousing, and customs brokerage by utilizing a comprehensive national network of terminals. In addition, we offer truckload brokerage services, including dedicated fleet services; and intermodal, first-and last-mile, high-value drayage services, both to and from seaports and railheads, dedicated contract and Container Freight Station warehouse and handling services. Forward also operates a full portfolio of multimodal solutions, both domestically and internationally, via Omni Logistics. Omni Logistics is a global provider of air, ocean and ground services for mission-critical freight. We are more than a transportation company. Forward is a single resource for your shipping needs. For more information, visit our website at www.forwardaircorp.com.

Forward Air Corporation

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited, in thousands, except per share data)

 

 

 

 

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

Operating revenues:

 

 

 

Expedited Freight

$

273,295

 

 

$

269,577

 

Intermodal

 

56,292

 

 

 

88,169

 

Omni Logistics

 

224,838

 

 

 

 

Eliminations and other operations

 

(12,612

)

 

 

(37

)

Operating revenues

 

541,813

 

 

 

357,709

 

Operating expenses:

 

 

 

Purchased transportation

 

277,015

 

 

 

145,171

 

Salaries, wages and employee benefits

 

128,867

 

 

 

66,647

 

Operating leases

 

38,803

 

 

 

24,073

 

Depreciation and amortization

 

31,786

 

 

 

12,372

 

Insurance and claims

 

12,881

 

 

 

13,258

 

Fuel expense

 

5,246

 

 

 

5,686

 

Other operating expenses

 

112,947

 

 

 

43,306

 

Impairment of goodwill, intangibles and other assets

 

 

 

 

 

Total operating expenses

 

607,545

 

 

 

310,513

 

Income (loss) from continuing operations:

 

 

 

Expedited Freight

 

19,498

 

 

 

29,685

 

Intermodal

 

3,586

 

 

 

11,203

 

Omni Logistics

 

(28,585

)

 

 

 

Other Operations

 

(60,231

)

 

 

6,308

 

(Loss) income from continuing operations

 

(65,732

)

 

 

47,196

 

Other expense:

 

 

 

Interest expense, net

 

(40,753

)

 

 

(2,355

)

Foreign exchange loss

 

(668

)

 

 

 

Other income, net

 

9

 

 

 

 

Total other expense

 

(41,412

)

 

 

(2,355

)

(Loss) income before income taxes

 

(107,144

)

 

 

44,841

 

Income tax expense

 

(18,350

)

 

 

10,937

 

Net (loss) income from continuing operations

 

(88,794

)

 

 

33,904

 

Income from discontinued operation, net of tax

 

 

 

 

2,464

 

Net (loss) income

 

(88,794

)

 

 

36,368

 

Net loss attributable to Non-controlling interest

 

(27,082

)

 

 

 

Net (loss) income attributable to Forward Air

$

(61,712

)

 

$

36,368

 

 

 

 

 

Net income per common share:

 

 

 

Basic net (loss) income per share

 

 

 

Continuing operations

$

(2.35

)

 

$

1.28

 

Discontinued operation

 

 

 

 

0.09

 

Basic

$

(2.35

)

 

$

1.37

 

 

 

 

 

Diluted net (loss) income per share

 

 

 

Continuing operations

$

(2.35

)

 

$

1.27

 

Discontinued operation

 

 

 

 

0.09

 

Diluted

$

(2.35

)

 

$

1.37

 

 

 

 

 

Dividends per share:

$

 

 

$

0.24

 

 

 

 

 

Net (loss) income

$

(88,794

)

 

$

36,368

 

Other comprehensive (loss) income:

 

 

 

Foreign currency translation adjustments

 

(151

)

 

 

 

Comprehensive (loss) income

$

(88,945

)

 

$

36,368

 

Expedited Freight Segment Information

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

March 31, 2024

 

Percent of Revenue

 

March 31, 2023

 

Percent of Revenue

 

Change

 

Percent Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

Network 1

$

214,493

 

78.5

%

 

$

205,931

 

76.4

%

 

$

8,562

 

 

4.2

%

Truckload

 

37,055

 

13.6

 

 

 

41,744

 

15.5

 

 

 

(4,689

)

 

(11.2

)

Other

 

21,747

 

8.0

 

 

 

21,902

 

8.1

 

 

 

(155

)

 

(0.7

)

Total operating revenues

 

273,295

 

100.0

 

 

 

269,577

 

100.0

 

