FWRD 8-K
Forward Air Corp (FWRD)
8-K
2024-11-04
For: 2024-11-04
View Original
Added on
April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 8-K
______________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 2024
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
| (Commission File Number) | ||
Registrant's telephone number, including area code: (423 ) 636-7000
| Not Applicable | ||
| (Former name or former address, if changed since last report) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
SECTION 2. FINANCIAL INFORMATION.
Item 2.02. Results of Operations and Financial Condition.
On November 4, 2024, Forward Air Corporation (the "Company") issued a press release (the "Press Release") announcing its financial results for the three months ended September 30, 2024. On November 4, 2024, the Company also posted an Earnings Presentation (the "Earnings Presentation"), dated November 4, 2024, on the Company’s Investor Relations website at ir.forwardaircorp.com.
Copies of the Press Release and Earnings Presentation are being furnished as Exhibits 99.1 and 99.2, attached hereto, respectively, and are incorporated herein by reference. The information furnished pursuant to Items 2.02 and 9.01, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished as part of this Report.
| No. | Exhibit | |||||||
| 104 | Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FORWARD AIR CORPORATION | |||||||||||
Date: | By: | /s/ Jamie Pierson | |||||||||
| Jamie Pierson Chief Financial Officer | |||||||||||
NEWS RELEASE
FORWARD AIR CORPORATION REPORTS THIRD QUARTER 2024 RESULTS
Focus pivoting from completing Omni integration and capturing cost synergies to global transformation
Stronger cash flow from operations led to increase in liquidity
Announces addition of new Chief Commercial Officer
GREENEVILLE, Tenn. – (BUSINESS WIRE) – November 4, 2024 – Forward Air Corporation (NASDAQ:FWRD) (the “Company”, “we”, “our”, or “us”) today reported financial results for the three months ended September 30, 2024, as presented in the tables below on a continuing operations basis, with the Company’s former Final Mile business being reported as discontinued operations.
“Our team continues to focus on harnessing the power of the combined legacy Forward and Omni companies as we begin the transition from integration to transformation and remain on schedule to capture the previously identified $75 million of synergies by end of the first quarter of 2025,” said Shawn Stewart, Chief Executive Officer. “We also recently enhanced our operations by opening a new certified container freight station in Miami, enabling us to offer direct air and ocean import and export services in and out of South and Central America. Our new breath of end-to-end services has also led to several collective wins since closing the acquisition.
“Beyond the near-term synergy and sales wins, we are beginning to transform for longer-term success; a company that shares a common fabric and a common customer-first DNA. Going forward we will be working to collaborate across legacy entities, eliminate previously unidentified redundancies, automate and digitize repetitive processes and unifying under a new brand with a common goal and mission. Transforming a company of this size, complexity and geographic diversity is not an event and will take time, but I am confident in our strategy.
“Part of that strategy is strengthening our team with industry leading talent. To that end, I am excited to announce that we have hired a new Chief Commercial Officer who is slated to join us in January. He has over 20 years of experience in global logistics and is well prepared to collaborate with our customers. I am excited about his industry expertise and ability to hit the ground running in the first quarter of next year.
“Looking ahead, it is difficult to forecast the next freight cycle, but we remain focused on actively integrating and transforming the Company so we can be prepared to capitalize on the market upturn as a comprehensive vertical global logistics company with ground, air, ocean, contract logistics and customers brokerage services,” concluded Stewart.
Jamie Pierson, Chief Financial Officer added, “For the third quarter of 2024, we reported revenue of $656 million and operating income of $23 million. On a segment basis, Omni Logistics continued to improve and sequentially grew revenue and operating income. However, the Expedited Freight segment did not perform up to our expectations due largely to a decrease in year-over-year revenue per hundredweight, excluding fuel surcharge, which was primarily attributable to customer mix and the associated pricing. Revenue at the Intermodal segment was down but tight cost management strategies kept operating income essentially flat year-over-year.
