TN | 62-1120025 | ||||||||||||||||
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | ||||||||||||||||
1915 Snapps Ferry Road | Building N | Greeneville | TN | 37745 | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
000-22490 | ||
(Commission File Number) |
Not Applicable | ||
(Former name or former address, if changed since last report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, $0.01 par value | FWRD | NASDAQ |
No. | Exhibit | |||||||
104 | Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document) |
FORWARD AIR CORPORATION | |||||||||||
Date: May 8, 2024 |
By: | /s/ Michael L. Hance | |||||||||
Michael L. Hance Chief Legal Officer and Secretary |
Three Months Ended | ||||||||||||||||||||||||||
(in thousands, except per share data) | March 31, 2024 | March 31, 2023 | Change | Percent Change | ||||||||||||||||||||||
Operating revenue | $ | 541,813 | $ | 357,709 | $ | 184,104 | 51.5 | % | ||||||||||||||||||
(Loss) income from operations | $ | (65,732) | $ | 47,196 | $ | (112,928) | (239.3) | % | ||||||||||||||||||
Operating margin | (12.1) | % | 13.2 | % | (2,530) bps | |||||||||||||||||||||
Net (loss) income | $ | (88,794) | $ | 33,904 | $ | (122,698) | (361.9) | % | ||||||||||||||||||
Net (loss) income per diluted share | $ | (2.35) | $ | 1.27 | $ | (3.62) | (285.0) | % | ||||||||||||||||||
Cash (used in) provided by operating activities | $ | (51,719) | $ | 60,839 | $ | (112,558) | (185.0) | % | ||||||||||||||||||
Non-GAAP Financial Measures: 1 |
||||||||||||||||||||||||||
Adjusted income from operations | $ | 12,534 | $ | 47,196 | $ | (34,662) | (73.4) | % | ||||||||||||||||||
Adjusted net (loss) income | $ | (24,172) | $ | 33,904 | $ | (58,076) | (171.3) | % | ||||||||||||||||||
Adjusted net (loss) income per diluted share | $ | (0.64) | $ | 1.27 | $ | (1.91) | (150.4) | % | ||||||||||||||||||
Adjusted EBITDA | $ | 29,390 | $ | 59,568 | $ | (30,178) | (50.7) | % | ||||||||||||||||||
Free cash flow | $ | (55,840) | $ | 56,135 | $ | (111,975) | (199.5) | % | ||||||||||||||||||
1 Reconciliation of these non-GAAP financial measures are provided below the financial tables. | ||||||||||||||||||||||||||
Forward Air Corporation | |||||||||||
Condensed Consolidated Statements of Comprehensive (Loss) Income | |||||||||||
(Unaudited, in thousands, except per share data) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2024 | March 31, 2023 | ||||||||||
Operating revenues: | |||||||||||
Expedited Freight | $ | 273,295 | $ | 269,577 | |||||||
Intermodal | 56,292 | 88,169 | |||||||||
Omni Logistics | 224,838 | — | |||||||||
Eliminations and other operations | (12,612) | (37) | |||||||||
Operating revenues | 541,813 | 357,709 | |||||||||
Operating expenses: | |||||||||||
Purchased transportation | 277,015 | 145,171 | |||||||||
Salaries, wages and employee benefits | 128,867 | 66,647 | |||||||||
Operating leases | 38,803 | 24,073 | |||||||||
Depreciation and amortization | 31,786 | 12,372 | |||||||||
Insurance and claims | 12,881 | 13,258 | |||||||||
Fuel expense | 5,246 | 5,686 | |||||||||
Other operating expenses | 112,947 | 43,306 | |||||||||
Impairment of goodwill, intangibles and other assets | — | — | |||||||||
Total operating expenses | 607,545 | 310,513 | |||||||||
Income (loss) from continuing operations: | |||||||||||
Expedited Freight | 19,498 | 29,685 | |||||||||
Intermodal | 3,586 | 11,203 | |||||||||
Omni Logistics | (28,585) | — | |||||||||
Other Operations | (60,231) | 6,308 | |||||||||
(Loss) income from continuing operations | (65,732) | 47,196 | |||||||||
Other expense: | |||||||||||
Interest expense, net | (40,753) | (2,355) | |||||||||
