Financial Performance - Forward Air Corporation reported Q1 2025 revenue of $613 million[31] - The company's Consolidated EBITDA for Q1 2025 was $69 million, with a margin of 112%[31] - The company's LTM Net Leverage was 53x[31] - Expedited Freight segment revenue for Q1 2025 was $249 million[41], with Reported EBITDA of $26 million and a margin of 104%[42] - Omni Logistics segment revenue for Q1 2025 was $323 million[52], with Reported EBITDA of $26 million and a margin of 79%[53] - Intermodal segment revenue for Q1 2025 was $62 million[57], with Reported EBITDA of $10 million and a margin of 164%[58] Operational Metrics - The company's Expedited Freight segment maintained a claims ratio of approximately 01%[48] - The company realized over $100 million in annualized cost savings since closing the Omni acquisition[80] Geographic Exposure - Approximately 12% of the company's revenue is generated outside of the United States[26] - The revenue split by customer region is approximately 88% in the United States, 4% in the Americas (excluding the US), 7% in APAC, and less than 1% in EMEA[26]

Financial Results - The company reported preliminary financial results for Q1 2025, with specific figures to be detailed in the press release[4] - The press release is available as Exhibit 99.1, which includes updates on financial performance[7] - There are no specific performance guidance or future outlook details provided in the current report[4] Regulatory Compliance - The report is filed under the Securities Exchange Act of 1934, ensuring compliance with regulatory requirements[5] - The company is not classified as an emerging growth company, indicating it has opted for standard compliance timelines[3] - The company has a Commission File Number of 000-22490, indicating its registration with the SEC[2] Company Information - The common stock of Forward Air Corporation is traded under the symbol FWRD on NASDAQ[2] - The address of the company's principal executive offices is 1915 Snapps Ferry Road Building N, Greeneville, TN 37745[2] - The CEO of Forward Air Corporation is Shawn Stewart, who signed the report[11] Business Developments - The report does not include any new product or technology developments, market expansions, or acquisitions[4]

Core Insights - Forward Air's share price surged nearly 32% following positive preliminary financial results, significantly outperforming the S&P 500 index's 9.5% increase [1] Financial Performance - The company reported preliminary first-quarter non-GAAP EBITDA is expected to be between $54 million and $59 million [2] - Liquidity, defined as cash, cash equivalents, and availability of funds from a senior secured term loan, is projected to rise to $392 million by the end of the quarter, reflecting a $10 million improvement from the previous quarter [3] Tariff Impact - Management indicated that 10% to 15% of its 2024 revenue is anticipated to come from countries affected by tariffs imposed during the Trump administration, which is considered a mild impact compared to other industries [4] Future Outlook - The company will release its audited first-quarter results on May 7, and potential tariff "pauses" or beneficial trade agreements could further boost Forward's stock performance [5]

Group 1: Market Reaction to Tariffs - A comprehensive overhaul of U.S. trade policy, including broad tariffs, is causing significant market volatility, particularly affecting transportation companies like Union Pacific, Forward Air, and Zim Integrated Shipping Services, which have seen declines of 4.13%, 21.55%, and 14.20% respectively [1] - The extent of the tariffs was unexpected, and they are designed to shift manufacturing back to the U.S., which could fundamentally impact global shippers like Zim and Forward [2] Group 2: Impact on Union Pacific - Union Pacific's railway, which connects West Coast ports to the U.S. heartland, may lose value due to significant changes in import values resulting from the tariffs [3] - The uncertainty surrounding tariffs and consumer demand may lead to reduced inventories, impacting the volume of goods transported, with Union Pacific already forecasting flat growth in 2025, which is now at risk [5] Group 3: Long-term Outlook - For investors with a long-term perspective, there is optimism as tariffs may alter trade patterns but do not eliminate the need for transportation of goods, suggesting that companies like Union Pacific possess irreplaceable assets that will be utilized over time [4]