 

 

3,718

 

 

1.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

127,760

 

46.7

 

 

 

125,194

 

46.4

 

 

 

2,566

 

 

2.0

 

Salaries, wages and employee benefits

 

62,553

 

22.9

 

 

 

55,918

 

20.7

 

 

 

6,635

 

 

11.9

 

Operating leases

 

14,982

 

5.5

 

 

 

15,738

 

5.8

 

 

 

(756

)

 

(4.8

)

Depreciation and amortization

 

10,290

 

3.8

 

 

 

7,626

 

2.8

 

 

 

2,664

 

 

34.9

 

Insurance and claims

 

10,652

 

3.9

 

 

 

9,219

 

3.4

 

 

 

1,433

 

 

15.5

 

Fuel expense

 

2,581

 

0.9

 

 

 

2,513

 

0.9

 

 

 

68

 

 

2.7

 

Other operating expenses

 

24,979

 

9.1

 

 

 

23,684

 

8.8

 

 

 

1,295

 

 

5.5

 

Total operating expenses

 

253,797

 

92.9

 

 

 

239,892

 

89.0

 

 

 

13,905

 

 

5.8

 

Income from operations

$

19,498

 

7.1

%

 

$

29,685

 

11.0

%

 

$

(10,187

)

 

(34.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue.

Expedited Freight Operating Statistics

 

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

 

Percent Change

 

 

 

 

 

 

Business days

 

64

 

 

64

 

%

 

 

 

 

 

 

Tonnage 1,2

 

 

 

 

 

Total pounds

 

684,995

 

 

629,080

 

8.9

 

Pounds per day

 

10,703

 

 

9,829

 

8.9

 

 

 

 

 

 

 

Shipments 1,2

 

 

 

 

 

Total shipments

 

828

 

 

817

 

1.4

 

Shipments per day

 

12.9

 

 

12.8

 

1.4

 

 

 

 

 

 

 

Weight per shipment

 

827

 

 

770

 

7.4

 

 

 

 

 

 

 

Revenue per hundredweight 3

$

31.32

 

$

33.36

 

(6.1

)

Revenue per hundredweight, ex fuel 3

$

24.15

 

$

25.75

 

(6.2

)

 

 

 

 

 

 

Revenue per shipment 3

$

259.14

 

$

256.89

 

0.9

 

Revenue per shipment, ex fuel 3

$

199.78

 

$

198.30

 

0.7

 

 

 

 

 

 

 

1 In thousands

2 Excludes accessorial and Truckload and products

3 Includes intercompany revenue between the Network and Truckload revenue streams

Intermodal Segment Information

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

March 31, 2024

 

Percent of Revenue

 

March 31, 2023

 

Percent of Revenue

 

Change

 

Percent Change

Operating revenue

$

56,292

 

100.0

%

 

$

88,169

 

100.0

%

 

$

(31,877

)

 

(36.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

17,443

 

31.0

 

 

 

20,014

 

22.7

 

 

 

(2,571

)

 

(12.8

)

Salaries, wages and employee benefits

 

15,082

 

26.8

 

 

 

18,914

 

21.5

 

 

 

(3,832

)

 

(20.3

)

Operating leases

 

4,692

 

8.3

 

 

 

8,335

 

9.5

 

 

 

(3,643

)

 

(43.7

)

Depreciation and amortization

 

4,627

 

8.2

 

 

 

4,746

 

5.4

 

 

 

(119

)

 

(2.5

)

Insurance and claims

 

2,606

 

4.6

 

 

 

2,349

 

2.7

 

 

 

257

 

 

10.9

 

Fuel expense

 

2,361

 

4.2

 

 

 

3,173

 

3.6

 

 

 

(812

)

 

(25.6

)

Other operating expenses

 

5,895

 

10.5

 

 

 

19,435

 

22.0

 

 

 

(13,540

)

 

(69.7

)

Total operating expenses

 

52,706

 

93.6

 

 

 

76,966

 

87.3

 

 

 

(24,260

)

 

(31.5

)

Income from operations

$

3,586

 

6.4

%

 

$

11,203

 

12.7

%

 

$

(7,617

)

 

(68.0

)%

Intermodal Operating Statistics

 

 

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

 

Percent Change

Drayage shipments

 

62,659

 

 

72,465

 

(13.5)%

Drayage revenue per shipment

$

822

 

$

1,136

 

(27.6)%

Omni Logistics Segment Information

(In thousands)