“For the third quarter, Consolidated EBITDA ("Consolidated EBITDA"), a non-GAAP measure calculated pursuant to our Senior Secured Term Loan Credit Agreement (the "Credit Agreement"), was $77 million compared to $81 million last quarter showing resilience and stability in the face of a challenging macro environment. For the twelve months ending September 30, 2024, Consolidated EBITDA was $307 million which resulted in an approximate $32 million cushion under the Credit Agreement’s consolidated first lien net leverage ratio covenant.
“On the heels of robust operating cash flow, we ended the third quarter in a stronger liquidity position as cash increased $33 million from the previous quarter and liquidity increased $15 million to $460 million. With the third quarter behind us, we expect 2024 Consolidated EBITDA guidance to $300 to $310 million, which reflects our expectation of continued softness in the overall macro environment.” noted Pierson.
| Three Months Ended | ||||||||||||||||||||||||||
| (in thousands, except per share data) | September 30, 2024 | September 30, 2023 | Change | Percent Change | ||||||||||||||||||||||
| Operating revenue | $ | 655,937 | $ | 340,976 | $ | 314,961 | 92.4 | % | ||||||||||||||||||
| (Loss) income from operations | $ | 22,697 | $ | 11,689 | $ | 11,008 | 94.2 | % | ||||||||||||||||||
| Operating margin | 3.5 | % | 3.4 | % | 10 bps | |||||||||||||||||||||
| Net (loss) income | $ | (34,198) | $ | 6,493 | $ | (40,691) | (626.7) | % | ||||||||||||||||||
| Net (loss) income per diluted share | $ | (2.62) | $ | 0.25 | $ | (2.87) | (1,148.0) | % | ||||||||||||||||||
| Cash (used in) provided by operating activities | $ | 52,597 | $ | 24,666 | $ | 27,931 | 113.2 | % | ||||||||||||||||||
Non-GAAP Financial Measures: 1 | ||||||||||||||||||||||||||
| Consolidated EBITDA | $ | 76,997 | $ | 92,714 | $ | (15,717) | (17.0) | % | ||||||||||||||||||
| Free cash flow | $ | 43,270 | $ | 19,526 | $ | 23,744 | 121.6 | % | ||||||||||||||||||
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 third quarter 2024 results on Monday, November 4, 2024 at 4:30 p.m. ET. 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 (800) 225-9448, Access Code: FWRDQ324.
A replay of the conference call will be available on the Investor Relations portion of the Company’s website at ir.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.
About Forward Air Corporation
Forward Air is a leading asset-light provider of transportation services across the United States, Canada and Mexico. We provide expedited less-than-truckload services, including local pick-up and delivery, shipment consolidation/deconsolidation, warehousing, and customs brokerage by utilizing a comprehensive national network of terminals. In addition, we offer truckload brokerage services, including dedicated fleet services, and intermodal, first- and last-mile, high-value drayage services, both to and from seaports and railheads, dedicated contract and Container Freight Station warehouse and handling services. Forward also operates a full portfolio of multimodal solutions, both domestically and internationally, via Omni Logistics. Omni Logistics is a global provider of air, ocean and ground services for mission-critical freight. We are more than a transportation company. Forward is a single resource for your shipping needs. For more information, visit our website at www.forwardaircorp.com.
