Forward Air(US:FWRD)2024-08-09 14:33Financial Performance - The company reported operating revenue of $311,856,000 for the three months ended June 30, 2024, with total operating expenses amounting to $1,417,727,000, resulting in a loss from operations of $(1,105,871,000) [115] - Total operating expenses for the six months ended June 30, 2024, were $1,671,150,000, with a loss from operations of $(1,134,456,000) [117] - Income from operations decreased by $1,122,080, or 4,262.4%, resulting in a loss of $1,095,755 for the three months ended June 30, 2024, compared to income of $26,325 for the same period in 2023 [123] - Net loss attributable to Forward Air was $645,433 for the three months ended June 30, 2024, compared to net income of $19,951 for the same period in 2023, marking a decrease of $665,384 [120] - Net income decreased by $1,116,460, or 1,982.4%, resulting in a net loss of $1,060,141 for the six months ended June 30, 2024, compared to a net income of $56,319 for the same period in 2023 [153] Revenue and Segment Performance - Operating revenues increased by $310,044, or 92.9%, to $643,666 for the three months ended June 30, 2024, compared to $333,622 for the same period in 2023 [121] - The Omni Logistics segment contributed $311,856 to operating revenues, while the Expedited Freight segment saw an increase of $21,846, offset by a decrease of $4,952 in the Intermodal segment [121] - Total operating revenues for the Expedited Freight segment were $564,577, a 4.7% increase from $539,013 in the prior year [156] - Expedited Freight operating revenues increased by $25,564, or 4.7%, to $564,577 for the six months ended June 30, 2024, driven by a 7.3% increase in tonnage [160] - Intermodal operating revenues decreased by $36,829, or 24.2%, to $115,591, primarily due to a 9.3% decrease in drayage shipments [172] Expenses and Costs - Operating expenses surged by $1,432,124, or 466.0%, to $1,739,421 for the three months ended June 30, 2024, primarily due to $1,417,727 in expenses from the Omni Logistics segment, including an impairment charge of $1,092,714 [122] - Operating expenses surged by $1,729,156, or 279.9%, to $2,346,966 for the six months ended June 30, 2024, primarily due to $1,671,150 in expenses from the Omni Logistics segment, including a goodwill impairment charge of $1,092,714 [149] - Interest expense increased to $47,265 for the three months ended June 30, 2024, from $2,585 in the same period in 2023, driven by higher borrowings and an increase in the average interest rate [124] - Interest expense increased to $88,018 for the six months ended June 30, 2024, compared to $4,940 for the same period in 2023, due to higher variable interest rates [151] Acquisitions and Strategic Initiatives - The Omni Acquisition was completed on January 25, 2024, for a total consideration of $100,499,000 in cash and 14,015 shares of common stock [114] - The company plans to grow its LTL geographic footprint through greenfield start-ups and acquisitions, focusing on increasing density within its existing network [99] - The company incurred significant indebtedness in connection with the Omni Acquisition, which could impact future business operations [187] - The company has a Tax Receivable Agreement obligating it to pay certain Omni Holders 83.5% of tax benefits realized from the Omni Acquisition [198] Operational Metrics - The average length of haul is used to analyze tonnage and pricing trends, with changes directly affecting revenue per hundredweight [106] - The total number of shipments in the Expedited Freight segment increased by 2.4% to 1,698 for the six months ended June 30, 2024 [158] - Revenue per shipment in the Expedited Freight segment increased by 2.5% to $257.94 for the six months ended June 30, 2024 [158] Cash Flow and Financing Activities - Net cash used in operating activities of continuing operations was $96,924 for the six months ended June 30, 2024, compared to net cash provided of $117,454 for the same period in 2023 [200] - Net cash used in investing activities was $1,583,406 for the six months ended June 30, 2024, primarily due to the Omni Acquisition with a preliminary purchase price of $2,313,653 [201] - Net cash used in financing activities was $162,957 for the six months ended June 30, 2024, an increase from $74,627 in the same period of 2023 [202] Market Conditions and Risks - The company experienced a slowdown in global economic activity, leading to a softening of customer demand and declines in rates during 2023 [111] - Risks identified that could affect future results include economic factors such as inflation, interest rates, and competition, which may impact the company's growth and financial condition [208] - As of the first quarter of 2024, there were no material changes in the company's exposure to market risk [210]