FWRD Forward Air Corporation

Focus pivoting from completing Omni integration and capturing cost synergies to global transformation

Stronger cash flow from operations led to increase in liquidity

Announces addition of new Chief Commercial Officer

Forward Air Corporation (NASDAQ:FWRD) (the “Company”, “we”, “our”, or “us”) today reported financial results for the three months ended September 30, 2024, as presented in the tables below on a continuing operations basis, with the Company’s former Final Mile business being reported as discontinued operations.

“Our team continues to focus on harnessing the power of the combined legacy Forward and Omni companies as we begin the transition from integration to transformation and remain on schedule to capture the previously identified $75 million of synergies by end of the first quarter of 2025,” said Shawn Stewart, Chief Executive Officer. “We also recently enhanced our operations by opening a new certified container freight station in Miami, enabling us to offer direct air and ocean import and export services in and out of South and Central America. Our new breath of end-to-end services has also led to several collective wins since closing the acquisition.

“Beyond the near-term synergy and sales wins, we are beginning to transform for longer-term success; a company that shares a common fabric and a common customer-first DNA. Going forward we will be working to collaborate across legacy entities, eliminate previously unidentified redundancies, automate and digitize repetitive processes and unifying under a new brand with a common goal and mission. Transforming a company of this size, complexity and geographic diversity is not an event and will take time, but I am confident in our strategy.

“Part of that strategy is strengthening our team with industry leading talent. To that end, I am excited to announce that we have hired a new Chief Commercial Officer who is slated to join us in January. He has over 20 years of experience in global logistics and is well prepared to collaborate with our customers. I am excited about his industry expertise and ability to hit the ground running in the first quarter of next year.

“Looking ahead, it is difficult to forecast the next freight cycle, but we remain focused on actively integrating and transforming the Company so we can be prepared to capitalize on the market upturn as a comprehensive vertical global logistics company with ground, air, ocean, contract logistics and customers brokerage services,” concluded Stewart.

Jamie Pierson, Chief Financial Officer added, “For the third quarter of 2024, we reported revenue of $656 million and operating income of $23 million. On a segment basis, Omni Logistics continued to improve and sequentially grew revenue and operating income. However, the Expedited Freight segment did not perform up to our expectations due largely to a decrease in year-over-year revenue per hundredweight, excluding fuel surcharge, which was primarily attributable to customer mix and the associated pricing. Revenue at the Intermodal segment was down but tight cost management strategies kept operating income essentially flat year-over-year.

“For the third quarter, Consolidated EBITDA ("Consolidated EBITDA"), a non-GAAP measure calculated pursuant to our Senior Secured Term Loan Credit Agreement (the "Credit Agreement"), was $77 million compared to $81 million last quarter showing resilience and stability in the face of a challenging macro environment. For the twelve months ending September 30, 2024, Consolidated EBITDA was $307 million which resulted in an approximate $32 million cushion under the Credit Agreement’s consolidated first lien net leverage ratio covenant.

“On the heels of robust operating cash flow, we ended the third quarter in a stronger liquidity position as cash increased $33 million from the previous quarter and liquidity increased $15 million to $460 million. With the third quarter behind us, we expect 2024 Consolidated EBITDA guidance to $300 to $310 million, which reflects our expectation of continued softness in the overall macro environment.” noted Pierson.

 

 

Three Months Ended

(in thousands, except per share data)

 

September 30, 2024

 

September 30, 2023

 

Change

 

Percent Change

Operating revenue

 

$

655,937

 

 

$

340,976

 

 

$

314,961

 

 

92.4

%

(Loss) income from operations

 

$

22,697

 

 

$

11,689

 

 

$

11,008

 

 

94.2

%

Operating margin

 

 

3.5

%

 

 

3.4

%

 

10 bps

Net (loss) income

 

$

(34,198

)

 

$

6,493

 

 

$

(40,691

)

 

(626.7

)%

Net (loss) income per diluted share

 

$

(2.62

)

 

$

0.25

 

 

$

(2.87

)

 

(1,148.0

)%

Cash (used in) provided by operating activities

 

$

52,597

 

 

$

24,666

 

 

$

27,931

 

 

113.2

%

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures: 1

 

 

 

 

 

 

 

 

Consolidated EBITDA

 

$

76,997

 

 

$

92,714

 

 

$

(15,717

)

 

(17.0

)%

 

 

 

 

 

 

 

 

 

Free cash flow

 

$

43,270

 

 

$

19,526

 

 

$

23,744

 

 

121.6

%

 

 

 

 

 

 

 

 

 

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 third quarter 2024 results on Monday, November 4, 2024 at 4:30 p.m. ET. 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 (800) 225-9448, Access Code: FWRDQ324.