(Unaudited)

 

 

 

 

 

Three Months Ended

 

March 31, 2024

 

Percent of Revenue

Operating revenue

$

224,838

 

 

100.0

%

 

 

 

 

Operating expenses:

 

 

 

Purchased transportation

 

144,424

 

 

64.2

 

Salaries, wages and employee benefits

 

48,775

 

 

21.7

 

Operating leases

 

19,127

 

 

8.5

 

Depreciation and amortization

 

16,869

 

 

7.5

 

Insurance and claims

 

2,053

 

 

0.9

 

Fuel expense

 

304

 

 

0.1

 

Other operating expenses

 

21,871

 

 

9.7

 

Total operating expenses

 

253,423

 

 

112.7

 

Loss from operations

$

(28,585

)

 

(12.7

)%

Forward Air Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

March 31, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

172,270

 

 

$

121,969

 

Restricted cash equivalents

 

 

 

 

39,604

 

Accounts receivable, net

 

351,813

 

 

 

153,267

 

Other receivables

 

1,539

 

 

 

5,408

 

Prepaid expenses

 

39,512

 

 

 

25,682

 

Other current assets

 

4,299

 

 

 

1,098

 

Total current assets

 

569,433

 

 

 

347,028

 

 

 

 

 

Noncurrent restricted cash equivalents

 

 

 

 

1,790,500

 

Property and equipment

 

591,562

 

 

 

508,280

 

Less accumulated depreciation and amortization

 

263,856

 

 

 

250,185

 

Property and equipment, net

 

327,706

 

 

 

258,095

 

Operating lease right-of-use assets

 

334,262

 

 

 

111,552

 

Goodwill

 

1,379,180

 

 

 

278,706

 

Other acquired intangibles, net

 

1,264,428

 

 

 

134,789

 

Other assets

 

84,251

 

 

 

58,863

 

Total assets

$

3,959,260

 

 

$

2,979,533

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

130,646

 

 

$

45,430

 

Accrued expenses

 

118,955

 

 

 

62,948

 

Other current liabilities

 

73,461

 

 

 

71,727

 

Current portion of debt and finance lease obligations

 

28,134

 

 

 

12,645

 

Current portion of operating lease liabilities

 

93,645

 

 

 

44,344

 

Total current liabilities

 

444,841

 

 

 

237,094

 

 

 

 

 

Finance lease obligations, less current portion

 

34,306

 

 

 

26,736

 

Long-term debt, less current portion

 

1,664,107

 

 

 

 

Long-term debt held in escrow

 

 

 

 

1,790,500

 

Operating lease liabilities, less current portion

 

246,956

 

 

 

71,598

 

Liabilities under tax receivable agreement

 

13,270

 

 

 

 

Other long-term liabilities

 

45,536

 

 

 

47,144

 

Deferred income taxes

 

177,806

 

 

 

42,200

 

 

 

 

 

Shareholders’ equity:

 

 

 

Preferred stock

 

 

 

 

 

Common stock

 

265

 

 

 

257

 

Additional paid-in capital

 

508,675

 

 

 

283,684

 

Retained earnings

 

417,282

 

 

 

480,320

 

Accumulated other comprehensive loss

 

(151

)

 

 

 

Total shareholders’ equity attributable to Forward Air

 

926,071

 

 

 

764,261

 

Noncontrolling interest

 

406,367

 

 

 

 

Total shareholders’ equity

 

1,332,438

 

 

 

764,261

 

Total liabilities and shareholders’ equity

$

3,959,260

 

 

$

2,979,533

Forward Air Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Three Months Ended

 

March 31, 2024

 

March 31, 2023

Operating activities:

 

 

 

Net (loss) income from continuing operations

$

(88,794

)

 

$

33,904

 

Adjustments to reconcile net (loss) income of continuing operations to net cash (used in) provided by operating activities of continuing operations

 

 

 

Depreciation and amortization

 

31,786

 

 

 

12,372

 

Share-based compensation expense

 

1,567

 

 

 

2,906

 

Provision for revenue adjustments

 

1,038

 

 

 

1,098

 

Deferred income tax expense

 

2,945

 

 

 

1,857

 

Other

 

4,169

 

 

 

(1,091

)

Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:

 

 

 

Accounts receivable

 

(20,495

)

 

 

16,397

 

Other receivables

 

5,367

 

 

 

 

Other current and noncurrent assets

 