2
| Forward Air Corporation | |||||||||||||||||||||||
| Condensed Consolidated Statements of Comprehensive (Loss) Income | |||||||||||||||||||||||
| (Unaudited, in thousands, except per share data) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||
| Expedited Freight | $ | 284,707 | $ | 278,875 | $ | 849,284 | $ | 817,888 | |||||||||||||||
| Intermodal | 57,412 | 62,183 | 173,003 | 214,603 | |||||||||||||||||||
| Omni Logistics | 334,538 | — | 871,232 | — | |||||||||||||||||||
| Eliminations and other operations | (20,720) | (82) | (52,103) | (184) | |||||||||||||||||||
| Operating revenues | 655,937 | 340,976 | 1,841,416 | 1,032,307 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Purchased transportation | 332,469 | 148,706 | 931,072 | 435,844 | |||||||||||||||||||
| Salaries, wages and employee benefits | 133,516 | 75,373 | 406,382 | 215,983 | |||||||||||||||||||
| Operating leases | 48,810 | 19,536 | 133,871 | 66,505 | |||||||||||||||||||
| Depreciation and amortization | 25,893 | 14,209 | 106,321 | 39,826 | |||||||||||||||||||
| Insurance and claims | 17,382 | 12,969 | 44,961 | 38,988 | |||||||||||||||||||
| Fuel expense | 4,855 | 5,845 | 15,960 | 16,733 | |||||||||||||||||||
| Other operating expenses | 55,564 | 52,649 | 234,175 | 133,218 | |||||||||||||||||||
| Impairment of goodwill | 14,751 | — | 1,107,465 | — | |||||||||||||||||||
| Total operating expenses | 633,240 | 329,287 | 2,980,207 | 947,097 | |||||||||||||||||||
| Income (loss) from continuing operations: | |||||||||||||||||||||||
| Expedited Freight | 19,269 | 32,547 | 60,713 | 89,295 | |||||||||||||||||||
| Intermodal | 4,091 | 4,744 | 12,994 | 20,259 | |||||||||||||||||||
| Omni Logistics | 1,136 | — | (1,133,323) | — | |||||||||||||||||||
| Other Operations | (1,799) | (25,602) | (79,175) | (24,344) | |||||||||||||||||||
| Income from continuing operations | 22,697 | 11,689 | (1,138,791) | 85,210 | |||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Interest expense, net | (52,770) | (2,655) | (140,788) | (7,595) | |||||||||||||||||||
| Foreign exchange (loss) gain | (2,812) | — | (1,912) | — | |||||||||||||||||||
| Other income (expense), net | (11) | — | 38 | — | |||||||||||||||||||
| Total other expense | (55,593) | (2,655) | (142,662) | (7,595) | |||||||||||||||||||
| (Loss) income before income taxes | (32,896) | 9,034 | (1,281,453) | 77,615 | |||||||||||||||||||
| Income tax (benefit) expense | 1,302 | 2,541 | (191,990) | 20,091 | |||||||||||||||||||
| Net (loss) income from continuing operations | (34,198) | 6,493 | (1,089,463) | 57,524 | |||||||||||||||||||
| (Loss) income from discontinued operation, net of tax | (1,137) | 2,795 | (6,013) | 8,083 | |||||||||||||||||||
| Net (loss) income | (35,335) | 9,288 | $ | (1,095,476) | $ | 65,607 | |||||||||||||||||
| Net income (loss) attributable to noncontrolling interest | 38,073 | — | (314,923) | — | |||||||||||||||||||
| Net (loss) income attributable to Forward Air | $ | (73,408) | $ | 9,288 | $ | (780,553) | $ | 65,607 | |||||||||||||||
| Net income per common share: | |||||||||||||||||||||||
| Basic net (loss) income per share | |||||||||||||||||||||||
| Continuing operations | $ | (2.62) | $ | 0.25 | $ | (27.98) | $ | 2.20 | |||||||||||||||
| Discontinued operation | (0.04) | 0.11 | (0.22) | 0.31 | |||||||||||||||||||
| Basic | $ | (2.66) | $ | 0.36 | $ | (28.20) | $ | 2.51 | |||||||||||||||
| Diluted net (loss) income per share | |||||||||||||||||||||||
| Continuing operations | $ | (2.62) | $ | 0.25 | $ | (27.98) | $ | 2.19 | |||||||||||||||
| Discontinued operation | (0.04) | 0.11 | (0.22) | 0.31 | |||||||||||||||||||
| Diluted | $ | (2.66) | $ | 0.36 | $ | (28.20) | $ | 2.50 | |||||||||||||||