A replay of the conference call will be available on the Investor Relations portion of the Company’s website at ir.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 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

 

Nine Months Ended

 

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Operating revenues:

 

 

 

 

 

 

 

Expedited Freight

$

284,707

 

 

$

278,875

 

 

$

849,284

 

 

$

817,888

 

Intermodal

 

57,412

 

 

 

62,183

 

 

 

173,003

 

 

 

214,603

 

Omni Logistics

 

334,538

 

 

 

—

 

 

 

871,232

 

 

 

—

 

Eliminations and other operations

 

(20,720

)

 

 

(82

)

 

 

(52,103

)

 

 

(184

)

Operating revenues

 

655,937

 

 

 

340,976

 

 

 

1,841,416

 

 

 

1,032,307

 

Operating expenses:

 

 

 

 

 

 

 

Purchased transportation

 

332,469

 

 

 

148,706

 

 

 

931,072

 

 

 

435,844

 

Salaries, wages and employee benefits

 

133,516

 

 

 

75,373

 

 

 

406,382

 

 

 

215,983

 

Operating leases

 

48,810

 

 

 

19,536

 

 

 

133,871

 

 

 

66,505

 

Depreciation and amortization

 

25,893

 

 

 

14,209

 

 

 

106,321

 

 

 

39,826

 

Insurance and claims

 

17,382

 

 

 

12,969

 

 

 

44,961

 

 

 

38,988

 

Fuel expense

 

4,855

 

 

 

5,845

 

 

 

15,960

 

 

 

16,733

 

Other operating expenses

 

55,564

 

 

 

52,649

 

 

 

234,175

 

 

 

133,218

 

Impairment of goodwill

 

14,751

 

 

 

—

 

 

 

1,107,465

 

 

 

—

 

Total operating expenses

 

633,240

 

 

 

329,287

 

 

 

2,980,207

 

 

 

947,097

 

Income (loss) from continuing operations:

 

 

 

 

 

 

 

Expedited Freight

 

19,269

 

 

 

32,547

 

 

 

60,713

 

 

 

89,295

 

Intermodal

 

4,091

 

 

 

4,744

 

 

 

12,994

 

 

 

20,259

 

Omni Logistics

 

1,136

 

 

 

—

 

 

 

(1,133,323

)

 

 

—

 

Other Operations

 

(1,799

)

 

 

(25,602

)

 

 

(79,175

)

 

 

(24,344

)

Income from continuing operations

 

22,697

 

 

 

11,689

 

 

 

(1,138,791

)

 

 

85,210

 

Other expense:

 

 

 

 

 

 

 

Interest expense, net

 

(52,770

)

 

 

(2,655

)

 

 

(140,788

)

 

 

(7,595

)

Foreign exchange (loss) gain

 

(2,812

)

 

 

—

 

 

 

(1,912

)

 

 

—

 

Other income (expense), net

 

(11

)

 

 

—

 

 

 

38

 

 

 

—

 

Total other expense

 

(55,593

)

 

 

(2,655

)

 

 

(142,662

)

 

 

(7,595

)

(Loss) income before income taxes

 

(32,896

)

 

 

9,034

 

 

 

(1,281,453

)

 

 

77,615

 

Income tax (benefit) expense

 

1,302

 

 

 

2,541

 

 

 

(191,990

)

 

 

20,091

 

Net (loss) income from continuing operations

 

(34,198

)

 

 

6,493

 

 

 

(1,089,463

)

 

 

57,524

 

(Loss) income from discontinued operation, net of tax

 

(1,137

)

 

 

2,795

 

 

 

(6,013

)

 

 

8,083

 

Net (loss) income

 

(35,335

)

 

 

9,288

 

 

$

(1,095,476

)

 

$

65,607

 

Net income (loss) attributable to noncontrolling interest

 

38,073

 

 

 

—

 

 

 

(314,923

)

 

 

—

 

Net (loss) income attributable to Forward Air

$

(73,408

)

 

$

9,288

 

 

$

(780,553

)

 