Foreign exchange loss | (668) | — | |||||||||
Other income, net | 9 | — | |||||||||
Total other expense | (41,412) | (2,355) | |||||||||
(Loss) income before income taxes | (107,144) | 44,841 | |||||||||
Income tax expense | (18,350) | 10,937 | |||||||||
Net (loss) income from continuing operations | (88,794) | 33,904 | |||||||||
Income from discontinued operation, net of tax | — | 2,464 | |||||||||
Net (loss) income | (88,794) | 36,368 | |||||||||
Net loss attributable to Non-controlling interest | (27,082) | — | |||||||||
Net (loss) income attributable to Forward Air | $ | (61,712) | $ | 36,368 | |||||||
Net income per common share: | |||||||||||
Basic net (loss) income per share | |||||||||||
Continuing operations | $ | (2.35) | $ | 1.28 | |||||||
Discontinued operation | — | 0.09 | |||||||||
Basic | $ | (2.35) | $ | 1.37 | |||||||
Diluted net (loss) income per share | |||||||||||
Continuing operations | $ | (2.35) | $ | 1.27 | |||||||
Discontinued operation | — | 0.09 | |||||||||
Diluted | $ | (2.35) | $ | 1.37 | |||||||
Dividends per share: | $ | — | $ | 0.24 | |||||||
Net (loss) income | $ | (88,794) | $ | 36,368 | |||||||
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustments | (151) | — | |||||||||
Comprehensive (loss) income | $ | (88,945) | $ | 36,368 |
Expedited Freight Segment Information | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||
March 31, 2024 | Percent of Revenue | March 31, 2023 | Percent of Revenue | Change | Percent Change | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||
Network 1 |
$ | 214,493 | 78.5 | % | $ | 205,931 | 76.4 | % | $ | 8,562 | 4.2 | % | |||||||||||||||||||||||
Truckload | 37,055 | 13.6 | 41,744 | 15.5 | (4,689) | (11.2) | |||||||||||||||||||||||||||||
Other | 21,747 | 8.0 | 21,902 | 8.1 | (155) | (0.7) | |||||||||||||||||||||||||||||
Total operating revenues | 273,295 | 100.0 | 269,577 | 100.0 | 3,718 | 1.4 | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Purchased transportation | 127,760 | 46.7 | 125,194 | 46.4 | 2,566 | 2.0 | |||||||||||||||||||||||||||||
Salaries, wages and employee benefits | 62,553 | 22.9 | 55,918 | 20.7 | 6,635 | 11.9 | |||||||||||||||||||||||||||||
Operating leases | 14,982 | 5.5 | 15,738 | 5.8 | (756) | (4.8) | |||||||||||||||||||||||||||||
Depreciation and amortization | 10,290 | 3.8 | 7,626 | 2.8 | 2,664 | 34.9 | |||||||||||||||||||||||||||||
Insurance and claims | 10,652 | 3.9 | 9,219 | 3.4 | 1,433 | 15.5 | |||||||||||||||||||||||||||||
Fuel expense | 2,581 | 0.9 | 2,513 | 0.9 | 68 | 2.7 | |||||||||||||||||||||||||||||
Other operating expenses | 24,979 | 9.1 | 23,684 | 8.8 | 1,295 | 5.5 | |||||||||||||||||||||||||||||
Total operating expenses | 253,797 | 92.9 | 239,892 | 89.0 | 13,905 | 5.8 | |||||||||||||||||||||||||||||
Income from operations | $ | 19,498 | 7.1 | % | $ | 29,685 | 11.0 | % | $ | (10,187) | (34.3) | % | |||||||||||||||||||||||
1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue. |
Expedited Freight Operating Statistics | |||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, 2024 | March 31, 2023 | Percent Change | |||||||||||||||
Business days | 64 | 64 | — | % | |||||||||||||
Tonnage 1,2 |
|||||||||||||||||
Total pounds | 684,995 | 629,080 | 8.9 | ||||||||||||||
Pounds per day | 10,703 | 9,829 | 8.9 | ||||||||||||||
Shipments 1,2 |
|||||||||||||||||
Total shipments | 828 | 817 | 1.4 | ||||||||||||||
Shipments per day | 12.9 | 12.8 | 1.4 | ||||||||||||||
Weight per shipment | 827 | 770 | 7.4 | ||||||||||||||
Revenue per hundredweight 3 |
$ | 31.32 | $ | 33.36 | (6.1) | ||||||||||||
Revenue per hundredweight, ex fuel 3 |
$ | 24.15 | $ | 25.75 | (6.2) | ||||||||||||
