Forward Air Corporation (NASDAQ:FWRD) (the “Company”, “Forward”, “we”, “our”, or “us”) today reported financial results for the three months ended March 31, 2024 as presented in the tables below on a continuing operations basis (Final Mile is being reported as a discontinued operations).
Recently appointed Chief Executive Officer Shawn Stewart, said, “It is a privilege to be leading Forward during this pivotal time. Together, Forward and Omni have created an industry leader dedicated to delivering world-class service to customers. Forward excels at providing best-in-class premium less-than-truckload service to an attractive and broad customer base, while Omni provides custom supply chain solutions across multiple service modes to domestic and international customers. Together, Forward and Omni, provide customers a seamless partnership and flawless execution for their time-sensitive and mission-critical freight.”
Mr. Stewart continued, “I see tremendous opportunity for the combined entity to maximize value for customers, employees and shareholders. I am committed to aggressively taking action to improve profitability, maximize synergy capture and drive our leadership in global supply chain and domestic transportation services. With the distractions of the deal closing behind us, our team is focused on execution. I look forward to sharing our progress along the next phase of our journey. To that end, we look forward to sharing our full year 2024 guidance and our path to achievement on our second quarter earnings call.”
Rebecca J. Garbrick, Chief Financial Officer, said, “Our first quarter results did not meet our expectations. We continue to face challenging market conditions, characterized by weak freight demand, excess carrier capacity, and pressure on pricing. Omni’s first quarter results were more adversely impacted as a result of its exposure to the international freight market. While these conditions led to decreased customer demand for our intermodal, truckload brokerage and Omni lines of business, we saw momentum in our less-than-truckload line of business where we experienced positive volume trends and improved freight quality metrics. In the first quarter, our shipments per day growth was +1.4%, weight per shipment was +7.4%, and revenue per shipment excluding fuel was +0.7% over the same period in the prior year. Unfortunately, this momentum did not offset softer demand for our intermodal and truckload brokerage services, resulting in an 8% decline in revenues and 41% decline in adjusted EBITDA on a continuing operations basis over the same period in the prior year, excluding the results of Omni. From the acquisition date, January 25, 2024, through the end of the quarter, Omni contributed $225 million in revenues and $(5.9) million in adjusted EBITDA.”
Ms. Garbrick continued, “Our first quarter results are not indicative of what we expect for 2024, and we are taking aggressive steps to improve profitability. One early positive indicator is the sequential growth in revenue as reflected in our preliminary April results. From the month of March 2024 to April 2024, we saw sequential revenue growth of 6% as compared to a sequential decline in revenue from March to April of (15%) over the same period in the prior year. We are also successfully executing on the cost synergies associated with the Omni transaction, which are in line with initial diligence estimates. While our first quarter EBITDA was not reflective of run-rate synergies, we expect to see a steady increase in subsequent quarters until synergies are fully realized by the end of 2025.”
| 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. | ||||||||||||||
Review of Financial Results
Forward Air will hold a conference call to discuss first quarter 2024 results on Thursday, May 9, 2024 at 10:00 a.m. ET. An Earnings Presentation has been posted online on the Investor Relations portion of the Company’s website at ir.forwardaircorp.com, and will be referenced during the conference call. The Company’s conference call will be available online on the Investor Relations portion of the Company’s website at ir.forwardaircorp.com, or by dialing (877) 876-9173, Access Code: FWRDQ124.
A replay of the conference call will be available on the Investor Relations portion of the Company’s website at www.forwardaircorp.com, which we use as a primary mechanism to communicate with our investors. Investors are urged to monitor the Investor Relations portion of the Company’s website to easily find or navigate to current and pertinent information about us.