$

65,607

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

Basic net (loss) income per share

 

 

 

 

 

 

 

Continuing operations

$

(2.62

)

 

$

0.25

 

 

$

(27.98

)

 

$

2.20

 

Discontinued operation

 

(0.04

)

 

 

0.11

 

 

 

(0.22

)

 

 

0.31

 

Basic

$

(2.66

)

 

$

0.36

 

 

$

(28.20

)

 

$

2.51

 

 

 

 

 

 

 

 

 

Diluted net (loss) income per share

 

 

 

 

 

 

 

Continuing operations

$

(2.62

)

 

$

0.25

 

 

$

(27.98

)

 

$

2.19

 

Discontinued operation

 

(0.04

)

 

 

0.11

 

 

 

(0.22

)

 

 

0.31

 

Diluted

$

(2.66

)

 

$

0.36

 

 

$

(28.20

)

 

$

2.50

 

 

 

 

 

 

 

 

 

Dividends per share:

$

—

 

 

$

0.24

 

 

$

—

 

 

$

0.72

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(35,335

)

 

$

9,288

 

 

$

(1,095,476

)

 

$

65,607

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

176

 

 

 

—

 

 

 

(824

)

 

 

—

 

Comprehensive (loss) income

$

(35,159

)

 

$

9,288

 

 

$

(1,094,652

)

 

$

65,607

 

     

Expedited Freight Segment Information

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

September 30, 2024

 

Percent of Revenue

 

September 30, 2023

 

Percent of Revenue

 

Change

 

Percent Change

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

Network 1

$

217,289

 

76.3

%

 

$

216,977

 

77.8

%

 

$

312

 

 

0.1

%

Truckload

 

43,635

 

15.3

 

 

 

38,800

 

13.9

 

 

 

4,835

 

 

12.5

 

Other

 

23,783

 

8.4

 

 

 

23,098

 

8.3

 

 

 

685

 

 

3.0

 

Total operating revenues

 

284,707

 

100.0

 

 

 

278,875

 

100.0

 

 

 

5,832

 

 

2.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

140,035

 

49.2

 

 

 

129,850

 

46.6

 

 

 

10,185

 

 

7.8

 

Salaries, wages and employee benefits

 

59,426

 

20.9

 

 

 

56,682

 

20.3

 

 

 

2,744

 

 

4.8

 

Operating leases

 

15,556

 

5.5

 

 

 

14,392

 

5.2

 

 

 

1,164

 

 

8.1

 

Depreciation and amortization

 

10,481

 

3.7

 

 

 

9,022

 

3.2

 

 

 

1,459

 

 

16.2

 

Insurance and claims

 

11,672

 

4.1

 

 

 

9,533

 

3.4

 

 

 

2,139

 

 

22.4

 

Fuel expense

 

2,113

 

0.7

 

 

 

2,954

 

1.1

 

 

 

(841

)

 

(28.5

)

Other operating expenses

 

26,155

 

9.1

 

 

 

23,895

 

8.5

 

 

 

2,260

 

 

9.5

 

Total operating expenses

 

265,438

 

93.2

 

 

 

246,328

 

88.3

 

 

 

19,110

 

 

7.8

 

Income from operations

$

19,269

 

6.8

%

 

$

32,547

 

11.7

%

 

$

(13,278

)

 

(40.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

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

 

September 30, 2024

 

September 30, 2023

 

Percent Change

 

 

 

 

 

 

Business days

64

 

63

 

1.6 %

 

 

 

 

 

 

Tonnage 1,2

 

 

 

 

 

Total pounds

713,212

 

685,756

 

4.0

Pounds per day

11,144

 

10,885

 

2.4

 

 

 

 

 

 

Shipments 1,2

 

 

 

 

 

Total shipments

831

 

835

 

(0.5)

Shipments per day

13.0

 

13.3

 

(2.3)

 

 

 

 

 

 

Weight per shipment

858

 

821

 

4.5

 

 

 

 

 

 

Revenue per hundredweight 3

$ 30.47

 

$ 31.66

 

(3.8)

Revenue per hundredweight, ex fuel 3

$ 24.09

 

$ 24.20

 

(0.5)

 

 

 

 

 

 

Revenue per shipment 3

$ 261.55

 

$ 259.94

 

0.6

Revenue per shipment, ex fuel 3

$ 206.73

 

$ 198.71

 

4.0

 

 

