[Part I: Financial Information](index=4&type=section&id=Part%20I%3A%20Financial%20Information) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for Q3 and nine months ended September 30, 2023, reflect a significant year-over-year decline in revenue, net income, and operating cash flow, despite stable total assets and ongoing acquisition activities [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $18,843 | $45,822 | | Total current assets | $237,730 | $304,315 | | Goodwill | $356,763 | $306,184 | | **Total assets** | **$1,190,581** | **$1,208,076** | | **Liabilities & Equity** | | | | Total current liabilities | $190,441 | $169,398 | | Long-term debt, less current portion | $118,857 | $106,588 | | **Total shareholders' equity** | **$665,700** | **$707,244** | | **Total liabilities and shareholders' equity** | **$1,190,581** | **$1,208,076** | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q3 2023 vs Q3 2022 Performance (in thousands, except per share) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Operating revenues | $413,447 | $510,023 | | Income from operations | $15,493 | $71,665 | | Net income | $9,288 | $52,133 | | Diluted EPS | $0.36 | $1.93 | Nine Months 2023 vs 2022 Performance (in thousands, except per share) | Metric | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | | Operating revenues | $1,242,695 | $1,492,203 | | Income from operations | $96,213 | $204,561 | | Net income | $65,607 | $150,249 | | Diluted EPS | $2.50 | $5.53 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Nine Months Ended Cash Flow Summary (in thousands) | Cash Flow Activity | Sep 30, 2023 | Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $159,431 | $196,814 | | Net cash used in investing activities | ($76,846) | ($64,411) | | Net cash used in financing activities | ($109,564) | ($122,873) | | **Net (decrease) increase in cash** | **($26,979)** | **$9,530** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates two reportable segments: Expedited Freight (providing LTL, truckload, and final mile services) and Intermodal (providing first- and last-mile drayage services)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - In January 2023, the company acquired Land Air Express, Inc. for **$56.6 million** to expand its national terminal footprint, recording **$50.4 million** in goodwill for the Expedited Freight segment[36](index=36&type=chunk)[59](index=59&type=chunk) - On August 10, 2023, the company entered into a merger agreement to acquire Omni Newco LLC for **$150 million** in cash plus significant common and convertible preferred equity, involving complex financing arrangements and a Tax Receivable Agreement[37](index=37&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - The company incurred **$22.4 million** in due diligence and transaction costs in Q3 2023 related to the Omni acquisition, recorded in 'Other operating expenses'[55](index=55&type=chunk) - The company is involved in significant legal proceedings related to the Omni merger, including a shareholder complaint questioning the need for a shareholder vote and a complaint from Omni seeking to compel the closing of the transaction[102](index=102&type=chunk)[104](index=104&type=chunk) - The company paid a quarterly cash dividend of **$0.24 per share** and repurchased **883,000 shares** for **$93.8 million** during the first nine months of 2023[98](index=98&type=chunk)[100](index=100&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant decline in Q3 and nine-month revenue and profitability to a challenging freight environment, lower segment volumes, pricing pressure, and substantial Omni acquisition transaction costs [Results from Operations - Three Months Ended](index=33&type=section&id=Results%20from%20Operations%20-%20Three%20Months%20Ended) Consolidated Results - Q3 2023 vs Q3 2022 (in thousands) | Metric | Q3 2023 | Q3 2022 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $413,447 | $510,023 | (18.9)% | | Income from operations | $15,493 | $71,665 | (78.4)% | | Net income | $9,288 | $52,133 | (82.2)% | - The decline in Q3 revenue was driven by a **$44.3 million** decrease in the Expedited Freight segment and a **$52.2 million** decrease in the Intermodal segment[144](index=144&type=chunk) - The 'Other Operations' category reported a significant operating loss of **$25.6 million** in Q3 2023, compared to a **$1.2 million** loss in Q3 2022, primarily due to **$22.4 million** in transaction costs for the Omni acquisition[143](index=143&type=chunk)[176](index=176&type=chunk) [Segment Analysis - Three Months Ended](index=35&type=section&id=Segment%20Analysis%20-%20Three%20Months%20Ended) - **Expedited Freight:** Q3 revenue fell **11.2%** to **$351.3 million**, and operating income dropped **35.4%** to **$36.4 million**, caused by a **1.8%** decrease in tonnage and an **8.8%** decrease in revenue per hundredweight, reflecting softer demand[150](index=150&type=chunk)[152](index=152&type=chunk)[154](index=154&type=chunk) - **Intermodal:** Q3 revenue plummeted **45.7%** to **$62.2 million**, with operating income falling **71.4%** to **$4.7 million**, driven by a **23.2%** decrease in drayage shipments and a **31.6%** drop in drayage revenue per shipment due to weak market