At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. I would now like to turn the call over to Michael Hance, Chief Legal Officer.

Good morning, and thank you, operator, and thanks, everyone, for joining the call today. Before we jump in, I just wanted to take a moment to thank our teammates, customers, and shareholders, many of whom are on the call today for the incredible support over the last several months as I served as Interim CEO. In particular, I want to acknowledge the employees, independent contractors, and drivers who have been and continue to work tirelessly to provide best-in-class service to our customers and make this combination that we're working on a success. I'm humbled by what you do, and I am so grateful for your hard work. Thank you. Last quarter, I told you that my mandate as interim CEO was to provide the appropriate leadership while our teams continue to work through the integration of Forward and Omni. At the same time, our Board's dedicated search committee was focused on promptly identifying a top-quality CEO to run the Company during the next phase of our growth and development. That work is done, and I personally couldn't be more pleased with the outcome. I'm thrilled to introduce you to Shawn Stewart, who began his tenure as CEO of Forward on April 28. The Board and our advisers conducted a thorough search and are confident Shawn is the right leader to drive Forward's future success. He knows this industry inside and out and has a demonstrated track record of successfully delivering growth, operational excellence, and profitability. As an 18-year veteran of Forward who cares deeply about the Company's success, I'm personally committed to ensuring Shawn hits the ground running as I return to my role as Chief Legal Officer and Secretary. And I know all of our teammates share that same commitment. I'll close by reiterating that we recognize these past few months have been bumpy as we navigated turbulence in the freight market and within our company. Our team is confident that is behind us, and we are all united and energized by the opportunities ahead. With that, please allow me to turn it over to Shawn for his remarks before Rebecca runs us through the numbers. Shawn?