 

 

 

 

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

 

September 30, 2024

 

Percent of Revenue

 

September 30, 2023

 

Percent of Revenue

 

Change

 

Percent Change

Operating revenue

$ 57,412

 

100.0 %

 

$ 62,183

 

100.0 %

 

$ (4,771)

 

(7.7) %

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

18,300

 

31.9

 

18,945

 

30.5

 

(645)

 

(3.4)

Salaries, wages and employee benefits

14,506

 

25.3

 

16,118

 

25.9

 

(1,612)

 

(10.0)

Operating leases

5,668

 

9.9

 

5,144

 

8.3

 

524

 

10.2

Depreciation and amortization

4,582

 

8.0

 

5,187

 

8.3

 

(605)

 

(11.7)

Insurance and claims

2,528

 

4.4

 

2,758

 

4.4

 

(230)

 

(8.3)

Fuel expense

1,942

 

3.4

 

2,892

 

4.7

 

(950)

 

(32.8)

Other operating expenses

5,795

 

10.0

 

6,395

 

10.3

 

(600)

 

(9.4)

Total operating expenses

53,321

 

92.9

 

57,439

 

92.4

 

(4,118)

 

(7.2)

Income from operations

$ 4,091

 

7.1 %

 

$ 4,744

 

7.6 %

 

$ (653)

 

(13.8) %

 

 

 

 

 

 

 

 

 

 

 

 

     

Intermodal Operating Statistics

 

 

 

Three Months Ended

 

September 30, 2024

 

September 30, 2023

 

Percent Change

Drayage shipments

62,616

 

68,576

 

(8.7) %

Drayage revenue per shipment

$ 824

 

$ 823

 

0.1 %

     

Omni Logistics Segment Information

(In thousands)

(Unaudited)

 

 

 

 

 

Three Months Ended

 

September 30, 2024

 

Percent of Revenue

Operating revenue

$ 334,538

 

100.0 %

 

 

 

 

Operating expenses:

 

 

 

Purchased transportation

194,853

 

58.2

Salaries, wages and employee benefits

55,151

 

16.5

Operating leases

27,586

 

8.2

Depreciation and amortization

10,830

 

3.2

Insurance and claims

3,488

 

1.0

Fuel expense

800

 

0.2

Other operating expenses

25,943

 

7.8

Impairment of goodwill

14,751

 

4.4

Total operating expenses

333,402

 

99.7

Income from operations

$ 1,136

 

0.3 %

 

 

 

 

     

Forward Air Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

September 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$ 136,616

 

$ 121,969

Restricted cash and restricted cash equivalents

1,540

 

39,604

Accounts receivable, net

361,003

 

153,267

Other receivables

1,695

 

5,408

Prepaid expenses

31,174

 

25,682

Other current assets

13,053

 

1,098

Total current assets

545,081

 

347,028

 

 

 

 

Noncurrent restricted cash equivalents

—

 

1,790,500

Property and equipment

606,418

 

508,280

Less accumulated depreciation and amortization

281,636

 

250,185

Property and equipment, net

324,782

 

258,095

Operating lease right-of-use assets

355,139

 

111,552

Goodwill

716,071

 

278,706

Other acquired intangibles, net

1,033,352

 

134,789

Other assets

81,415

 

58,863

Total assets

$ 3,055,840

 

$ 2,979,533

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$ 157,230

 

$ 45,430

Accrued expenses

135,590

 

62,948

Other current liabilities

49,571

 

71,727

Current portion of debt and finance lease obligations

16,741

 

12,645

Current portion of operating lease liabilities

89,566

 

44,344

Total current liabilities

448,698

 

237,094

 

 

 

 

Finance lease obligations, less current portion

32,731

 

26,736

Long-term debt, less current portion

1,673,292

 

—

Long-term debt held in escrow

—

 

1,790,500

Operating lease liabilities, less current portion

275,843

 

71,598

Liabilities under tax receivable agreement

36,797

 

—

Other long-term liabilities

42,423

 

47,144

Deferred income taxes

209,522

 

42,200

 

 

 

 

Shareholders' equity:

 

 

 

Preferred stock

—

 

—

Common stock

287

 

257

Additional paid-in capital

528,255

 

283,684

Retained (deficit) earnings

(301,634)

 

480,320

Accumulated other comprehensive loss

(824)

 

—

Total Forward Air shareholders' equity

226,084

 