| Dividends per share: | $ | — | $ | 0.24 | $ | — | $ | 0.72 | |||||||||||||||
| Net (loss) income | $ | (35,335) | $ | 9,288 | $ | (1,095,476) | $ | 65,607 | |||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||
| Foreign currency translation adjustments | 176 | — | (824) | — | |||||||||||||||||||
| Comprehensive (loss) income | $ | (35,159) | $ | 9,288 | $ | (1,094,652) | $ | 65,607 | |||||||||||||||
3
| Expedited Freight Segment Information | |||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| September 30, 2024 | Percent of Revenue | September 30, 2023 | Percent of Revenue | Change | Percent Change | ||||||||||||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||||||||||||||
Network 1 | $ | 217,289 | 76.3 | % | $ | 216,977 | 77.8 | % | $ | 312 | 0.1 | % | |||||||||||||||||||||||
| Truckload | 43,635 | 15.3 | 38,800 | 13.9 | 4,835 | 12.5 | |||||||||||||||||||||||||||||
| Other | 23,783 | 8.4 | 23,098 | 8.3 | 685 | 3.0 | |||||||||||||||||||||||||||||
| Total operating revenues | 284,707 | 100.0 | 278,875 | 100.0 | 5,832 | 2.1 | |||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Purchased transportation | 140,035 | 49.2 | 129,850 | 46.6 | 10,185 | 7.8 | |||||||||||||||||||||||||||||
| Salaries, wages and employee benefits | 59,426 | 20.9 | 56,682 | 20.3 | 2,744 | 4.8 | |||||||||||||||||||||||||||||
| Operating leases | 15,556 | 5.5 | 14,392 | 5.2 | 1,164 | 8.1 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 10,481 | 3.7 | 9,022 | 3.2 | 1,459 | 16.2 | |||||||||||||||||||||||||||||
| Insurance and claims | 11,672 | 4.1 | 9,533 | 3.4 | 2,139 | 22.4 | |||||||||||||||||||||||||||||
| Fuel expense | 2,113 | 0.7 | 2,954 | 1.1 | (841) | (28.5) | |||||||||||||||||||||||||||||
| Other operating expenses | 26,155 | 9.1 | 23,895 | 8.5 | 2,260 | 9.5 | |||||||||||||||||||||||||||||
| Total operating expenses | 265,438 | 93.2 | 246,328 | 88.3 | 19,110 | 7.8 | |||||||||||||||||||||||||||||
| Income from operations | $ | 19,269 | 6.8 | % | $ | 32,547 | 11.7 | % | $ | (13,278) | (40.8) | % | |||||||||||||||||||||||
1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue. | |||||||||||||||||||||||||||||||||||
4
| Expedited Freight Operating Statistics | |||||||||||||||||
| Three Months Ended | |||||||||||||||||
| September 30, 2024 | September 30, 2023 | Percent Change | |||||||||||||||
| Business days | 64 | 63 | 1.6 | % | |||||||||||||
Tonnage 1,2 | |||||||||||||||||
| Total pounds | 713,212 | 685,756 | 4.0 | ||||||||||||||
| Pounds per day | 11,144 | 10,885 | 2.4 | ||||||||||||||
Shipments 1,2 | |||||||||||||||||
| Total shipments | 831 | 835 | (0.5) | ||||||||||||||
| Shipments per day | 13.0 | 13.3 | (2.3) | ||||||||||||||
| Weight per shipment | 858 | 821 | 4.5 | ||||||||||||||
Revenue per hundredweight 3 | $ | 30.47 | $ | 31.66 | (3.8) | ||||||||||||
Revenue per hundredweight, ex fuel 3 | $ | 24.09 | $ | 24.20 | (0.5) | ||||||||||||
Revenue per shipment 3 | $ | 261.55 | $ | 259.94 | 0.6 | ||||||||||||
Revenue per shipment, ex fuel 3 | $ | 206.73 | $ | 198.71 | 4.0 | ||||||||||||
1 In thousands | |||||||||||||||||
2 Excludes accessorial and Truckload and products | |||||||||||||||||
3 Includes intercompany revenue between the Network and Truckload revenue streams | |||||||||||||||||
5
| Intermodal Segment Information | |||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| September 30, 2024 | Percent of Revenue | September 30, 2023 | Percent of Revenue | Change | Percent Change | ||||||||||||||||||||||||||||||
| Operating revenue | $ | 57,412 | 100.0 | % | $ | 62,183 | 100.0 | % | $ | (4,771) | (7.7) | % | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Purchased transportation | 18,300 | 31.9 | 18,945 | 30.5 | (645) | (3.4) | |||||||||||||||||||||||||||||