Thank you, Michael, and thank you to those on the call who have provided a warm welcome and words of encouragement as I assume my new role a week ago, Monday. I won't go into more details about my background as I'm sure you've all seen the press release. But let me just say that I couldn't be more excited to join Forward at this critical juncture. The addition of Omni paves the way for the Company to become a market leader in global supply chain as we leverage the new capabilities while enhancing our best-in-class expedited LTL and other round services. I'm going to pass the call to Rebecca in a moment to provide you with details about our financial results. Given that I've been here less than two weeks, I'm not going to speak too much, except to say that these results are not indicative of what you will see from us the rest of the year. We are headed up and onward from this day. I also want to share my view about the context of the Company's Q1 performance, which I think is important to keep in mind. Our first quarter results were negatively impacted by two really tough headwinds. First, these results were generated in a weak freight environment. Second, I'm convinced that these results reflect the impact of the distraction by the challenging circumstances leading up to the closing of the Omni transaction. I wasn't here, but you don't have to ride a roller coaster to know that people riding the roller coaster probably aren't focused on much else. Since closing, Michael and the team have done a great job pushing forward with integrating two companies and capturing synergies, which you will hear more about later. But I think it's really unrealistic to think that the ups and downs of the months leading to closing are reflected in our Q1 performance. Thankfully, that distraction is behind us now. As I mentioned, it is premature for me to start talking about Forward's numbers, but today I want to commit to two things. First, as I said earlier, we are headed up from here. When we are back on this call at the end of the second quarter, I believe we will be talking about different results that show significant improvement. I need a little bit more time before we are ready to give you targets, but I can tell you that in my first days with the team, we are focused on accelerating synergy capture and identifying opportunities to eliminate significant costs from our structure. We are going to aggressively and urgently address our profitability issues, and I fully expect us to be a category leader in our space with corresponding financial results. Second, we are going to enhance our investor communications to ensure that we are clear, transparent and comprehensive with our data and communication. You should expect to see steady improvement in information flow over the next couple of quarters, providing you with the financial information that you need and want. Starting with our second quarter earnings release, we will provide full year 2024 guidance and information about our path to achievement. Why am I confident about these commitments? Because I did my own diligence before accepting the Forward opportunity. And I found a number of things that I like and I'm excited about. First, this organization is made of great people. During these first two weeks on the job, I've been impressed with the quality and dedication of people I've met throughout the legacy Forward and Omni business. And I've been pleased to find that these businesses share a common DNA of providing excellent customer service. That will not change, and the quality and commitment of our people will serve as a strong foundation for our growth. Second, I can't stress this enough. As a result of this combination, Forward now has an incredible and unique platform for long-term growth and success, and its current areas of underperformance are very addressable. Let's talk about the platform. In the Omni legacy business, we now have a true global supply chain network to add to our core LTL network. Remember, we run the best-in-class premium service LTL network in the U.S. with an on-time percentage of 98.6% and a cargo claims ratio of 0.04%. We are starting to see the power of the revenue synergies of these assets. Because of our combined capabilities, we were recently awarded a substantial volume of business from a Fortune 500 global technology company. We are finalizing the contract now, and we expect the business to start in June. We have similar opportunities in the advanced stages of our sales pipeline. Also, we continue to gain new business wins from existing customers. As an example, we recently renewed a contract with one of our top 20 legacy Forward customers that will generate an annualized revenue of 4x its historical trends. Additionally, in a tough freight environment, our intermodal team added 13 new logos in the first quarter. All this makes me optimistic about the rest of the year. Another point of strength is our broad and attractive customer base spanning our three distinct commercial channels. Let me pause to say thank you to all of our customers for your business and support. Under my leadership, we plan to drive growth in all three channels, but I want to be clear. We remain committed to our legacy Forward customers, including freight porters, airlines, and 3PLs. We are committing to continuing to provide them with our premium LTL services to enable them to grow their business. We have honored that commitment since closing, and we will continue to provide these key customers with that same great service. In my diligence review, I found that Omni has a strong track record with its customers and does a great job of providing them with solutions around the world. I will name one. Omni provides critical value-added warehouse services for critical partners. We are honored by the trust placed on us by customers like this. In my view, there is much to be excited about at Forward. Those are my initial high-level thoughts, and I naturally will provide more detailed comments on next quarter's call. Right now, addressing the business and financial performance will be the focus of all my energy and time. Rebecca will update you on some progress made so far this year, and I look forward to providing additional updates soon as we make even more headway. Hopefully, the slides we filed along with the press release demonstrate our renewed commitment to providing enhanced disclosure of our performance and integration of Omni. With that, let me turn it over to Rebecca to run through the quarter and provide an update on the Omni integration.