Revenue per shipment 3 |
$ | 259.14 | $ | 256.89 | 0.9 | ||||||||||||
Revenue per shipment, ex fuel 3 |
$ | 199.78 | $ | 198.30 | 0.7 | ||||||||||||
1 In thousands | |||||||||||||||||
2 Excludes accessorial and Truckload and products | |||||||||||||||||
3 Includes intercompany revenue between the Network and Truckload revenue streams | |||||||||||||||||
Intermodal Segment Information | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||
March 31, 2024 | Percent of Revenue | March 31, 2023 | Percent of Revenue | Change | Percent Change | ||||||||||||||||||||||||||||||
Operating revenue | $ | 56,292 | 100.0 | % | $ | 88,169 | 100.0 | % | $ | (31,877) | (36.2) | % | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Purchased transportation | 17,443 | 31.0 | 20,014 | 22.7 | (2,571) | (12.8) | |||||||||||||||||||||||||||||
Salaries, wages and employee benefits | 15,082 | 26.8 | 18,914 | 21.5 | (3,832) | (20.3) | |||||||||||||||||||||||||||||
Operating leases | 4,692 | 8.3 | 8,335 | 9.5 | (3,643) | (43.7) | |||||||||||||||||||||||||||||
Depreciation and amortization | 4,627 | 8.2 | 4,746 | 5.4 | (119) | (2.5) | |||||||||||||||||||||||||||||
Insurance and claims | 2,606 | 4.6 | 2,349 | 2.7 | 257 | 10.9 | |||||||||||||||||||||||||||||
Fuel expense | 2,361 | 4.2 | 3,173 | 3.6 | (812) | (25.6) | |||||||||||||||||||||||||||||
Other operating expenses | 5,895 | 10.5 | 19,435 | 22.0 | (13,540) | (69.7) | |||||||||||||||||||||||||||||
Total operating expenses | 52,706 | 93.6 | 76,966 | 87.3 | (24,260) | (31.5) | |||||||||||||||||||||||||||||
Income from operations | $ | 3,586 | 6.4 | % | $ | 11,203 | 12.7 | % | $ | (7,617) | (68.0) | % | |||||||||||||||||||||||
Intermodal Operating Statistics | |||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, 2024 | March 31, 2023 | Percent Change | |||||||||||||||
Drayage shipments | 62,659 | 72,465 | (13.5) | % | |||||||||||||
Drayage revenue per shipment | $ | 822 | $ | 1,136 | (27.6) | % | |||||||||||
Omni Logistics Segment Information | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2024 | Percent of Revenue | ||||||||||
Operating revenue | $ | 224,838 | 100.0 | % | |||||||
Operating expenses: | |||||||||||
Purchased transportation | 144,424 | 64.2 | |||||||||
Salaries, wages and employee benefits | 48,775 | 21.7 | |||||||||
Operating leases | 19,127 | 8.5 | |||||||||
Depreciation and amortization | 16,869 | 7.5 | |||||||||
Insurance and claims | 2,053 | 0.9 | |||||||||
Fuel expense | 304 | 0.1 | |||||||||
Other operating expenses | 21,871 | 9.7 | |||||||||
Total operating expenses | 253,423 | 112.7 | |||||||||
Loss from operations | $ | (28,585) | (12.7) | % | |||||||
Forward Air Corporation | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 172,270 | $ | 121,969 | |||||||
Restricted cash equivalents | — | 39,604 | |||||||||
Accounts receivable, net | 351,813 | 153,267 | |||||||||
Other receivables | 1,539 | 5,408 | |||||||||
Prepaid expenses | 39,512 | 25,682 | |||||||||
Other current assets | 4,299 | 1,098 | |||||||||
Total current assets | 569,433 | 347,028 | |||||||||
Noncurrent restricted cash equivalents | — | 1,790,500 | |||||||||
Property and equipment | 591,562 | 508,280 | |||||||||
Less accumulated depreciation and amortization | 263,856 | 250,185 | |||||||||
Property and equipment, net | 327,706 | 258,095 | |||||||||
Operating lease right-of-use assets | 334,262 | 111,552 | |||||||||
Goodwill | 1,379,180 | 278,706 | |||||||||
Other acquired intangibles, net | 1,264,428 | 134,789 | |||||||||
Other assets | 84,251 | 58,863 | |||||||||