| Salaries, wages and employee benefits | 14,506 | 25.3 | 16,118 | 25.9 | (1,612) | (10.0) | |||||||||||||||||||||||||||||
| Operating leases | 5,668 | 9.9 | 5,144 | 8.3 | 524 | 10.2 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 4,582 | 8.0 | 5,187 | 8.3 | (605) | (11.7) | |||||||||||||||||||||||||||||
| Insurance and claims | 2,528 | 4.4 | 2,758 | 4.4 | (230) | (8.3) | |||||||||||||||||||||||||||||
| Fuel expense | 1,942 | 3.4 | 2,892 | 4.7 | (950) | (32.8) | |||||||||||||||||||||||||||||
| Other operating expenses | 5,795 | 10.0 | 6,395 | 10.3 | (600) | (9.4) | |||||||||||||||||||||||||||||
| Total operating expenses | 53,321 | 92.9 | 57,439 | 92.4 | (4,118) | (7.2) | |||||||||||||||||||||||||||||
| Income from operations | $ | 4,091 | 7.1 | % | $ | 4,744 | 7.6 | % | $ | (653) | (13.8) | % | |||||||||||||||||||||||
Intermodal Operating Statistics | |||||||||||||||||
| Three Months Ended | |||||||||||||||||
| September 30, 2024 | September 30, 2023 | Percent Change | |||||||||||||||
| Drayage shipments | 62,616 | 68,576 | (8.7) | % | |||||||||||||
| Drayage revenue per shipment | $ | 824 | $ | 823 | 0.1 | % | |||||||||||
6
| Omni Logistics Segment Information | |||||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| September 30, 2024 | Percent of Revenue | ||||||||||
| Operating revenue | $ | 334,538 | 100.0 | % | |||||||
| Operating expenses: | |||||||||||
| Purchased transportation | 194,853 | 58.2 | |||||||||
| Salaries, wages and employee benefits | 55,151 | 16.5 | |||||||||
| Operating leases | 27,586 | 8.2 | |||||||||
| Depreciation and amortization | 10,830 | 3.2 | |||||||||
| Insurance and claims | 3,488 | 1.0 | |||||||||
| Fuel expense | 800 | 0.2 | |||||||||
| Other operating expenses | 25,943 | 7.8 | |||||||||
| Impairment of goodwill | 14,751 | 4.4 | |||||||||
| Total operating expenses | 333,402 | 99.7 | |||||||||
| Income from operations | $ | 1,136 | 0.3 | % | |||||||
7
| Forward Air Corporation | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 136,616 | $ | 121,969 | |||||||
| Restricted cash and restricted cash equivalents | 1,540 | 39,604 | |||||||||
| Accounts receivable, net | 361,003 | 153,267 | |||||||||
| Other receivables | 1,695 | 5,408 | |||||||||
| Prepaid expenses | 31,174 | 25,682 | |||||||||
| Other current assets | 13,053 | 1,098 | |||||||||
| Total current assets | 545,081 | 347,028 | |||||||||
| Noncurrent restricted cash equivalents | — | 1,790,500 | |||||||||
| Property and equipment | 606,418 | 508,280 | |||||||||
| Less accumulated depreciation and amortization | 281,636 | 250,185 | |||||||||
| Property and equipment, net | 324,782 | 258,095 | |||||||||
| Operating lease right-of-use assets | 355,139 | 111,552 | |||||||||
| Goodwill | 716,071 | 278,706 | |||||||||
| Other acquired intangibles, net | 1,033,352 | 134,789 | |||||||||
| Other assets | 81,415 | 58,863 | |||||||||
| Total assets | $ | 3,055,840 | $ | 2,979,533 | |||||||
| Liabilities and Shareholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 157,230 | $ | 45,430 | |||||||
| Accrued expenses | 135,590 | 62,948 | |||||||||
| Other current liabilities | 49,571 | 71,727 | |||||||||
| Current portion of debt and finance lease obligations | 16,741 | 12,645 | |||||||||
| Current portion of operating lease liabilities | 89,566 | 44,344 | |||||||||
| Total current liabilities | 448,698 | 237,094 | |||||||||
| Finance lease obligations, less current portion | 32,731 | 26,736 | |||||||||
| Long-term debt, less current portion | 1,673,292 | — | |||||||||
| Long-term debt held in escrow | — | 1,790,500 | |||||||||
| Operating lease liabilities, less current portion | 275,843 | 71,598 | |||||||||
| Liabilities under tax receivable agreement | 36,797 | — | |||||||||