Thanks, Shawn, and good morning, everyone. Let's start by reviewing the fourth quarter results for 2024. I'm not going to read through slide by slide, but will reference certain slides by number when helpful. Before I dive into the numbers, I want to reiterate a point that Shawn made in his remarks. We do not believe that our first quarter results are indicative of what we expect for the remainder of 2024. Those numbers don't tell the full story about the potential earnings power of the combined company. Let me highlight a few of the reasons why, some of which Shawn has already touched on. First, the first quarter is always the worst quarter of the year for business based on historical seasonal trends. Next, these results continue to be impacted by challenging market conditions that persisted throughout the quarter, particularly in the Intermodal, Truckload Brokerage, and Omni lines of businesses. The challenging market conditions led to decreased customer demand for those services, a pattern that we have seen since the second quarter of the prior year. As we continue to execute our revenue growth strategies in the first quarter, we saw positive trends in our less-than-truckload business with weight per shipment growth of 7.4% and shipments per day growth of 1.4% over the same period last year. We have experienced solid retention levels with our legacy Forward customers, which has been positive for revenue growth. During the first quarter, we also saw a 0.7% increase in our revenue per shipment, excluding fuel, and a 6.2% decrease in the revenue per hundredweight, excluding fuel, over the prior year period. The decline in the revenue per hundredweight, excluding fuel, was driven primarily by the shift in the business mix as we execute on the expansion of our door-to-door solutions. Finally, our Q1 results reflect minimal synergy impact, and we expect to see a steady increase in the subsequent quarters until the synergies are fully realized by the end of 2025. From a liquidity standpoint, at the end of March, we had a $340 million capacity on our revolver and $172 million of cash on hand. We are taking all actions to improve liquidity, and we do not foresee the need to draw on the revolver. We look forward to sharing more details about our path to deleveraging in the context of our 2024 full-year guidance during our second quarter's earnings call. Before we look at the numbers, I want to point out that the Omni results are reflected in our first quarter results from the closing of the acquisition, that would be January 25 through the end of the quarter. Our first quarter revenue was $542 million, an increase of 52% or $184 million as compared to the first quarter in the prior year. This increase of $184 million over the prior year period was driven by $225 million of revenue generated by our Omni segment and $4 million of incremental revenue generated by our Expedited Freight segment, partially offset by an incremental decline of $32 million from our Intermodal segment. Our adjusted EBITDA was $29 million, a decline of 51% or $30 million as compared to the first quarter in the prior year. This decrease of $30 million was driven by an adjusted EBITDA loss in the Omni segment of $6 million and incremental EBITDA loss of $7 million in our Expedited Freight segment and incremental EBITDA loss of $8 million in our Intermodal segment and incremental EBITDA loss of $9 million in other operations. For other operations in the first quarter of 2023, we recorded a one-time benefit of $9 million from the substantial reversal of an accrual from an incentive plan established for employees in 2021. A similar benefit was not reported in the first quarter of 2024. We saw adjusted operating income of $13 million, excluding acquisition amortization compared to $47 million in the prior year. Acquisition amortization is the amortization related to the allocation of the purchase price of Omni to intangible assets. We reported adjusted net loss per diluted share on a continuing operations basis, excluding acquisition amortization of $0.64 compared to net income per diluted share on a continuing operations basis of $1.27 in the prior year. Our operating cash flow for the fourth quarter was a negative $52 million compared to a positive $61 million for the prior year period. Our operating cash flow for the first quarter included the payment of transaction and integration costs of $40 million. We consider the payment of transaction and integration costs to be one-time-only costs that are not expected to recur in the second half of the year. We project our liquidity to be at a lower point in the first half of the year as a result of these one-time-only costs. Looking ahead to April, our shipments per day increased approximately 4% and our revenue per shipment, excluding fuel, increased by 2% over the same period last year in our less-than-truckload line of business. Additionally, on a consolidated basis, our revenue grew sequentially from March to April by 6%, a period that historically has shown contraction versus growth based on seasonality. The 5.9% general rate increase we announced in December went into effect in February and will enable us to continue to serve our customers with the same precision execution in an environment with rising operating costs. The capture rate was higher than 2022 and the rate increase is comparable with the increase in operating costs expected for 2024. Now turning to the integration of Omni. On Slide 6, we outlined some key metrics on Forward's business. And on Slide 7, at Omni, which we hope is helpful historical context. But what we're really excited about is what these companies look like together and the opportunity for value creation emerging from the combination. We are pleased with the progress we are making on integration. As you will see on Slide 10, we have provided updated cost synergy targets. We now expect to deliver full run-rate cost synergies of $73 million by the end of 2025, which is very much in line with the initial call synergy targets provided in August 2023. We have adjusted the initial estimate of $75 million by less than $2 million due to volumes associated with the LTL and type synergies. We are pleased to report that we've already delivered synergies of $7.5 million in the first quarter, and we expect to realize $55 million on an annualized basis. We expect to derive the rest of the synergies of $18 million from incremental actions in the area of network optimization, facilities consolidation, SG&A, technology, and brokerage. With regards to our capital position, as you will see on Slide 10, as of March 31, the combined entity had more than $512 million of liquidity. Last quarter, we outlined relevant terms of our existing credit facilities, so I will not go into that detail again here, but I will highlight that we have headroom in our financial covenants as we continue to focus on our integration and realize the cost synergy opportunities. We remain compliant with our bank covenants at the end of the first quarter. In terms of our capital allocation priorities, we are committed to derisking our capital structure, and we are already undertaking several initiatives to deleverage. We intend to return to net leverage of 4.5x by the end of 2025. Key steps include a focus on profitability of the combined entity and the realization of the cost synergies to generate cash from operations as well as an accelerated portfolio review to identify potential divestitures. We are actively reviewing our portfolio and plan to take swift action to monetize those assets. With that, I'll now turn the call back to the operator to take comments and questions.