Total assets | $ | 3,959,260 | $ | 2,979,533 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 130,646 | $ | 45,430 | |||||||
Accrued expenses | 118,955 | 62,948 | |||||||||
Other current liabilities | 73,461 | 71,727 | |||||||||
Current portion of debt and finance lease obligations | 28,134 | 12,645 | |||||||||
Current portion of operating lease liabilities | 93,645 | 44,344 | |||||||||
Total current liabilities | 444,841 | 237,094 | |||||||||
Finance lease obligations, less current portion | 34,306 | 26,736 | |||||||||
Long-term debt, less current portion | 1,664,107 | — | |||||||||
Long-term debt held in escrow | — | 1,790,500 | |||||||||
Operating lease liabilities, less current portion | 246,956 | 71,598 | |||||||||
Liabilities under tax receivable agreement | 13,270 | — | |||||||||
Other long-term liabilities | 45,536 | 47,144 | |||||||||
Deferred income taxes | 177,806 | 42,200 | |||||||||
Shareholders’ equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | 265 | 257 | |||||||||
Additional paid-in capital | 508,675 | 283,684 | |||||||||
Retained earnings | 417,282 | 480,320 | |||||||||
Accumulated other comprehensive loss | (151) | — | |||||||||
Total shareholders’ equity attributable to Forward Air | 926,071 | 764,261 | |||||||||
Noncontrolling interest | 406,367 | — | |||||||||
Total shareholders’ equity | 1,332,438 | 764,261 | |||||||||
Total liabilities and shareholders’ equity | $ | 3,959,260 | $ | 2,979,533 |
Forward Air Corporation | |||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2024 | March 31, 2023 | ||||||||||
Operating activities: | |||||||||||
Net (loss) income from continuing operations | $ | (88,794) | $ | 33,904 | |||||||
Adjustments to reconcile net (loss) income of continuing operations to net cash (used in) provided by operating activities of continuing operations | |||||||||||
Depreciation and amortization | 31,786 | 12,372 | |||||||||
Share-based compensation expense | 1,567 | 2,906 | |||||||||
Provision for revenue adjustments | 1,038 | 1,098 | |||||||||
Deferred income tax expense | 2,945 | 1,857 | |||||||||
Other | 4,169 | (1,091) | |||||||||
Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses: | |||||||||||
Accounts receivable | (20,495) | 16,397 | |||||||||
Other receivables | 5,367 | — | |||||||||
Other current and noncurrent assets | (7,104) | 10,910 | |||||||||
Accounts payable and accrued expenses | 17,802 | (17,514) | |||||||||
Net cash (used in) provided by operating activities of continuing operations | (51,719) | 60,839 | |||||||||
Investing activities: | |||||||||||
Proceeds from sale of property and equipment | 849 | 1,815 | |||||||||
Purchases of property and equipment | (4,970) | (6,519) | |||||||||
Purchases of a business, net of cash acquired | (1,565,242) | (56,567) | |||||||||
Other | (89) | — | |||||||||
Net cash used in investing activities of continuing operations | (1,569,452) | (61,271) | |||||||||
Financing activities: | |||||||||||
Repayments of finance lease obligations | (4,560) | (2,086) | |||||||||
Proceeds from credit facility | — | 45,000 | |||||||||
Payments on credit facility | (80,000) | — | |||||||||
Payment of debt issuance costs | (60,591) | — | |||||||||
Payment of earn-out liability | (12,247) | — | |||||||||
Payments of dividends to shareholders | — | (6,345) | |||||||||
Repurchases and retirement of common stock | — | (54,783) | |||||||||
Payment of minimum tax withholdings on share-based awards | (1,328) | — | |||||||||
Contributions from subsidiary held for sale | — | 4,852 | |||||||||
Net cash used in financing activities of continuing operations | (158,726) | (13,362) | |||||||||
Effect of exchange rate changes on cash | 94 | — | |||||||||