| Other long-term liabilities | 42,423 | 47,144 | |||||||||
| Deferred income taxes | 209,522 | 42,200 | |||||||||
| Shareholders' equity: | |||||||||||
| Preferred stock | — | — | |||||||||
| Common stock | 287 | 257 | |||||||||
| Additional paid-in capital | 528,255 | 283,684 | |||||||||
| Retained (deficit) earnings | (301,634) | 480,320 | |||||||||
| Accumulated other comprehensive loss | (824) | — | |||||||||
| Total Forward Air shareholders' equity | 226,084 | 764,261 | |||||||||
| Noncontrolling interest | 110,450 | — | |||||||||
| Total shareholders' equity | 336,534 | 764,261 | |||||||||
| Total liabilities and shareholders' equity | $ | 3,055,840 | $ | 2,979,533 | |||||||
8
| Forward Air Corporation | |||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| September 30, 2024 | September 30, 2023 | ||||||||||
| Operating activities: | |||||||||||
| Net (loss) income from continuing operations | $ | (34,198) | $ | 6,493 | |||||||
| Adjustments to reconcile net (loss) income of continuing operations to net cash (used in) provided by operating activities of continuing operations | |||||||||||
| Depreciation and amortization | 25,893 | 14,209 | |||||||||
| Impairment of goodwill | 14,751 | — | |||||||||
| Share-based compensation expense | 2,901 | 2,774 | |||||||||
| Provision for revenue adjustments | 602 | 1,214 | |||||||||
| Deferred income tax (benefit) expense | (33,552) | 17 | |||||||||
| Other | (730) | 688 | |||||||||
| Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses: | |||||||||||
| Accounts receivable | 8,215 | (17,723) | |||||||||
| Other receivables | 628 | — | |||||||||
| Other current and noncurrent assets | 38,422 | (7,000) | |||||||||
| Accounts payable and accrued expenses | 29,665 | 23,994 | |||||||||
| Net cash provided by operating activities of continuing operations | 52,597 | 24,666 | |||||||||
| Investing activities: | |||||||||||
| Proceeds from sale of property and equipment | 1,087 | 104 | |||||||||
| Purchases of property and equipment | (10,414) | (5,244) | |||||||||
| Other | (145) | — | |||||||||
| Net cash used in investing activities of continuing operations | (9,472) | (5,140) | |||||||||
| Financing activities: | |||||||||||
| Repayments of finance lease obligations | (6,212) | (2,917) | |||||||||
| Payments on credit facility | — | (375) | |||||||||
| Payment of debt issuance costs | (1,443) | — | |||||||||
| Payments of dividends to shareholders | — | (6,198) | |||||||||
| Repurchases and retirement of common stock | — | (14,019) | |||||||||
| Proceeds from common stock issued under employee stock purchase plan | (14) | — | |||||||||
| Payment of minimum tax withholdings on share-based awards | (211) | (23) | |||||||||
| Contributions from subsidiary held for sale | — | 4,568 | |||||||||
| Net cash used in financing activities of continuing operations | (7,880) | (18,964) | |||||||||
| Effect of exchange rate changes on cash | (607) | — | |||||||||
| Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents from continuing operations | 34,638 | 562 | |||||||||
| Cash from discontinued operation: | |||||||||||
| Net cash (used in) provided by operating activities of discontinued operation | (1,137) | 5,199 | |||||||||
| Net cash used in investing activities of discontinued operation | — | (599) | |||||||||
| Net cash used in financing activities of discontinued operation | — | (4,600) | |||||||||
| Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents | 33,501 | 562 | |||||||||
| Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period of continuing operations | 104,655 | 18,281 | |||||||||
| Cash at beginning of period of discontinued operation | — | — | |||||||||
| Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents | 33,501 | 562 | |||||||||
| Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period of continuing operations | $ | 138,156 | $ | 18,843 | |||||||
9
| Forward Air Corporation | |||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| (In thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Nine Months Ended | |||||||||||
| September 30, 2024 | September 30, 2023 | ||||||||||
| Operating activities: | |||||||||||
| Net (loss) income from operations | $ | (1,089,463) | $ | 57,524 | |||||||
| Adjustments to reconcile net income of operations to net cash provided by operating activities of operations | |||||||||||
| Depreciation and amortization | 106,321 | 39,826 | |||||||||
| Impairment of goodwill | 1,107,465 | — | |||||||||
| Share-based compensation expense | 8,088 | 8,570 | |||||||||
| Provision for revenue adjustments | 2,761 | 4,026 | |||||||||
| Deferred income tax (benefit) expense | (197,156) | 2,199 | |||||||||
| Other | 5,739 | (1,045) | |||||||||
| Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses: | |||||||||||
| Accounts receivable | (34,050) | 20,967 | |||||||||
| Other receivables | 6,159 | — | |||||||||
| Other current and noncurrent assets | (18,215) | 3,609 | |||||||||
| Accounts payable and accrued expenses | 58,024 | 6,444 | |||||||||
| Net cash (used in) provided by operating activities | (44,327) | 142,120 | |||||||||
| Investing activities: | |||||||||||
| Proceeds from sale of property and equipment | 2,493 | 3,275 | |||||||||
| Purchases of property and equipment | (29,810) | (22,080) | |||||||||
| Purchase of a business, net of cash acquired | (1,565,242) | (56,703) | |||||||||
| Other | (319) | — | |||||||||
| Net cash used in investing activities | (1,592,878) | (75,508) | |||||||||
| Financing activities: | |||||||||||
| Repayments of finance lease obligations | (15,339) | (6,840) | |||||||||
| Proceeds from credit facility | — | 45,000 | |||||||||
| Payments on credit facility | (80,000) | (31,125) | |||||||||
| Payment of debt issuance costs | (62,034) | — | |||||||||
| Payment of earn-out liability | (12,247) | — | |||||||||
| Payments of dividends to shareholders | — | (18,798) | |||||||||
| Repurchases and retirement of common stock | — | (93,811) | |||||||||
| Proceeds from common stock issued under employee stock purchase plan | 355 | 421 | |||||||||
| Payment of minimum tax withholdings on share-based awards | (1,572) | (4,315) | |||||||||
| Contributions from (distributions to) subsidiary held for sale | — | 15,877 | |||||||||
| Net cash used in financing activities | (170,837) | (93,591) | |||||||||
| Effect of exchange rate changes on cash | 138 | — | |||||||||
| Net (decrease) increase in cash and cash equivalents | (1,807,904) | (26,979) | |||||||||
| Cash from discontinued operation: | |||||||||||
| Net cash (used in) provided by operating activities of discontinued operation | (6,013) | 17,311 | |||||||||
| Net cash used in investing activities of discontinued operation | — | (1,338) | |||||||||
| Net cash used in financing activities of discontinued operation | — | (15,973) | |||||||||
| Net decrease in cash and cash equivalents | (1,813,917) | (26,979) | |||||||||
| Cash and cash equivalents at beginning of period | 1,952,073 | 45,822 | |||||||||
| Cash and cash equivalents at end of period | $ | 138,156 | $ | 18,843 | |||||||
10
Forward Air Corporation Reconciliation of Non-GAAP Financial Measures
In this press release, the Company includes financial measures that are derived on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States (GAAP). The Company believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions as well as evaluating the Company’s performance.