First question is coming from Bruce Chan with Stifel.

This is Andrew Cox, on for Bruce. We know it's early, Shawn, but we did want to square up what you feel your mandate here at Forward is. Why did you take this position, what you bring to the organization? And what do you feel you can get done in relation to those areas of improvement you found to be very attainable in your diligence?

Thank you, Andrew, for the question. Well, to be honest with you, I love this business. And when I looked at the opportunity of two great companies that I respected from my past coming together, I saw the true potential of that. Obviously, also was the bumpiness of the transaction. And secondly, Andrew, I love challenge. So for sure, it's going to be a great challenge, but one that I'm extremely excited about, ready for, and I know we can bring this together and draw the true potential of this acquisition together. And so that's why I took the opportunity.

Great, Shawn. We look forward to seeing what you're capable of achieving here. And Rebecca, if I could just follow up with a quick one. I know you guys are within the realm of the debt covenants this quarter. But I just wanted to know if you had any response from creditors, how much runway they may be willing to give you moving forward?

Yes, Andrew, thank you for the question. As we mentioned, we will return in our second quarter to provide full-year guidance for 2024. We have discussed the strategies we will implement to improve profitability, reduce costs, and divest assets. Considering all these options, we believe we will remain compliant with our bank covenants, and therefore, there will be no need to engage with our creditors. We are confident in the plan we have established, especially now that Shawn is on board. Our focus is on executing these strategies, and we believe they will provide us with the necessary flexibility until we reach a maintenance covenant.

And we'll take our next question from Bascome Majors with Susquehanna.

Can you talk a little bit about the results of the Omni acquisition and anything you learned out of that? And did any of the historical figures change and why?

Yes. Bascome, great question. In terms of the preliminary numbers that we talked about on our fourth quarter earnings call, as we mentioned, the audit was in progress at that time. We did not have any number changes from that preliminary estimate from our fourth quarter earnings call. It was more of getting through the audit process to get it complete.

In the previous earnings call, you mentioned that while we can see the quarterly cash flow in the statement, there is considerable noise due to the deal and working capital. You talked about being cash flow positive in relation to debt service for the first four or five weeks of ownership. How has that situation evolved now that several months have passed? Are you feeling confident about it? Also, how much room do you have for flexibility?

Yes, Bascome, you are correct that we discussed the first four to five weeks of our liquidity situation and our ability to generate cash for debt service. As I mentioned earlier, we incurred several one-time costs in the first quarter, and we anticipate some additional one-time costs in the second quarter. However, when we look at the second half of the year, we expect those issues to resolve, and operations to return to normal. I believe that once we exclude those one-time costs, we will be free cash flow positive, and we are optimistic about that. We just need to overcome these one-time costs to achieve normalization in the second half of the year.

And I know you don't want to guide the second quarter at this point, but do you have any sense of the magnitude of those one-time costs and how they will compare as a cash flow drag to what you experienced in the last few months?

Yes, you're correct that we are not providing guidance for the second quarter. However, I believe that the most significant impacts from the acquisition closing will be felt in the first quarter. Therefore, I anticipate that the peak effects will occur in the first quarter and will decrease into the second quarter.

You talked about normal seasonality, March to April typically being negative. So it's good to hear that that's headed in a more positive direction. Could you quantify that and just give a range around how super seasonal we are here?