Part I [Item 1. Business](index=9&type=section&id=Item%201.%20Business) Forward Air is an asset-light transportation provider with three segments, expanding globally through the 2024 Omni acquisition and initiating a strategic review in 2025 - The company operates through three reportable segments: Expedited Freight (**44% of 2024 revenue**), Omni Logistics (**47% of 2024 revenue**), and Intermodal (**9% of 2024 revenue**)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - On January 25, 2024, the company completed the acquisition of Omni Newco LLC ("Omni"), a key strategic move to expand operations domestically and internationally[27](index=27&type=chunk)[34](index=34&type=chunk) - In January 2025, the Board of Directors initiated a comprehensive review of strategic alternatives, which could include a potential sale, merger, or other strategic transaction[32](index=32&type=chunk) [Operations by Segment](index=10&type=section&id=Item%201.%20Business%23Operations) Operations cover Expedited Freight LTL, Omni Logistics global solutions, and Intermodal drayage, each with distinct service models Expedited Freight LTL Network - Average Weekly Volume | Year | Average Weekly Volume in Pounds (In millions) | | :--- | :--- | | 2022 | 54.8 | | 2023 | 52.7 | | 2024 | 54.3 | - In 2024, Expedited Freight's ten largest customers accounted for approximately **27% of its revenue**, with no single customer exceeding **10%**[50](index=50&type=chunk) - In 2024, Omni Logistics' ten largest customers accounted for approximately **41% of its revenue**, with the top two customers representing **14%** and **13%** respectively[55](index=55&type=chunk) - The Intermodal segment's transportation capacity in 2024 was sourced from Leased Capacity Providers (**62.1%**), Company-employed drivers (**33.5%**), and third-party motor carriers (**4.4%**)[60](index=60&type=chunk) [Workforce and Sustainability](index=15&type=section&id=Item%201.%20Business%23Workforce%20and%20Sustainability) The company employs 6,319 full-time staff, none unionized, and pursues an ESG strategy focused on people, customers, and environment - As of December 31, 2024, the company employed **6,319 full-time** and **267 part-time employees**, none of whom were covered by a collective bargaining agreement[71](index=71&type=chunk) - The company has established a preliminary goal to reduce absolute Scope 1 and Scope 2 GHG emissions by **2030** from a **2021 base year** and is updating its ESG roadmap to align with the newly combined operations with Omni Logistics[96](index=96&type=chunk) - The company supports veteran-related causes through its charitable organization, Operation: Forward Freedom, raising **$350,000** for Hope for the Warriors in 2024[89](index=89&type=chunk) [Risk Management and Regulation](index=19&type=section&id=Item%201.%20Business%23Risk%20Management%20and%20Regulation) Risk management involves self-insurance for liabilities and compliance with extensive U.S. and international transportation regulations Vehicle Liability Insurance Risk Retention (Policy Term 10/1/2024 to 10/1/2025) | Business/Layer | Risk Retention | Frequency | Layer | | :--- | :--- | :--- | :--- | | LTL business | $5,000 (in thousands) | Occurrence/Accident | $0 to $5,000 | | Truckload business | $5,000 (in thousands) | Occurrence/Accident | $0 to $5,000 | | Intermodal | $1,000 (in thousands) | Occurrence/Accident | $0 to $1,000 | | LTL, Truckload and Intermodal | $5,000 (in thousands) | Policy Term Aggregate | $5,000 to $10,000 | - The company maintains workers' compensation insurance with a self-insured retention of **$500,000 per occurrence**[101](index=101&type=chunk) - The business is regulated by various U.S. agencies, including the DOT, FMCSA, EPA, and OSHA, and is subject to international laws such as the Foreign Corrupt Practices Act (FCPA) for its global operations[103](index=103&type=chunk)[106](index=106&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including economic sensitivity, Omni acquisition integration, substantial debt, cybersecurity threats, and regulatory compliance [Risks Relating to Our Business and Operations](index=21&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20Our%20Business%20and%20Operations) Operational risks include economic sensitivity, fuel price volatility, competition, capacity retention, customer concentration, and strategic review uncertainty - The business is sensitive to economic conditions that impact freight volumes, pricing, and customer solvency, with profitability vulnerable to volume declines due to a significant portion of fixed costs[112](index=112&type=chunk)[113](index=113&type=chunk)[127](index=127&type=chunk) - The top ten customers accounted for approximately **24% of revenue in 2024**, creating a concentration risk[135](index=135&type=chunk) - The Board initiated a review of strategic alternatives in January 2025, creating uncertainty that could affect the business, personnel, and customer retention[133](index=133&type=chunk) [Risks Relating to Omni Acquisition](index=31&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20Omni%20Acquisition) Omni