(7,104

)

 

 

10,910

 

Accounts payable and accrued expenses

 

17,802

 

 

 

(17,514

)

Net cash (used in) provided by operating activities of continuing operations

 

(51,719

)

 

 

60,839

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale of property and equipment

 

849

 

 

 

1,815

 

Purchases of property and equipment

 

(4,970

)

 

 

(6,519

)

Purchases of a business, net of cash acquired

 

(1,565,242

)

 

 

(56,567

)

Other

 

(89

)

 

 

 

Net cash used in investing activities of continuing operations

 

(1,569,452

)

 

 

(61,271

)

 

 

 

 

Financing activities:

 

 

 

Repayments of finance lease obligations

 

(4,560

)

 

 

(2,086

)

Proceeds from credit facility

 

 

 

 

45,000

 

Payments on credit facility

 

(80,000

)

 

 

 

Payment of debt issuance costs

 

(60,591

)

 

 

 

Payment of earn-out liability

 

(12,247

)

 

 

 

Payments of dividends to shareholders

 

 

 

 

(6,345

)

Repurchases and retirement of common stock

 

 

 

 

(54,783

)

Payment of minimum tax withholdings on share-based awards

 

(1,328

)

 

 

 

Contributions from subsidiary held for sale

 

 

 

 

4,852

 

Net cash used in financing activities of continuing operations

 

(158,726

)

 

 

(13,362

)

Effect of exchange rate changes on cash

 

94

 

 

 

 

Net decrease in cash and cash equivalents from continuing operations

 

(1,779,803

)

 

 

(13,794

)

 

 

 

 

Cash from discontinued operation:

 

 

 

Net cash provided by operating activities of discontinued operation

 

 

 

 

5,154

 

Net cash used in investing activities of discontinued operation

 

 

 

 

(270

)

Net cash used in financing activities of discontinued operation

 

 

 

 

(4,884

)

Net decrease in cash and cash equivalents

 

(1,779,803

)

 

 

(13,794

)

Cash and cash equivalents at beginning of period of continuing operations

 

1,952,073

 

 

 

45,822

 

Cash at beginning of period of discontinued operation

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(1,779,803

)

 

 

(13,794

)

Less: cash at end of period of discontinued operation

 

 

 

 

 

Cash and cash equivalents at end of period of continuing operations

$

172,270

 

 

$

32,028

 

Forward Air Corporation Reconciliation of Non-GAAP Financial Measures

In this press release, the Company uses non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with GAAP. The Company believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions as well as evaluating the Company’s performance.

For the three months ended March 31, 2024 and 2023, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, free cash flow, adjusted income from continuing operations, adjusted net income, and adjusted net income per diluted share. All non-GAAP financial measures are presented on a continuing operations basis.

The Company believes that EBITDA improves comparability from period to period by removing the impact of its capital structure (interest and financing expenses), asset base (depreciation and amortization) and tax impacts. The Company believes that free cash flow is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance shareholder value. The Company believes providing adjusted EBITDA, adjusted income from operations, adjusted net income and adjusted net income per diluted share allows investors to compare Company performance consistently over various periods without regard to the impact of unusual, nonrecurring or nonoperational items.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s financial results prepared in accordance with GAAP. Non-GAAP financial information does not represent a comprehensive basis of accounting. As required by the Securities and Exchange Act of 1933 and the rules and regulations promulgated thereunder, the Company has included, for the periods indicated, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure.

The following is a reconciliation of net income to EBITDA for the three months ended March 31, 2024 and 2023 (in thousands):

 

 

Three Months Ended

 

 

March 31, 2024

 

March 31, 2023

Net (loss) income

 

$

(88,794

)

 

$

33,904

 

Interest expense

 

 

40,753

 

 

 

2,355

 

Income tax (benefit) expense

 

 

(18,350

)

 

 

10,937

 

Depreciation and amortization

 

 

31,786

 

 

 

12,372

 

Reported EBITDA

 

 

(34,605

)

 

 

59,568

 

Transaction and integration costs

 

 

58,226

 

 

 

 

Severance costs

 

 

5,769

 

 

 

 

Adjusted EBITDA

 

$

29,390

 

 

$

59,568

The following is a reconciliation of the change in operating revenues and adjusted EBITDA excluding the impact of Omni Logistics for the three months ended March 31, 2024 and 2023 (in thousands):

Forward Air Corporation (excluding Omni Logistics)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