demand[164](index=164&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk) [Results from Operations - Nine Months Ended](index=42&type=section&id=Results%20from%20Operations%20-%20Nine%20Months%20Ended) Consolidated Results - Nine Months 2023 vs 2022 (in thousands) | Metric | Nine Months 2023 | Nine Months 2022 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $1,242,695 | $1,492,203 | (16.7)% | | Income from operations | $96,213 | $204,561 | (53.0)% | | Net income | $65,607 | $150,249 | (56.3)% | - The 'Other Operations' category reported a **$24.3 million** operating loss for the nine-month period, up from a **$5.5 million** loss in the prior year, primarily due to **$27.9 million** in Omni acquisition-related costs[213](index=213&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash from operating activities decreased to **$159.4 million** for the nine months of 2023 from **$196.8 million** in the prior year, primarily due to lower net income[219](index=219&type=chunk) - Investing activities used **$76.8 million**, including **$56.7 million** for the acquisition of Land Air Express and **$23.4 million** in capital expenditures[220](index=220&type=chunk) - Financing activities used **$109.6 million**, which included **$93.8 million** for common stock repurchases and **$18.8 million** for dividend payments[221](index=221&type=chunk)[222](index=222&type=chunk) - In connection with the Omni merger, the company commenced a private offering of **$725 million** in **9.50%** senior secured notes due 2031, which closed on October 2, 2023[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there were no material changes in its exposures to market risk during the third quarter of 2023 compared to the disclosures in its 2022 Annual Report on Form 10-K - There were no material changes in the company's exposures to market risk as of the third quarter of 2023[227](index=227&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting identified during the quarter - The CEO and CFO believe the company's disclosure controls and procedures are effective[228](index=228&type=chunk) - No material changes to internal control over financial reporting were identified during the third quarter of 2023[229](index=229&type=chunk) [Part II: Other Information](index=54&type=section&id=Part%20II%3A%20Other%20Information) [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in significant legal disputes regarding the Omni merger, including a shareholder complaint seeking a vote and Omni's complaint alleging breach of agreement and seeking to compel closing - A shareholder complaint was filed seeking to enjoin the Omni merger until a shareholder vote is held, with a temporary restraining order initially issued but later dissolved[231](index=231&type=chunk) - On October 31, 2023, Omni filed a complaint against Forward Air, alleging a breach of the merger agreement and seeking to compel the company to close the transaction[232](index=232&type=chunk) - Forward Air believes Omni has not complied with certain obligations under the merger agreement, and as a result, the company is not obligated to close the transaction and intends to vigorously defend its rights[232](index=232&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) New risk factors primarily relate to the pending Omni merger, encompassing potential litigation costs, integration challenges, failure to realize benefits, expanded international operational risks, and substantial Tax Receivable Agreement payment obligations - Ongoing legal disputes with Omni regarding the merger could incur substantial costs, divert management's attention, and adversely affect business and financial results[236](index=236&type=chunk) - There is a risk of failing to realize the projected benefits and cost savings of the Omni combination due to integration challenges, potential loss of key employees or customers, and unforeseen liabilities[238](index=238&type=chunk)[239](index=239&type=chunk) - The combined company's expanded international operations will expose it to increased risks, including foreign currency fluctuations, political instability, and complex compliance with foreign laws and trade regulations[244](index=244&type=chunk)[255](index=255&type=chunk) - The merger may not be completed due to failure to satisfy closing conditions, and the pending transaction creates business uncertainty that could adversely affect relationships with customers and suppliers[259](index=259&type=chunk)[265](index=265&type=chunk) - The company will be required to make potentially substantial payments to Omni holders under a Tax Receivable Agreement for certain tax savings it may realize post-merger[277](index=277&type=chunk)[278](index=278&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2023, the company repurchased **124,026** common shares at an average price of **$113.05**, with approximately **1.35 million** shares remaining authorized under the 2019 Repurchase Plan Issuer Purchases of Equity Securities (Q3 2023) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2023 | 86,609 | $112.18 | | August 2023 | 37,417 | $115.07 | | September 2023 | 0 | N/A | | **Total** | **124,026** | **$113.05** | - As of September 30, 2023, **1,349,041** shares may yet be purchased under the 2019 Repurchase Plan[280](index=280&type=chunk) [Other Information](index=65&type=section&id=Item%205.%20Other%20Information) During the third quarter of 2023, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the three months ended September 30, 2023[283](index=283&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Agreement and Plan of Merger with Omni, the company's charter and bylaws, and certifications from the Principal Executive Officer and Principal Financial Officer