acquisition risks include integration failure, high costs, Up-C structure complexities, and a material weakness in internal financial controls - The company may not realize the anticipated benefits and synergies from the Omni Acquisition due to integration challenges, potential loss of customers or key employees, and unexpected costs[117](index=117&type=chunk)[118](index=118&type=chunk) - A material weakness in internal control over financial reporting was identified related to the accounting for the Omni business combination, its related income taxes, and the impairment process[168](index=168&type=chunk) - The company is obligated to pay Omni Holders **83.5%** of certain tax savings it may realize under a Tax Receivable Agreement, and these payments are expected to be substantial[174](index=174&type=chunk) [Risks Relating to our Indebtedness](index=33&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20our%20Indebtedness) Significant post-Omni acquisition debt, including **$725 million** in notes and **$1.045 billion** in term loans, increases financial vulnerability and limits flexibility - In connection with the Omni Acquisition, the company's debt consists of **$725 million** in senior secured notes and **$1,045 million** in senior secured term loans[176](index=176&type=chunk) - The substantial debt could increase vulnerability to adverse economic conditions, limit flexibility, and require significant cash flow for payments, reducing availability for other business needs[177](index=177&type=chunk)[181](index=181&type=chunk) [Risks Relating to Regulatory Environment](index=37&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20Regulatory%20Environment) Regulatory risks include potential reclassification of independent contractors, significant self-insured liabilities, and compliance with extensive domestic and international laws - A determination by regulators that Leased Capacity Providers are employees rather than independent contractors, under rules like California's AB5, could expose the company to significant liabilities and increased ongoing expenses[192](index=192&type=chunk)[193](index=193&type=chunk) - The company self-insures a significant portion of its claims exposure for vehicle liability, workers' compensation, and cargo loss, making earnings volatile and subject to rising insurance costs[198](index=198&type=chunk)[199](index=199&type=chunk) - The FMCSA's Compliance, Safety, Accountability (CSA) program could adversely impact the ability to hire qualified drivers or contract with carriers if safety scores are poor, potentially harming customer relationships and growth[205](index=205&type=chunk) [Item 1B. Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[216](index=216&type=chunk) [Item 1C. Cybersecurity](index=43&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cybersecurity program with Board oversight, CISO-led management, and a focus on technical safeguards and incident response - The Board of Directors has ultimate oversight for cybersecurity, delegating monitoring responsibility to the Audit Committee, with Casey O'Malley serving as the Chief Information Security Officer (CISO)[222](index=222&type=chunk) - The cybersecurity program includes technical safeguards (firewalls, encryption, MFA), a dedicated Incident Response Team, third-party risk management, and regular employee training[219](index=219&type=chunk) - Cyber incidents are evaluated for materiality based on financial impact, reputational damage, regulatory compliance concerns, and operational disruption to determine appropriate disclosure[221](index=221&type=chunk) [Item 2. Properties](index=45&type=section&id=Item%202.%20Properties) The company's headquarters are in Greenville, TN, with 259 properties, 6 owned and 253 leased, deemed adequate for current operations Principal Facilities as of December 31, 2024 | Location | Segment | Approximate Square Feet | | :--- | :--- | :--- | | Atlanta, GA | Expedited Freight | 152,000 | | Chicago, IL | Expedited Freight | 125,000 | | Dallas, TX | Expedited Freight | 223,000 | | Euless, TX | Omni Logistics | 367,000 | | Los Angeles, CA | Expedited Freight | 300,000 | | Pico Rivera, CA | Omni Logistics | 203,000 | | South Brunswick, NJ | Omni Logistics | 294,000 | | Taipei, Taiwan | Omni Logistics | 432,000 | | Hong Kong, China | Omni Logistics | 360,000 | [Item 3. Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings) The company is defending a shareholder lawsuit challenging the lack of a shareholder vote on the Omni Acquisition and alleging fiduciary duty breaches - A shareholder complaint filed in September 2023, and subsequently amended, challenges the company's and directors' determination not to subject the Omni Acquisition to a shareholder vote, alleging violations of Tennessee corporate law and breaches of fiduciary duty[225](index=225&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[226](index=226&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Forward Air's common stock trades on Nasdaq, with no dividends paid in FY2024 or anticipated, and no share repurchases in Q4 2024 - The company did not declare or pay any cash dividends on its Common Stock during fiscal year 2024 and does not anticipate paying any in the foreseeable future[229](index=229&type=chunk) - The company did not repurchase any of its equity securities during the three months ended December 31, 2024[231](index=231&type=chunk) Cumulative Shareholder Return Comparison (2019-2024) | Year | Forward Air Corporation | Nasdaq Trucking and Transportation Stocks Index | Nasdaq Global Select Stock Market Index | | :--- | :--- | :--- | :--- | | 2019 | $100 | $100 | $100 | | 2020 | $110 | $100 | $137 | | 2021 | $173 | $121 | $169 | | 2022 | $150 | $97 | $114 | | 2023 | $90 | $120 | $165 | | 2024 | $46 | $127 | $213 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2024 results show revenue growth to **$2.47 billion** driven by Omni, but a **$1.12 billion** net loss due to a **$1.03 billion** goodwill impairment and increased expenses [Results of Operations (FY 2024 vs FY 2023)](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) FY2024 consolidated operating revenue increased **80.5%** to **$2.47 billion**, but a **$1.03 billion** goodwill impairment led to a **$1.06 billion** loss from continuing operations Consolidated Results of Operations (in thousands) | Metric | FY 2024 | FY 2023 | % Change | | :--- | :--- | :--- | :--- | | Operating revenue | $2,474,262 | $1,370,735 | 80.5% | | Total operating expenses | $3,537,198 | $1,282,525 | 175.8% | | Impairment of goodwill | $1,028,397 | $0 | N/A | | Income (loss) from continuing operations | ($1,062,936) | $88,210 | (1,305.0)% | | Net (loss) income attributable to Forward Air | ($816,969) | $167,351 | (588.2)% | - The increase in operating revenue was primarily due to the inclusion of **$1,196,841** from the newly acquired Omni Logistics segment[265](index=265&type=chunk) - The increase in operating expenses was primarily due to **$2,241,644** in expenses from the Omni segment, which includes a goodwill impairment charge of **$1,028,397**[266](index=266&type=chunk) [Segment Performance](index=54&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Segment%20Performance) Expedited Freight operating income declined **41.4%**, Intermodal income fell **25.3%**, and Omni Logistics reported a **$1.04 billion** operating loss primarily due to goodwill impairment Expedited Freight Segment Performance (in thousands) | Metric | FY 2024 | FY 2023 | % Change | | :--- | :--- | :--- | :--- | | Total operating revenue | $1,115,163 | $1,096,958 | 1.7% | | Income from operations | $67,951 | $116,040 | (41.4)% | Intermodal Segment Performance (in thousands) | Metric | FY 2024 | FY 2023 | % Change | | :--- | :--- | :--- | :--- | | Operating revenue | $232,832 | $274,043 | (15.0)% | | Income from operations | $18,925 | $25,327 | (25.3)% | | Drayage shipments | 254,072 | 274,997 | (7.6)% | - The Omni Logistics segment reported an operating loss of **$1,044.8 million** for the period from January 25, 2024, to December 31, 2024, which included a goodwill impairment charge of **$1,028.4 million**[263](index=263&type=chunk)[267](index=267&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) Liquidity is supported by operations and credit, but the Omni acquisition added **$1.68 billion** in debt, leading to **$69.0 million** cash used in operations in FY2024 Summary of Cash Flows (in thousands) | Cash Flow Activity (Continuing Operations) | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($69,015) | $199,212 | | Net cash used in investing activities | ($1,608,586) | ($83,687) | | Net cash (used in) provided by financing activities | ($163,832) | $1,790,726 | - To finance the Omni Acquisition, the company incurred significant indebtedness, including **$725 million** in **9.5%** senior secured notes due 2031 and a **$1.125 billion** senior secured term loan facility (subsequently reduced)[313](index=313&type=chunk)[315](index=315&type=chunk) - The company entered into a Tax Receivable Agreement (TRA) obligating it to pay certain former Omni holders **83.5%** of specific tax benefits realized, which could be substantial future payments[321](index=321&type=chunk) [Critical Accounting Policies and Estimates](index=60&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment for self-insurance reserves, business combinations, and the complex Tax Receivable Agreement liability - A goodwill impairment charge of **$1,028.4 million** was recorded for the Omni reporting unit in 2024, primarily due to a decrease in the company's market value and