March 31, 2024

 

March 31, 2023

 

Change

 

Percent Change

Operating revenue

$

329,565

 

 

$

357,709

 

$

(28,144

)

 

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated EBITDA

$

(34,605

)

 

$

59,568

 

 

 

 

Omni Logistics - Income from Operations

 

28,585

 

 

 

 

 

 

 

Omni Logistics - Depreciation and Amortization

 

(16,869

)

 

 

 

 

 

 

Reported EBITDA

 

(22,889

)

 

 

59,568

 

 

 

 

Transaction and integration costs

 

58,226

 

 

 

 

 

 

 

Adjusted EBITDA

$

35,337

 

 

$

59,568

 

 

(24,231

)

 

(41

)%

The following is a reconciliation of net cash provided by operating activities to free cash flow for the three months ended March 31, 2024 and 2023 (in thousands):

 

 

Three Months Ended

 

 

March 31, 2024

 

March 31, 2023

Net cash (used in) provided by operating activities of continuing operations

 

$

(51,719

)

 

$

60,839

 

Proceeds from sale of property and equipment

 

 

849

 

 

 

1,815

 

Purchases of property and equipment

 

 

(4,970

)

 

 

(6,519

)

Free cash flow

 

$

(55,840

)

 

$

56,135

 

The following is a reconciliation of reported income from operations, net income, and net income per diluted share to adjusted income from operations, net income, and net income per diluted share for the three months ended March 31, 2024 and 2023 (in thousands, except net income per diluted share):

 

 

Three Months Ended March 31, 2024

 

Three Months Ended March 31, 2023

 

 

Loss From Operations

 

Net Loss1

 

Net Loss Per Diluted Share1

 

Income From Operations

 

Net Income

 

Net Income Per Diluted Share

As Reported

 

$

(65,732

)

 

$

(88,794

)

 

$

(2.35

)

 

$

47,196

 

 

$

33,904

 

 

$

1.27

 

Transaction and integration costs

 

 

58,226

 

 

 

48,076

 

 

 

1.27

 

 

 

 

 

 

 

 

 

 

Severance

 

 

5,769

 

 

 

4,763

 

 

 

0.13

 

 

 

 

 

 

 

 

 

 

Acquisition amortization

14,271

11,783

0.31

 

As Adjusted

 

$

12,534

 

$

(24,172

)

 

$

(0.64

)

 

$

47,196

 

$

33,904

 

$

1.27

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Net loss and net loss per diluted share amounts are based on the after-tax effect of each item. The income tax effect is calculated by applying the effective tax rate to the pre-tax amount. The total tax benefit effect of the above item is $13,643.

Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements included in this press release relate to the Company’s (i) ability to provide excellent service to its customers for their time-sensitive and mission-critical freight; (ii) ability to maximize value for customers, employees and shareholders and ability to be a leader in the global supply chain and domestic transportation services; (iii) ability and expectations regarding improved profitability; (iv) ability to achieve the intended benefits of the acquisition of Omni Logistics, including the timing of recognizing these potential revenue and cost synergies; (v) expectations regarding the Company’s ability to execute on its plan to integrate Omni Logistics in order to generate long-term value for shareholders and (vi) expectations regarding future market conditions as well as expectations regarding customer demand for the Company’s services.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, the Company’s ability to achieve the expected strategic, financial and other benefits of the acquisition of Omni Logistics, including the realization and timing of expected synergies and the achievement of deleveraging targets within the expected timeframes or at all, the risk that the businesses will not be integrated successfully or that integration may be more difficult, time-consuming or costly than expected, the risk that operating costs, customer loss, management and employee retention and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) as a result of the acquisition of Omni Logistics may be greater than expected, continued weakening of the freight environment, future debt and financing levels, our ability to deleverage, including, without limitation, through capital allocation or divestitures of non-core businesses, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party carriers needed to serve our customers’ transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, changes in fuel prices, loss of a major customer, increasing competition, and pricing pressure, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2023, and as may be identified in our subsequent Current Reports on Form 8-K.

We caution readers that any forward-looking statement made by us in this press release is based only on information currently available to us and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion as of the date on which it is made. We undertake no obligation to publicly update any forward- looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise unless required by law. developments or otherwise unless required by law.

Forward Air Corporation Justin Moss, 404-362-8933 jmoss@forwardair.com

Source: Forward Air Corporation

In This Story

FWRD