Financial Data and Key Metrics Changes - The company experienced a weak July with negative year-over-year volume trends, but saw a turnaround with flat trends in August and positive trends in September, with October showing further improvements [39] - The company is focusing on cost management as a top priority to redirect resources into direct services, indicating a stable investment percentage of overall revenue [2][3] Business Line Data and Key Metrics Changes - The company is building out its direct sales force significantly, aiming to access the high-value LTL market, which is estimated at $15 billion, with half of it transacted directly and the other half through intermediaries [40][77] - Domestic forwarder customers have increased their usage of the company's services by 14% since the acquisition announcement on August 10, indicating strong relationships and effective service delivery [13] Market Data and Key Metrics Changes - The LTL environment is showing signs of improvement compared to the previous quarters, with a better outlook for the fourth quarter than in the past six months [25][39] - The company noted that the overall freight environment remains weak, but there is momentum in high-value LTL freight, particularly in industrial sectors [24] Company Strategy and Development Direction - The company is committed to a "Grow Forward" strategy, focusing on high-value freight with appropriate pricing and superior service, while also ensuring corporate clarity by making LTL its own reporting segment starting Q1 2024 [40][42] - The company plans to accelerate its portfolio review to ensure supporting business lines are essential to the LTL business, with a focus on organic growth rather than acquisitions [26][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current freight recession and emphasized the importance of maintaining strong relationships with domestic forwarders while expanding direct sales [10][71] - The company anticipates a general rate increase (GRI) in February 2024, with expected ranges between 5.9% and 7.9% based on historical data [75] Other Important Information - The company is making significant investments in technology and operational efficiency to maintain its leading position in service quality, including safety and terminal flow improvements [20][21] - The company is currently navigating legal issues related to the Omni acquisition, with management expressing confidence that conditions for closing have not been met, allowing for potential termination of the deal [57][64] Q&A Session All Questions and Answers Question: Concerns from core legacy customers - Management noted that core customers are primarily concerned about support and preferential treatment following the acquisition announcement, and emphasized the importance of measurable results in maintaining these relationships [11][12] Question: Direct sales strategy and investments - Management confirmed that while the direct sales strategy is being expanded, it will not be an investment year, focusing instead on reallocating resources to build the direct sales force [52][53] Question: Future guidance and margin assumptions - Management provided insights into expected margins, indicating that Q4 is anticipated to be similar to Q3, with a muted peak for LTL business and a decline in intermodal due to seasonality [31][32] Question: Impact of Yellow's dislocation on business - Management acknowledged that the dislocation from Yellow has provided some volume opportunities, but emphasized that the company has been less of a beneficiary compared to larger class rate companies [73][74] Question: General rate increase for 2024 - Management confirmed that a GRI will be implemented in February 2024, providing predictability for business partners, with expected increases based on historical trends [75]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-22490 FORWARD AIR CORPORATION (Exact name of registrant as specified in its charter) | Tennessee | 62-1120025 | | --- | --- | | (State or other jurisdiction of incorporation) | ...

Forward Air Corporation (NASDAQ:FWRD) Q2 2023 Earnings Conference Call August 3, 2023 9:00 AM ET Company Participants Thomas Schmitt - President, CEO & Chairman Rebecca Garbrick - CFO & Treasurer Conference Call Participants Jack Atkins - Stephens Inc. Scott Group - Wolfe Research Bascome Majors - Susquehanna Stephanie Moore - Jefferies Andrew Cox - Stifel Christopher Kuhn - the Benchmark Company Operator Thank you for joining Forward Air Corporation’s Second Quarter 2023 Earnings Release Conference Call. B ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-22490 FORWARD AIR CORPORATION (Exact name of registrant as specified in its charter) | Tennessee | | | 62-1120025 | | --- | --- | --- | --- | | (State or other jurisdiction of ...