764,261

Noncontrolling interest

110,450

 

—

Total shareholders' equity

336,534

 

764,261

Total liabilities and shareholders' equity

$ 3,055,840

 

$ 2,979,533

     

Forward Air Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Three Months Ended

 

September 30, 2024

 

September 30, 2023

Operating activities:

 

 

 

Net (loss) income from continuing operations

$ (34,198)

 

$ 6,493

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

 

 

 

Depreciation and amortization

25,893

 

14,209

Impairment of goodwill

14,751

 

—

Share-based compensation expense

2,901

 

2,774

Provision for revenue adjustments

602

 

1,214

Deferred income tax (benefit) expense

(33,552)

 

17

Other

(730)

 

688

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

 

 

 

Accounts receivable

8,215

 

(17,723)

Other receivables

628

 

—

Other current and noncurrent assets

38,422

 

(7,000)

Accounts payable and accrued expenses

29,665

 

23,994

Net cash provided by operating activities of continuing operations

52,597

 

24,666

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale of property and equipment

1,087

 

104

Purchases of property and equipment

(10,414)

 

(5,244)

Other

(145)

 

—

Net cash used in investing activities of continuing operations

(9,472)

 

(5,140)

 

 

 

 

Financing activities:

 

 

 

Repayments of finance lease obligations

(6,212)

 

(2,917)

Payments on credit facility

—

 

(375)

Payment of debt issuance costs

(1,443)

 

—

Payments of dividends to shareholders

—

 

(6,198)

Repurchases and retirement of common stock

—

 

(14,019)

Proceeds from common stock issued under employee stock purchase plan

(14)

 

—

Payment of minimum tax withholdings on share-based awards

(211)

 

(23)

Contributions from subsidiary held for sale

—

 

4,568

Net cash used in financing activities of continuing operations

(7,880)

 

(18,964)

Effect of exchange rate changes on cash

(607)

 

—

Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents from continuing operations

34,638

 

562

 

 

 

 

Cash from discontinued operation:

 

 

 

Net cash (used in) provided by operating activities of discontinued operation

(1,137)

 

5,199

Net cash used in investing activities of discontinued operation

—

 

(599)

Net cash used in financing activities of discontinued operation

—

 

(4,600)

Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents

33,501

 

562

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period of continuing operations

104,655

 

18,281

Cash at beginning of period of discontinued operation

—

 

—

Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents

33,501

 

562

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period of continuing operations

$ 138,156

 

$ 18,843

 

 

 

 

     

Forward Air Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Nine Months Ended

 

September 30, 2024

 

September 30, 2023

Operating activities:

 

 

 

Net (loss) income from operations

$ (1,089,463)

 

$ 57,524

Adjustments to reconcile net income of operations to net cash provided by operating activities of operations

 

 

 

Depreciation and amortization

106,321

 

39,826

Impairment of goodwill

1,107,465

 

—

Share-based compensation expense

8,088

 

8,570

Provision for revenue adjustments

2,761

 

4,026

Deferred income tax (benefit) expense

(197,156)

 

2,199

Other

5,739

 

(1,045)

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

 

 

 

Accounts receivable

(34,050)

 

20,967

Other receivables

6,159

 

—

Other current and noncurrent assets

(18,215)

 

3,609

Accounts payable and accrued expenses

58,024

 

6,444

Net cash (used in) provided by operating activities

(44,327)

 

142,120

 

 

 

 

Investing activities:

 

 

 

Proceeds from sale of property and equipment

2,493

 

3,275

Purchases of property and equipment

(29,810)

 

(22,080)

Purchase of a business, net of cash acquired

(1,565,242)

 

(56,703)

Other

(319)

 

—

Net cash used in investing activities

(1,592,878)

 

(75,508)

 

 

 

 

Financing activities:

 

 

 

Repayments of finance lease obligations

(15,339)

 

(6,840)

Proceeds from credit facility

—

 

45,000

Payments on credit facility

(80,000)

 

(31,125)

Payment of debt issuance costs

(62,034)

 

—

Payment of earn-out liability

(12,247)

 

—

Payments of dividends to shareholders

—

 

(18,798)

Repurchases and retirement of common stock

—

 

(93,811)

Proceeds from common stock issued under employee stock purchase plan

355

 

421

Payment of minimum tax withholdings on share-based awards

(1,572)

 

(4,315)