Net decrease in cash and cash equivalents from continuing operations | (1,779,803) | (13,794) | |||||||||
Cash from discontinued operation: | |||||||||||
Net cash provided by operating activities of discontinued operation | — | 5,154 | |||||||||
Net cash used in investing activities of discontinued operation | — | (270) | |||||||||
Net cash used in financing activities of discontinued operation | — | (4,884) | |||||||||
Net decrease in cash and cash equivalents | (1,779,803) | (13,794) | |||||||||
Cash and cash equivalents at beginning of period of continuing operations | 1,952,073 | 45,822 | |||||||||
Cash at beginning of period of discontinued operation | — | — | |||||||||
Net decrease in cash and cash equivalents | (1,779,803) | (13,794) | |||||||||
Less: cash at end of period of discontinued operation | — | — | |||||||||
Cash and cash equivalents at end of period of continuing operations | $ | 172,270 | $ | 32,028 | |||||||
Three Months Ended | ||||||||||||||
March 31, 2024 | March 31, 2023 | |||||||||||||
Net (loss) income | $ | (88,794) | $ | 33,904 | ||||||||||
Interest expense | 40,753 | 2,355 | ||||||||||||
Income tax (benefit) expense | (18,350) | 10,937 | ||||||||||||
Depreciation and amortization | 31,786 | 12,372 | ||||||||||||
Reported EBITDA | (34,605) | 59,568 | ||||||||||||
Transaction and integration costs | 58,226 | — | ||||||||||||
Severance costs | 5,769 | — | ||||||||||||
Adjusted EBITDA | $ | 29,390 | $ | 59,568 | ||||||||||
Forward Air Corporation (excluding Omni Logistics) | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, 2024 | March 31, 2023 | Change | Percent Change | ||||||||||||||||||||
Operating revenue | $ | 329,565 | $ | 357,709 | $ | (28,144) | (8) | % | |||||||||||||||
Consolidated EBITDA | $ | (34,605) | $ | 59,568 | |||||||||||||||||||
Omni Logistics - Income from Operations | 28,585 | — | |||||||||||||||||||||
Omni Logistics - Depreciation and Amortization | (16,869) | — | |||||||||||||||||||||
Reported EBITDA | (22,889) | 59,568 | |||||||||||||||||||||
Transaction and integration costs | 58,226 | — | |||||||||||||||||||||
Adjusted EBITDA | $ | 35,337 | $ | 59,568 | (24,231) | (41) | % | ||||||||||||||||
Three Months Ended | ||||||||||||||
March 31, 2024 | March 31, 2023 | |||||||||||||
Net cash (used in) provided by operating activities of continuing operations | $ | (51,719) | $ | 60,839 | ||||||||||
Proceeds from sale of property and equipment | 849 | 1,815 | ||||||||||||
Purchases of property and equipment | (4,970) | (6,519) | ||||||||||||
Free cash flow | $ | (55,840) | $ | 56,135 | ||||||||||
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||
Loss From Operations | Net Loss1 |
Net Loss Per Diluted Share1 |
Income From Operations | Net Income | Net Income Per Diluted Share | |||||||||||||||||||||||||||||||||
As Reported | $ | (65,732) | $ | (88,794) | $ | (2.35) | $ | 47,196 | $ | 33,904 | $ | 1.27 | ||||||||||||||||||||||||||
Transaction and integration costs | 58,226 | 48,076 | 1.27 | — | — | — | ||||||||||||||||||||||||||||||||
Severance | 5,769 | 4,763 | 0.13 | — | — | — | ||||||||||||||||||||||||||||||||
Acquisition amortization | 14,271 | 11,783 | 0.31 | — | — | — | ||||||||||||||||||||||||||||||||
As Adjusted | $ | 12,534 | $ | (24,172) | $ | (0.64) | $ | 47,196 | $ | 33,904 | $ | 1.27 | ||||||||||||||||||||||||||
1 Net loss and net loss per diluted share amounts are based on the after-tax effect of each item. The income tax effect is calculated by applying the effective tax rate to the pre-tax amount. The total tax benefit effect of the above item is $13,643. | ||||||||||||||||||||||||||||||||||||||