Yes, we believe the current situation is positive. If we reflect on last year, there was some market volatility in the second quarter from March to April. This year seems to show a more normalized market condition. We view the sequential growth from March to April favorably, especially since the market conditions are quite similar between these months now. This reinforces our confidence in our goal of achieving profitability, driving revenue growth, and realizing synergies between the two entities.

And last for me, just to clarify that point. You talked about revenue being super seasonal month-over-month with the growth. Does operating income or profit follow that shape as well? Or has that been different?

Yes. We're just not in a position on this call to be able to speak to the bottom line for that revenue. Generally, one would think that revenue is up in terms of being able to cover off on those fixed costs. So generally, you would expect for there to be the profitability to follow the revenue. But we're not just in a position on this call to be able to address the numbers.

We'll take our next question from Scott Group with Wolfe Research.

Good morning. It's great to speak with you, Shawn and Rebecca. I just want to clarify something I didn’t quite follow. The slides mention that $55 million of synergies have been achieved so far, but it seems like you're referring to a different figure, Rebecca. Could you please clarify that?

Yes, of course. Scott, that's a great question. Looking at this slide, it may help to review some of these figures. The $55 million represents what we have already achieved, which reflects the annualized run rate. We recorded $7.5 million in our profit and loss statement during the first quarter. When we consider the full 12 months, the $55 million stands, while the $7.5 million is what's accounted for in the first quarter. For the first 12 months of 2024, we anticipate that figure to be $47 million. Does that clarify things?

Yes. That's helpful. So I know we're not getting specific guidance, but do you think Omni gets back to positive EBITDA in Q2 as the synergies ramp and given the revenue uptick you're talking about?

Yes. Scott, as you mentioned, we are not providing guidance for Q2, but we acknowledge that this is a key priority for us. We are concentrating on the actions we can take to drive profitability for the combined entity, particularly by focusing on revenue growth and aligning our cost structure. I believe that by addressing these aspects, along with our synergies, we can effectively work towards achieving profitability not only for Omni but also for the overall combined entity.

Okay. Let me try to rephrase my question. You mentioned that you expect to remain compliant with the covenants, despite the ongoing noise and many adjustments. What is the EBITDA target you need to achieve in Q2 to stay below the 6x covenant?

Yes, Scott, as we mentioned, we won't be providing guidance right now, but we will have a more comprehensive outlook for the full year during our second quarter call. We have already estimated what we believe the earnings potential of the combined entity to be. Based on those projections and calculations, we are confident that we will have the necessary headroom going into the second quarter. It's important to remember that the second quarter will be the first instance where we officially need to test for that financial covenant, which will allow us access to the revolving credit. However, we have analyzed the numbers and feel assured that we will remain compliant moving forward, and we look forward to sharing further details about our full year guidance in the next earnings call.

Okay. Regarding the commentary from March to April, did you observe improvements in Expedited, Intermodal, and Omni? Is the improvement seen across the board?

Yes. That was a consolidated number, but we have seen growth in all lines of business.

Okay. And then maybe just last question. So the way that you guys reported today in terms of Omni has its own revenue and earnings line and then adding back the purchase amortization, which I think is something you haven't done before. Is this the new reporting structure just so we have for our models?

Yes. I believe that with Shawn joining us, we will definitely review our segment reporting. Depending on Shawn's perspective on the business, those segments may change. At this moment, we cannot specify what that might entail. However, I can confirm that we plan to include acquisition amortization moving forward, so you can incorporate that into your model. The reportable segments may shift based on Shawn's assessment of the business in the future.

And we'll take our next question from Stephanie Moore with Jefferies.

Shawn, I wanted to touch on some comments that you made about some of the early revenue synergy captures that you're seeing and just the opportunity there. So maybe you could talk a little bit about the genesis of some of those synergies, the demand from your current customers, and just thoughts on kind of revenue synergies now with you at the helm and obviously, the integration in place?

