Forward Air Initiates Board Review of Strategic Options to Enhance Shareholder Value 2025
Forward Air Corporation (NASDAQ: FWRD) (the “Company” or “Forward”) announced today that its Board of Directors has launched a comprehensive review of strategic alternatives aimed at maximizing shareholder value. This decision comes as part of an ongoing effort to ensure the Company explores all potential avenues for growth, transformation, and long-term value. The review will encompass a broad range of options, including but not limited to a potential sale, merger, or other strategic and financial transactions. The Board is committed to evaluating each option carefully to determine the most beneficial path forward for the Company, particularly as it continues to expand its footprint in the logistics and transportation sector.
Progress Under New Leadership
George Mayes, Independent Chairman of Forward’s Board of Directors, expressed confidence in the company’s direction under its new leadership team. He highlighted the company’s recent achievements in integrating Omni Logistics and surpassing synergy targets ahead of schedule. The integration of Omni, which was previously acquired by Forward, is seen as a key element in the company’s transformation into a global logistics powerhouse. These efforts, he explained, are pivotal to stabilizing the business while positioning it for long-term growth. The transformation process is expected to evolve Forward Air into a more integrated and efficient company, capable of delivering exceptional service across diverse markets.
“Under Forward Air’s new leadership team, the Company is making tangible progress executing the Omni integration and delivering on synergy targets ahead of schedule, while stabilizing the business and advancing the early stages of transforming the Company to become a global logistics powerhouse through the implementation of its strategic plan,” said Mayes. He continued by emphasizing that while the company is still in the early stages of transformation, the Board and management team are taking proactive steps to ensure they explore the most advantageous course of action to create shareholder value. As part of this, the Board has decided to formally explore a wide range of strategic alternatives, making it clear that the goal is to maximize value for all shareholders.
Regardless of the outcome of the strategic review process, Mayes reaffirmed that Forward’s commitment to its customers would remain unchanged. “Regardless of the outcome of this review, Forward will not waver in its commitment to our customers to deliver consistent high-quality service,” he stated.
A Focus on Long-Term Value Creation
While the strategic review is underway, the Board has not set a definitive timetable for its completion, and no final decisions have been made regarding the potential for any transactions. Furthermore, the Company has made it clear that it will not provide ongoing updates regarding the strategic review process unless it determines that further disclosure is necessary or appropriate. This careful approach is consistent with Forward’s ongoing commitment to pursuing the best course of action for its shareholders, employees, and customers alike.
Jamie Pierson, Chief Financial Officer at Forward Air, also weighed in on the review process, noting that the strategic review comes at a time when the Company is working to enhance its financial flexibility. Pierson stated, “This amendment is intended to provide us with additional financial flexibility to continue executing our transformation, regardless of the outcome of the strategic review process.” The CFO also expressed gratitude for the continued support of the Company’s lenders, whose backing is vital to the ongoing transformation and growth of Forward.
As part of this strategic review, the Company is also exploring ways to ensure it can fully capitalize on the immense opportunities available to it in the logistics and transportation sectors. As these transformation initiatives progress, Forward is optimistic that it will be able to grow its market position both in the U.S. and internationally, thanks to the robust financial strategies it is putting in place.
Transformation Efforts Underway
Shawn Stewart, Chief Executive Officer of Forward Air, also provided an update on the Company’s transformation strategy, which is focused on creating an integrated and streamlined operations platform. “During the fourth quarter, we implemented the initial phase of our broader transformation strategy to create a truly integrated and go-to solution provider, and I am very pleased with the pace and rigor we are seeing in the early days,” Stewart said. He explained that the company’s transformation efforts were initially focused on structural changes aimed at simplifying operations and improving support for long-term growth initiatives.
Stewart’s vision for the company involves not only expanding the business but also improving operational efficiency and aligning costs with future growth expectations. He believes that these efforts will enhance Forward’s ability to serve its customers more effectively while positioning the company to capture the full potential of its integrated legacy businesses once market conditions stabilize.
One key initiative in the transformation process is the reduction of operating expenses. In the fourth quarter of 2024, Forward took steps to streamline its operations, including workforce reductions, the consolidation of terminal operations, and a reduction in the reliance on third-party vendors. These changes are expected to yield significant cost savings, with the company anticipating approximately $20 million in annualized savings. This is in addition to the $75 million in synergies from the ongoing integration of Omni Logistics, which are on track to be realized by the end of the first quarter of 2025.
These savings are expected to further strengthen Forward’s financial position, providing the company with the resources it needs to continue investing in its transformation and pursuing its long-term strategic goals.
Financial Outlook and Guidance for 2024
Forward also reaffirmed its full-year 2024 guidance for Consolidated EBITDA, a non-GAAP measure, which is projected to range from $300 million to $310 million. This estimate includes the fourth-quarter reduction in operating expenses of approximately $20 million, which is expected to be a significant contributor to the company’s overall financial performance. The guidance reflects the ongoing efforts to improve operational efficiency and streamline costs, all while maintaining a strong focus on delivering high-quality service to customers.
About Forward Air Corporation
Forward Air is a leading provider of asset-light transportation services across North America, including the United States, Canada, and Mexico. The company offers a wide range of services, such as expedited less-than-truckload (LTL) shipping, local pick-up and delivery, shipment consolidation and deconsolidation, warehousing, and customs brokerage. Forward operates a robust national network of terminals to facilitate these services.
In addition to its core offerings, Forward also provides truckload brokerage services, including dedicated fleet management, and intermodal drayage services for high-value freight moving to and from seaports and railheads. The company also provides dedicated contract services, container freight station warehouse handling, and a comprehensive suite of multimodal solutions globally, thanks to its integration with Omni Logistics.
Omni Logistics itself is a global provider of air, ocean, and ground services tailored for mission-critical freight. The combined capabilities of Forward Air and Omni Logistics make the company well-positioned to continue serving customers across the transportation and logistics sectors, both domestically and internationally.
Conclusion
The announcement of Forward Air’s strategic review process marks an important milestone in the company’s ongoing transformation. With a new leadership team at the helm, significant progress in the integration of Omni Logistics, and a clear focus on long-term growth, Forward is positioning itself to capitalize on new opportunities while staying committed to delivering exceptional service to its customers. The outcome of the strategic review will shape the company’s future, but one thing remains certain: Forward is dedicated to enhancing shareholder value and advancing its position as a leader in the logistics and transportation industries.