uncertainty following the acquisition[304](index=304&type=chunk) - As of December 31, 2024, self-insurance loss reserves were **$65.1 million**, determined through an estimation process involving actuarial analysis and significant judgments[298](index=298&type=chunk)[300](index=300&type=chunk) - The company recorded a Tax Receivable Agreement (TRA) liability of **$13.3 million** as of December 31, 2024, but no additional TRA liability was recorded for benefits generated in 2024 due to a valuation allowance against related deferred tax assets, as future taxable income is not considered probable[308](index=308&type=chunk)[537](index=537&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rate fluctuations on the Revolving Credit Facility and fuel price volatility, mitigated by a surcharge program - The company's main market risks are changes in interest rates and fuel prices[327](index=327&type=chunk) - A hypothetical **150 basis point** increase in the Revolving Credit Facility borrowing rate would increase annual interest expense by approximately **$1,627 thousand**[327](index=327&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=66&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item presents the company's audited consolidated financial statements and supplementary data as a separate section of the Form 10-K [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=66&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[330](index=330&type=chunk) [Item 9A. Controls and Procedures](index=66&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls were ineffective as of December 31, 2024, due to a material weakness in internal controls related to Omni acquisition accounting, with a remediation plan underway - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[331](index=331&type=chunk) - A material weakness was identified in internal controls over financial reporting due to complexities in accounting for the Omni acquisition, specifically related to the business combination, income taxes, and the impairment process[338](index=338&type=chunk)[345](index=345&type=chunk) - The company's remediation plan includes enhancing the finance team's skill set, engaging qualified external experts for complex matters, and implementing more timely and enhanced review procedures[340](index=340&type=chunk) - The independent registered public accounting firm, Ernst & Young LLP, issued an adverse opinion on the company's internal control over financial reporting as of December 31, 2024[344](index=344&type=chunk)[382](index=382&type=chunk) [Item 9B. Other Information](index=70&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 trading agreements during the fourth quarter of 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading agreement during the quarter ended December 31, 2024[355](index=355&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=70&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement [Item 11. Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=70&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information on security ownership is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=70&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement [Item 14. Principal Accounting Fees and Services](index=70&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2025 Annual Meeting of Shareholders proxy statement Part IV [Item 15. Exhibits, Financial Statement Schedules](index=70&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, including audited consolidated financial statements and notes [Financial Statements](index=77&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules%23Financial%20Statements) Audited FY2024 financial statements show total assets of **$2.80 billion**, a **$1.13 billion** net loss due to goodwill impairment, and **$1.68 billion** in long-term debt Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total current assets | $472,500 | $347,020 | | Goodwill | $522,712 | $278,706 | | Other acquired intangibles, net | $999,216 | $134,781 | | Total assets | $2,802,641 | $2,979,533 | | Total current liabilities | $384,046 | $237,097 | | Long-term debt, less current portion | $1,675,930 | $0 | | Total liabilities | $2,516,773 | $2,215,268 | | Total shareholders' equity | $285,868 | $764,265 | Consolidated Statement of Comprehensive (Loss) Income (in thousands) | Account | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | Operating revenue | $2,474,262 | $1,370,735 | $1,679,634 | | Income (loss) from continuing operations | ($1,062,936) | $88,210 | $247,591 | | Net (loss) income | ($1,131,228) | $167,351 | $193,191 | | Net (loss) income attributable to Forward Air | ($816,969) | $167,351 | $193,191 | | Diluted net (loss) income per share | ($30.63) | $6.40 | $7.14 | [Notes to Financial