Thank you, Stephanie. So what I see here is, obviously, the legacy Omni business utilizing the assets of Forward is a big piece. And when you start looking at the potential future, it's important when people look at and they make decisions on, do you have your own assets or not? And so I would say there are two major segments here: the domestic Forward moving into the network; and two, how we're leveraging our international business, utilizing the network on a pre- and post-international business.

Yes. I think, Stephanie, what we said in our earnings release is that if you just look at last year, it was a contraction. It was 15%, and that was on a pro forma basis between the two companies. So that wasn't just us buying Omni to increase that number. That was on a pro forma basis. So it's negative 15% last year versus a 6% growth this year.

Got it. And then just, I guess, another one for me. You talked about the continued focus on a portfolio review. Any color there in terms of which assets within the business do you think might be not helpful or not part of the strategic plan of the combined entity with the legacy Expedited and Omni businesses? Can you give us a little bit more color on what might not be part of the long-term strategy?

Stephanie, this is Michael. Great question. And we are actioning a plan to divest non-core assets in 2024. But really, we can't give specifics beyond that, but we are working that plan aggressively.

Okay, that's helpful. Lastly, I would appreciate more clarity on the 2024 guidance when you report Q2. By that time, we will be eight months into the year, and naturally, we will also be looking ahead to 2025. Is there a possibility to update on the long-term potential of the combined entity or provide a multi-year view, including updates to the original numbers given when the acquisition was announced?

Yes. Stephanie, I think as Shawn mentioned in his remarks that we are looking to give transparency to the investor community. And so I think there certainly could be an opportunity for us to be able to give a longer-term view because you are correct. By that time, we will be through the large portion of 2024. So it's certainly not off the table. And we want to give the right view to the shareholder and analyst community to better understand the value that we see with the combined entity.

We will take our next question from Christopher Kuhn with Benchmark.

Shawn, welcome to Forward.

Thank you, sir.

Rebecca, I think you said the historical EBITDA figures didn't change, but I mean, it does look like maybe some of the adjustments might have from the presentation you gave last year to the presentation you have this morning. Can you just help me understand that?

Yes. So maybe, Chris, just to make sure that I understand. I think you're referring back to the presentation, the investor presentation we gave in August of 2023. Is that correct?

Yes.

Yes. There's only just a handful of adjustments that were excluded from the presentation, more so to conform with non-GAAP reporting for a public company. And so there's just a handful. It's really just a pro forma EBITDA adjustment that were removed from that presentation and carried forward. Otherwise, everything is the exact same.

Okay. In that case, there is $65 million of EBITDA add backs for the quarter. Could you break down that $65 million so we can better understand what it includes? I know there are transaction costs, but could you clarify what else is included in that figure?

Yes, that's correct. The $65 million is divided into two parts, with the larger portion being the transaction and integration costs, while the other part consists of severance costs. The transaction and integration costs involve any expenses related to the acquisition that the combined entity incurred during the quarter, which are reflected in our profit and loss statement. The severance costs pertain to the reduction in workforce actions that were taken, so they encompass the expenses associated with that. We view these as one-time, nonrecurring costs.

Did you mention during the call how the core LTL network business performed? I understand that the Brokerage and Intermodal businesses negatively impacted EBITDA, but I am curious about how the core LTL business fared in relation to your expectations.

Yes, certainly, from our less-than-truckload line of business, our core business, as you've called from an operating tax standpoint, we saw some favorability in terms of the volume growth. And we certainly saw from a revenue per shipment standpoint, ex-fuel, we also saw some positive growth there. That would reflect a staggered GRI coming into the revenue throughout the quarter. But we did see some green sheets in our less-than-truckload line of business. So we feel really good about that in terms of the first quarter.

I'm curious about the EBITDA. I know you don’t provide those specifics, but I would like to know how the EBITDA is performing in the core business compared to your expectations.