Contributions from (distributions to) subsidiary held for sale

—

 

15,877

Net cash used in financing activities

(170,837)

 

(93,591)

Effect of exchange rate changes on cash

138

 

—

Net (decrease) increase in cash and cash equivalents

(1,807,904)

 

(26,979)

 

 

 

 

 

 

 

 

Cash from discontinued operation:

 

 

 

Net cash (used in) provided by operating activities of discontinued operation

(6,013)

 

17,311

Net cash used in investing activities of discontinued operation

—

 

(1,338)

Net cash used in financing activities of discontinued operation

—

 

(15,973)

Net decrease in cash and cash equivalents

(1,813,917)

 

(26,979)

Cash and cash equivalents at beginning of period

1,952,073

 

45,822

Cash and cash equivalents at end of period

$ 138,156

 

$ 18,843

Forward Air Corporation Reconciliation of Non-GAAP Financial Measures

In this press release, the Company includes financial measures that are derived on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States (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 September 30, 2024 and 2023, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), and free cash flow.

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 is also providing Consolidated EBITDA calculated in accordance with our credit agreement as we believe it provides investors with important information regarding our financial condition and compliance with our obligations under our credit agreement.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative to or substitute for, the Company’s financial results prepared in accordance with GAAP. The Company has included, for the periods indicated, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Investors and other readers are encouraged to review the related U.S. GAAP financial measures and the reconciliations of the non-GAAP measures to their most directly comparable U.S. GAAP measures set forth below.

With respect to the 2024 Consolidated EBITDA guidance, please note that the Company is not providing a quantitative reconciliation of Consolidated EBITDA to Net Income because it is not available without unreasonable efforts. The Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation, or to quantify the probable significance of these items. The adjustments required for any such reconciliation of the Company’s forward-looking non-GAAP financial measures cannot be accurately forecast by the Company, and therefore the reconciliation has been omitted.

The following is a reconciliation of net income to Consolidated EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands):

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Income (loss) from continuing operations

 

$ (34,198)

 

$ 6,493

 

$ (1,089,463)

 

$ 57,524

Interest expense

 

52,770

 

2,655

 

140,788

 

7,595

Income tax (benefit) expense

 

1,302

 

2,541

 

(191,990)

 

20,091

Depreciation and amortization

 

25,893

 

14,209

 

106,321

 

39,826

Reported EBITDA

 

45,767

 

25,898

 

(1,034,344)

 

125,036

Impairment of goodwill

 

14,751

 

—

 

1,107,465

 

—

Transaction and integration costs

 

(549)

 

22,371

 

71,393

 

27,871

Severance costs

 

2,829

 

158

 

14,414

 

319

Cost synergies

 

7,267

 

—

 

23,518

 

—

RIF cost savings

 

—

 

5,509

 

10,576

 

15,875

Other

 

6,932

 

1,485

 

19,858

 

2,328

Pro forma -Omni adjusted EBITDA

 

—

 

37,293

 

—

 

128,574

Consolidated EBITDA

 

$ 76,997

 

$ 92,714

 

$ 212,880

 

$ 300,003

 

 

 

 

The following is a reconciliation of net cash provided by operating activities to free cash flow for the three and nine months ended September 30, 2024 and 2023 (in thousands):

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

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

 

$ 52,597

 

$ 24,666

 

$ (44,327)

 

$ 142,120

Proceeds from sale of property and equipment

 

1,087

 

104

 

2,493

 

3,275

Purchases of property and equipment

 

(10,414)

 

(5,244)

 

(29,810)

 

(22,080)

Free cash flow

 

$ 43,270

 

$ 19,526

 

$ (71,644)

 

$ 123,315

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 expectations regarding the Company’s long-term growth; ability to achieve and accelerate synergy capture and eliminate costs from our structure; expectations regarding the Company’s expedited freight business; ability to achieve the intended benefits of the acquisition of Omni Logistics, including any revenue and cost synergies; the Company’s expectations regarding the Company’s financial performance, including Consolidated EBITDA, and the impact it may have on the business and results of operations; and expectations regarding the Company's revenue growth strategies, including with respect to operational efficiency and cost control.

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 unduly 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 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 Quarterly Reports on Form 10-Q and 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241104743197/en/

Investors: Tony Carreño investorrelations@forwardair.com

Media: Justin Moss (404) 362-8933 jmoss@forwardair.com