Statements](index=89&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules%23Notes%20to%20Financial%20Statements) Notes detail the Omni acquisition's **$2.27 billion** purchase price and **$1.03 billion** goodwill impairment, new debt structure, and income tax provisions - The Omni acquisition was completed on Jan 25, 2024, for a total purchase price of **$2.27 billion**, consisting of cash, stock, and liabilities assumed under the Tax Receivable Agreement, initially adding **$1.27 billion** to goodwill[469](index=469&type=chunk)[479](index=479&type=chunk) - A goodwill impairment charge of **$1,028.4 million** related to the Omni reporting unit was recorded in 2024[432](index=432&type=chunk)[434](index=434&type=chunk) - As of Dec 31, 2024, the company had **$1.68 billion** in long-term debt, consisting of a **$1.045 billion** term loan and **$725 million** in senior secured notes, incurred to finance the Omni acquisition[485](index=485&type=chunk) - A valuation allowance of **$72.5 million** was recorded against deferred tax assets as of Dec 31, 2024, as it was determined more likely than not that some portion of these assets will not be realized[532](index=532&type=chunk)

Financial Data and Key Metrics Changes - For the full year 2024, the company reported consolidated EBITDA of $308 million, near the top of the guidance range of $300 million to $310 million [12] - Revenue for Q4 2024 was $633 million, an increase of 87% or $294 million compared to Q4 2023, largely driven by the Omni transaction [28] - Consolidated income from continuing operations for Q4 was $76 million, which included a goodwill impairment adjustment of $79 million related to the Omni Logistics segment [33][34] - Consolidated EBITDA for Q4 was $69 million, representing an 11% margin [35] Business Line Data and Key Metrics Changes - Revenue in the Expedited Freight segment decreased by $13 million or 4.7% to $266 million compared to the previous year's comparable quarter [30] - The Intermodal segment's revenue was flat at $60 million compared to Q4 2023, with a 3.2% increase in revenue per shipment offset by a 2.8% decrease in the number of trade shipments [32] - Omni Logistics revenue was $326 million, with a sequential decrease of $9 million or 2.7% compared to Q3 2024 [33] Market Data and Key Metrics Changes - The Expedited Freight segment experienced a 5.8% decline in revenue per hundredweight and a 4.3% decrease in tonnage per day [30] - The overall LTL market continues to be impacted by a prolonged slowdown in the freight environment, affecting volume across the industry [22] Company Strategy and Development Direction - The company is focused on driving profitable long-term growth by expanding synergistic service offerings and improving operational efficiencies [18] - A transformation strategy is being implemented to rationalize IT systems and enhance data quality, with a global shared services organization being established [20] - The company aims to shed poorly priced freight and improve yield through corrective pricing actions initiated in Q4 2024 [26][100] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced during the turnaround but expressed confidence in the foundational changes made in 2024 benefiting future performance [45] - The company expects to see improvements in cash flow and operational efficiency as it moves away from transaction costs and integrates its operations [44] - Management remains optimistic about the potential for growth in 2025 and beyond, despite current market conditions [49] Other Important Information - The company successfully delivered on targeted integration synergies and cost savings of $75 million, with total annualized savings exceeding $100 million [15][16] - The company ended Q4 with $382 million in liquidity, including $105 million in cash [40] Q&A Session Summary Question: Impact of tariff and trade disruptions at Omni - Management indicated that while it is difficult to project the impact of tariffs, they do not foresee a major risk to the business from current trade dynamics [54][55] Question: Competition and market dynamics - Management expressed confidence in their ability to differentiate through technology and service quality, despite increased competition [58] Question: Cash flow and balance sheet outlook - Management noted that the business could be cash flow positive without bond payments, emphasizing the importance of executing core business operations [63] Question: Drivers of the Omni business in the quarter - Management highlighted increases in air and ocean volumes, supported by strong warehouse operations, despite a soft pricing environment [92][93]

4Q24 Earnings Presentation Statements & Disclaimers Forward Looking Statements This presentation 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-looki ...