We didn't provide a specific breakdown for that. While we discussed it in relation to the Expedited freight segment, I believe the positive trends we are observing in our operating statistics reflect well on our EBITDA performance.

Okay. And then just lastly, you talked about the freight markets being weak in the first quarter, but what does that persist into the rest of the year? How do you feel comfortable in terms of your covenants and reducing the leverage and hitting your cost synergy targets?

Yes. So certainly, Chris, as we're thinking ahead to those covenants. Certainly, what we can speak about is what we can control. And so what we can control are taking out costs. And so kind of rightsizing the cost for the combined entity. We can control in some respects, right, kind of asset dispositions. And then obviously, continuing to grow from a revenue of profitability. It is, as you pointed out, a bit difficult from the revenue profitability in this environment. But we've seen already April being positive. We now have Shawn that's on board. And so we see all of that as being some good signs as we head into the second quarter.

We'll take our next question from Bruce Chan with Stifel.

It's Andrew again. I just wanted to address attrition, both on the customer side and on the Omni's sales force side. Last quarter, you said you guys weren't seeing any material customer attrition. I just wanted to know if anything has changed there. And then also, what's the attrition been like at Omni sales force and what's the plan to integrate the team? And then as a follow-up, Shawn, what are some of the things that you can bring and what you can do to defend against both customer attrition and attrition of the Omni sales force?

Andrew, happy to answer. This is Michael. I'll start and then pass it to Shawn. I'm pleased to report that the answers on customer attrition and salespeople attrition is still positive. I mean I've had many interactions with our customers over the past several months. And as Shawn said on the call in his opening remarks, they're looking for us to continue to provide them with the same great service that enables them to win, and we are committed to doing that and have continued to do that. And so we have not seen customer attrition. And with respect to the sales team, we have a great sales team, and they are laser-focused on winning in this tough environment, and we're grateful for that. And there are, as part of one of our integration work streams, is sort of working on how to integrate from a commercial side and sales side, and that's fully engaged and ongoing. And I think with Shawn now at the helm, he'll be speaking into that and directing it and steering it. And you'll hear more about that in days ahead, but Shawn, I'll pass the mic to you on that.

Yes. So thank you for the question, Andrew. Look, in full transparency, if you're not growing your debt in this business and I'd like to spend a large majority of my time personally involved with customers. So obviously, I've got a lot of work to do ahead of me with the team to get the most optimal out of this venture quickly. But I will segment my time over this next quarter to split those time capsules, if you will, between direct interaction with customers, with the sales team to ensure that we continue to give that confidence and listening to understanding what solutions we can bring to their supply chain throughout this combined network.

And Andrew, if I could just jump back in. I'm not doing justice because I've had the great pleasure of sitting with our sales leaders and working with them closely over the past several months. And I just can't tell you how impressed I am with them and how dedicated they are to be delivering that great service to our customers. I've been in so many meetings where they get kudos from the customer because our people are just so committed. So I think that is a great asset for us and something that, as Shawn said in his remarks, our great people are the foundation for which we're going to build on. And so I just want to call that out specifically and say thank you again to those folks who are listening on the call.

We will take our next question from Tyler Brown with Raymond James.

So just so I have it on the EBITDA calculation for the debt covenant. Is it basically you just take the last four quarters of pro forma EBITDA and then they add kind of the run rate synergies. Is that effectively correct?

Yes, Tyler. We provided a reconciliation for the trailing 12 months in the appendix. You're right about the pro formas of the last four quarters, along with the adjustments we need to add back, the most significant being our due diligence transaction and integration costs. Additionally, you are correct about the run rate of the cost synergies. It is indeed $75 million, adjusted for any we have realized within our own P&L or achievements we've accomplished. In implicit terms, that is accurate.

Okay. So if I come back to Scott's question at even kind of another different way, but what was the bank applicable pro forma EBITDA in the second half of '23? Do you have that by chance maybe for Q3 and Q4 because it's very hard to do the calculation?