Economic Sensitivity and Market Conditions - The company is sensitive to overall economic conditions, which could materially reduce freight volumes and adversely affect operating results and growth potential [90]. - Inflation has significantly increased operating expenses, impacting profitability, particularly in areas such as equipment prices, fuel costs, and employee wages [92]. - The company faces risks related to fluctuating fuel prices, which can impact operating margins and profitability, especially in the LTL business [95]. - The company faces significant competition in the freight transportation industry, which is highly fragmented and may lead to downward pricing pressures [116]. - The trucking industry has seen significant increases in liability insurance costs, which may lead the company to adjust its insurance coverage or increase deductibles [137]. - The company operates in a regulated industry, with potential increased compliance costs or liabilities impacting financial performance [140]. Customer Dependency and Revenue Risks - The company’s top ten customers accounted for approximately 31% of total revenue, indicating a significant dependency on a few major clients [106]. - Increased direct sales efforts to shippers could harm relationships with current customers and adversely affect revenues [118]. Operational Challenges and Resource Management - The company may encounter difficulties in attracting and retaining qualified freight handlers, which could increase operating costs and affect service delivery [96]. - Labor shortages and increased turnover rates may result in higher costs, negatively impacting the company's ability to operate efficiently and meet customer demands [111]. - The company’s operating results are typically weaker in the first and second quarters compared to the third and fourth quarters, influenced by seasonal trends and external factors such as economic conditions and customer demand [108]. - Harsh weather conditions and disasters can disrupt operations, leading to increased operating expenses and potential revenue decreases due to delivery halts [109]. - The company’s growth strategy includes increasing freight volume and expanding service offerings, which places demands on management and operational resources [93]. Financial and Investment Considerations - Future acquisitions are part of the growth strategy, but successful integration and realization of anticipated benefits remain uncertain [99]. - The company has $154,801 million in net definite-lived intangible assets and $306,184 million in goodwill on its consolidated balance sheet as of December 31, 2022, which are subject to impairment reviews [114][115]. - The company has approximately $108,500 in borrowings under its credit facility, with a hypothetical 150 basis point increase in borrowing rates potentially increasing annual interest expense by $2,157 [247]. - Finance lease obligations amount to $23,794 as of December 31, 2022, bearing fixed interest rates, thus presenting no market risk exposure [248]. Risk Management and Compliance - Regulatory changes regarding the classification of independent contractors could expose the company to additional liabilities and operational costs [101]. - Cybersecurity risks, including past ransomware incidents, pose a threat to the company's operations and could result in significant costs and reputational damage [126][128]. - Regulatory compliance related to property damage and personal injury claims could significantly reduce earnings and disrupt operations [130]. - The company retains risk retention for vehicle liability insurance coverage up to $10,000, with specific amounts for different business segments: $5,000 for LTL, $2,000 for Truckload, and $1,000 for Intermodal [132]. - The company faces potential claims for "negligent selection" of contracted carriers, maintaining third-party liability insurance with a $100 deductible per occurrence [134]. - The self-insured retention for workers' compensation insurance is $500 per occurrence, with the risk of increased claims affecting profitability [134]. Technology and Innovation - The company’s ability to adapt to changing technology demands is crucial for maintaining competitive advantage and preventing revenue declines [122]. - The FMCSA's CSA and SMS initiatives could affect the company's ability to hire qualified drivers, impacting growth projections and customer relationships [146]. Equipment and Supply Chain Issues - The company may experience difficulties in purchasing new equipment due to supply shortages and increased costs, impacting profitability and cash flows [119].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-22490 FORWARD AIR CORPORATION (Exact name of registrant as specified in its charter) | Tennessee | 62-1120025 | | --- | --- | | (State or other jurisdiction of incorporatio ...

Forward Air Corporation. (NASDAQ:FWRD) Q3 2022 Earnings Conference Call October 27, 2022 9:00 AM ET Company Participants Thomas Schmitt - Chief Executive Officer Rebecca Garbrick - Chief Financial Officer Conference Call Participants Bruce Chan - Stifel Todd Fowler - KeyBanc Capital Markets Jack Atkins - Stephens Tyler Brown - Raymond James Christopher Kuhn - The Benchmark Company Stephanie Moore - Jefferies Scott Group - Wolfe Research Bascome Majors - Susquehanna Operator Thank you for joining Forward Air ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2022 | | | Name of each exchange on which | | --- | --- | --- | | Title of each class | Trading Symbol(s) | registered | | Common Stock, $0.01 par value | FWRD | The Nasdaq Stock Market LLC | Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 o ...

Forward Air Corporation (NASDAQ:FWRD) Q2 2022 Earnings Conference Call July 28, 2022 9:00 AM ET Company Participants Tom Schmitt - Chief Executive Officer Rebecca Garbrick - Chief Financial Officer Conference Call Participants Bruce Chan - Stifel Jack Atkins - Stephens Tyler Brown - Raymond James Todd Fowler - KeyBanc Capital Markets Bascome Majors - Susquehanna Operator Thank you for joining Forward Air Corporation’s Second Quarter 2022 Earnings Release Conference Call. Before we begin, I’d like to point o ...