Financial Data and Key Metrics Changes - For the full year 2024, the company reported consolidated EBITDA of $308 million, near the top of the guidance range of $300 million to $310 million [12] - Revenue for Q4 2024 was $633 million, an 87% increase compared to the same quarter of the previous year, largely driven by the Omni transaction [28] - Consolidated income from continuing operations for Q4 was $76 million, which included a goodwill impairment adjustment of $79 million related to the Omni Logistics segment [33][34] - Consolidated EBITDA for Q4 was $69 million, representing an 11% margin [35] Business Line Data and Key Metrics Changes - Revenue in the Expedited Freight segment decreased by $13 million or 4.7% to $266 million compared to the previous year's quarter, primarily due to a 5.8% decline in revenue per hundredweight [30] - The Intermodal segment's revenue remained flat at $60 million compared to Q4 2023, with a 3.2% increase in revenue per shipment offset by a 2.8% decrease in the number of trade shipments [32] - Omni Logistics generated $326 million in revenue for Q4, but saw a sequential decrease of $9 million or 2.7% compared to Q3 2024 [33] Market Data and Key Metrics Changes - The company noted a prolonged slowdown in the freight environment, impacting the LTL market and contributing to a decrease in volume across segments [22] - The pricing strategy shift from density-rated tariffs to class-based tariffs has affected profitability, with corrective pricing actions implemented in Q4 expected to yield improvements in Q1 2025 [26][81] Company Strategy and Development Direction - The company is focused on driving profitable long-term growth by expanding synergistic service offerings and rationalizing IT systems to improve data quality and decision-making [18][20] - A global shared services organization is being established to assist in integrating and managing back-office operations [18] - The company aims to shed poorly priced freight and improve yield through a revised pricing strategy [26][100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy and enhance shareholder value, despite the challenges faced in 2024 [49] - The company anticipates that the foundational changes made in 2024 will benefit performance in 2025 and beyond [17] - Management acknowledged the importance of maintaining high service levels to drive customer retention and growth [23] Other Important Information - The company successfully delivered on targeted integration synergies and cost savings of $75 million, with total annualized savings exceeding $100 million [15][16] - The company ended Q4 with $382 million in liquidity, including $105 million in cash and $277 million available under the revolver [40] Q&A Session Summary Question: Impact of tariff and trade disruptions at Omni - Management indicated that while it is difficult to project the impact of tariffs on freight volumes, they do not foresee a major risk to the business from current trade dynamics [54][55] Question: Competition and market dynamics - Management acknowledged the presence of competitors but emphasized the company's focus on differentiation through technology and service quality [58] Question: Cash flow and balance sheet outlook - Management expressed optimism about becoming cash flow positive, especially after overcoming transaction expenses and legacy costs [63] Question: Drivers of Omni business performance - Management noted an increase in air and ocean volumes, supported by strong warehouse operations, despite a soft pricing environment [92][93] Question: Future pricing strategy and volume expectations - Management expects to see yield improvements while shedding unprofitable volume, indicating a focus on maintaining margins even in a challenging volume environment [100][101]

Financial Guidance - The Company reaffirmed its previously issued financial guidance for the fiscal year ended December 31, 2024[9]. Credit Agreement Amendments - Amendment No. 3 to the Credit Agreement increases the maximum consolidated first lien net leverage ratio to 6.75:1.00 for the quarters ending December 31, 2024, through September 30, 2025[11]. - The revolving credit commitments under the Credit Agreement are reduced from $340 million to $300 million, with a potential further reduction to $250 million if the leverage ratio exceeds 6.50:1.00[11]. - An anti-cash hoarding covenant will require the Borrower to prepay revolving credit loans if unrestricted cash exceeds $120 million at the end of any month[11]. - The financial performance covenant has been modified to allow for greater leverage during the specified period[11]. - The Company plans to restrict certain payments unless its consolidated total net leverage ratio is below 4.00:1.00[11]. Strategic Initiatives - The Company is implementing the initial phase of its transformation strategy to maximize shareholder value[12]. - The Company aims to provide additional financial flexibility to fund future growth opportunities in support of its long-term strategy[6]. - The Company is exploring strategic alternatives to enhance shareholder value[12]. Financial Advisory Services - The financial institutions involved in the Credit Agreement may perform various financial advisory services for the Company, receiving customary fees[7].