Yes, we provided the bank's calculation based on the trailing 12 months. We wanted to be transparent about what that looked like, so we shared the trailing 12 months instead of breaking it down by the quarters.

Okay. Well, obviously, cash flow is going to be super important here. And based on the comments, again, because I think on the last quarter call, you said that February was cash flow positive, which implies that March was a big burn. I mean, can you commit to having positive operating cash flow in Q2? Or you're just not ready to do that?

Yes, I don't think we are prepared to discuss Q2 in detail. However, I can assure you that this is a top priority for the company. We are very focused on liquidity and reducing our debt. We acknowledge that there are some one-time costs in the second quarter due to lingering expenses from the acquisition. Once we reach the second half of the year, we expect a more normalized environment. We have already demonstrated $7.5 million in synergies in our P&L for the first quarter, and we believe more will follow in the second quarter and the latter half of the year. Additionally, as we've mentioned regarding cost reductions, there are programs currently underway. We will provide more clarity on those in our second quarter earnings call. All of our actions are aimed at achieving positive cash flow, which is our focus, and we aim to provide you with more information during our second-quarter earnings call. I hope this gives you some context on how we view liquidity and the steps we are taking.

Okay. A couple more. So I think on the cash flow statement, you also paid out a $12 million earn-out. What was that for?

Yes, that's right. It's included in the financing section. There was a legacy Omni acquisition where an earnout was earned and is now due for payment. It was divided between Q1 and Q2. So the $12 million you see in financing represents part of it. There will be another portion in the second quarter.

Okay. Equal size.

No, it's a smaller. A larger portion was paid in the first quarter. It's a smaller portion in the second quarter.

Okay. And my last one, so on the leverage ratio calculation, I thought that the cash cap was, say, $50 million. It seems like you were able to add back $155 million in the calculation this quarter. Am I just misunderstanding how the calculation is done?

No. Tyler, after a further review, we are able to add back unrestricted cash, which essentially is our domestic cash. And so that is correct. That's why the $155 million is a tieback to our balance sheet because we were able to take a larger portion of that as long as it's not restricted cash to deduct. It's netting against the debt.

And next, we'll take another question from Bascome Majors with Susquehanna.

Just to go back to Tyler and Scott's angle, as we look at the trailing 4Q lender EBITDA, you're going to lose the second quarter of last year, which will obviously be challenging even with sequential improvement versus the first quarter of this year. Is there any way to frame the lender number of EBITDA on an adjusted basis for the second quarter last year, just so we can think about the risk of losing that going forward?

Yes. I think, Bascome, you're correct that we will see a decline as we move into the second quarter. While we will experience a drop in that quarter, I want to reiterate that the first quarter is not indicative of what the rest of the year will look like. Therefore, even though we will see a decline in the second quarter as you noted, it's important to understand that Q1 results will not reflect the outcomes in Q2. We have actions in place regarding everything we've discussed, and we believe we will remain in compliance. So, despite the decline from last quarter and as we look forward to our second quarter results, we are confident.

Okay. Shawn, although you've just started here, you've spent a career at a business that was acquired and then owned by a heavily leveraged state for a long time. Can you share some insights about the leverage crisis experiences you've had? How has managing a business while dealing with a challenging debt load and cash flow prepared you for this opportunity at Forward Air? What have you learned that will help create value for equity holders in the coming years?

Sure. I appreciate the question. I would say, just maybe at a high level, what I learned is that you don't win the game playing defense and you don't win the game just playing offense. It's how you play both of them at the same time, to bring a situation that's not so good into something that's really positive. And so my approach to this opportunity of being here is that we are completely focused on both of those at the same time, and that will take us to the optimal situation that we need to be in at the quickest rate.

And that will end our Q&A session, and this will conclude today's Forward Air First Quarter 2024 Earnings Conference Call. Please disconnect your lines at this time and have a wonderful day.