Financial Performance - The company reported operating revenue of $334.5 million for the three months ended September 30, 2024, with total operating expenses of $333.4 million, resulting in income from operations of $1.1 million, representing 0.3% of revenue [133]. - For the nine months ended September 30, 2024, the company achieved operating revenue of $871.2 million, while total operating expenses amounted to $2.0 billion, leading to a loss from operations of $1.1 billion, which is (130.1)% of revenue [135]. - Operating revenues increased by $314,961, or 92.4%, to $655,937 for the three months ended September 30, 2024, compared to $340,976 for the same period in 2023 [140]. - Operating expenses rose by $303,953, or 92.3%, to $633,240 for the three months ended September 30, 2024, primarily due to the inclusion of $333,402 from the Omni Logistics segment [141]. - Income from operations decreased by $11,008, or 94.2%, resulting in a loss of $22,697 for the three months ended September 30, 2024, compared to income of $11,689 for the same period in 2023 [142]. - Operating revenues increased by $809,109, or 78.4%, to $1,841,416 for the nine months ended September 30, 2024, compared to $1,032,307 for the same period in 2023 [175]. - Loss from operations was $1,138,791 for the nine months ended September 30, 2024, a change of $1,224,001 from income of $85,210 in the same period in 2023, driven mainly by the Omni Logistics segment [177]. - Net loss attributable to Forward Air was $780,553 for the nine months ended September 30, 2024, compared to net income of $65,607 for the same period in 2023, reflecting a decrease of $846,160 [180]. Segment Performance - The Omni Logistics segment contributed $871,232 to operating revenues, while the Expedited Freight segment saw an increase of $31,396, offset by a decrease of $41,600 in the Intermodal segment [175]. - Expedited Freight operating revenues increased by $5,832, or 2.1%, to $284,707 for the three months ended September 30, 2024, primarily due to increased Truckload revenue [151]. - Truckload revenue increased by $4,835, or 12.5%, driven by higher customer demand compared to the same period in 2023 [147]. - Intermodal operating revenues decreased by $4,771, or 7.7%, to $57,412 for the three months ended September 30, 2024, from $62,183 for the same period in 2023 [164]. - Intermodal income from operations decreased by $653, or 13.8%, to $4,091 for the three months ended September 30, 2024, compared to $4,744 for the same period in 2023 [171]. - Expedited Freight purchased transportation increased by $10,185, or 7.8%, to $140,035 for the three months ended September 30, 2024, compared to $129,850 for the same period in 2023 [152]. - Intermodal operating revenues decreased by $41,600, or 19.4%, to $173,003, primarily due to a 9.1% decrease in drayage shipments [199]. Expenses and Costs - Interest expense increased significantly to $52,770 for the three months ended September 30, 2024, compared to $2,655 for the same period in 2023, due to higher borrowings and increased interest rates [143]. - Operating expenses rose by $2,033,110, or 214.7%, to $2,980,207 for the nine months ended September 30, 2024, primarily due to $2,004,555 in expenses from the Omni Logistics segment, including a goodwill impairment charge of $1,107,465 [176]. - The average interest rate on outstanding borrowings rose to 9.56% for the three months ended September 30, 2024, compared to 6.62% for the same period in 2023 [143]. - Salaries, wages, and employee benefits for Expedited Freight rose by $2,744, or 4.8%, to $59,426 for the three months ended September 30, 2024, from $56,682 in the same period in 2023 [153]. - Depreciation and amortization for Expedited Freight increased by $1,459, or 16.2%, to $10,481 for the three months ended September 30, 2024, from $9,022 in the same period in 2023 [155]. - Insurance and claims for Expedited Freight increased by $2,139, or 22.4%, to $11,672 for the three months ended September 30, 2024, compared to $9,533 for the same period in 2023 [156]. Acquisitions and Goodwill - The company completed the Omni Acquisition on January 25, 2024, for a total consideration of approximately $100.5 million in cash and stock [130]. - The Omni Acquisition had a preliminary purchase price of $2,313,653, with $1,565,242 paid in cash [229]. - The company recorded goodwill impairment charges totaling $1,092,714 million related to the Omni Logistics reporting unit due to a decrease in market value and other factors [213]. - Cumulative goodwill impairment through the nine months ended September 30, 2024, is $1,107,465 million [213]. - The company is obligated to pay certain Omni Holders 83.5% of the total tax benefit realized from the Omni Acquisition under the Tax Receivable Agreement [225]. Cash Flow and Financing - Net cash used in operating activities of continuing operations was $45,770 million for the nine months ended September 30, 2024, compared to net cash provided of $142,120 million for the same period in 2023 [228]. - Net cash used in investing activities for the nine months ended September 30, 2024, was $1,592,878, significantly higher than $75,508 for the same period in 2023 [229]. - Net cash used in financing activities for continuing operations was $169,394 for the nine months ended September 30, 2024, up from $93,591 in 2023 [230]. - The company launched a private offering of $725,000 million aggregate principal amount of senior secured notes to finance the Omni Acquisition [217]. - The company has a New Term Loan with an aggregate principal amount of $400,000, bearing interest based on SOFR plus an applicable margin [219]. Market Conditions and Risks - The economic environment remains uncertain, with inflation and high interest rates impacting demand for transportation services, leading to declines in rates [127]. - The company anticipates challenges such as economic factors, competition, and operational efficiencies that may affect future results [237]. - As of the first quarter of 2024, there were no material changes in the company's exposure to market risk [239].