For the three months ended September 30, 2024 and 2023, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), and free cash flow.
All non-GAAP financial measures are presented on a continuing operations basis.
The Company believes that EBITDA improves comparability from period to period by removing the impact of its capital structure (interest and financing expenses), asset base (depreciation and amortization) and tax impacts. The Company believes that free cash flow is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance shareholder value.
The Company is also providing Consolidated EBITDA calculated in accordance with our credit agreement as we believe it provides investors with important information regarding our financial condition and compliance with our obligations under our credit agreement.
Non-GAAP financial measures should be viewed in addition to, and not as an alternative to or substitute for, the Company’s financial results prepared in accordance with GAAP. The Company has included, for the periods indicated, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Investors and other readers are encouraged to review the related U.S. GAAP financial measures and the reconciliations of the non-GAAP measures to their most directly comparable U.S. GAAP measures set forth below.
With respect to the 2024 Consolidated EBITDA guidance, please note that the Company is not providing a quantitative reconciliation of Consolidated EBITDA to Net Income because it is not available without unreasonable efforts. The Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation, or to quantify the probable significance of these items. The adjustments required for any such reconciliation of the Company’s forward-looking non-GAAP financial measures cannot be accurately forecast by the Company, and therefore the reconciliation has been omitted.
11
The following is a reconciliation of net income to Consolidated EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | (34,198) | $ | 6,493 | $ | (1,089,463) | $ | 57,524 | ||||||||||||||||||
| Interest expense | 52,770 | 2,655 | 140,788 | 7,595 | ||||||||||||||||||||||
| Income tax (benefit) expense | 1,302 | 2,541 | (191,990) | 20,091 | ||||||||||||||||||||||
| Depreciation and amortization | 25,893 | 14,209 | 106,321 | 39,826 | ||||||||||||||||||||||
| Reported EBITDA | 45,767 | 25,898 | (1,034,344) | 125,036 | ||||||||||||||||||||||
| Impairment of goodwill | 14,751 | — | 1,107,465 | — | ||||||||||||||||||||||
| Transaction and integration costs | (549) | 22,371 | 71,393 | 27,871 | ||||||||||||||||||||||
| Severance costs | 2,829 | 158 | 14,414 | 319 | ||||||||||||||||||||||
| Cost synergies | 7,267 | — | 23,518 | — | ||||||||||||||||||||||
| RIF cost savings | — | 5,509 | 10,576 | 15,875 | ||||||||||||||||||||||
| Other | 6,932 | 1,485 | 19,858 | 2,328 | ||||||||||||||||||||||
| Pro forma -Omni adjusted EBITDA | — | 37,293 | — | 128,574 | ||||||||||||||||||||||
| Consolidated EBITDA | $ | 76,997 | $ | 92,714 | $ | 212,880 | $ | 300,003 | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 52,597 | $ | 24,666 | $ | (44,327) | $ | 142,120 | ||||||||||||||||||
| Proceeds from sale of property and equipment | 1,087 | 104 | 2,493 | 3,275 | ||||||||||||||||||||||
| Purchases of property and equipment | (10,414) | (5,244) | (29,810) | (22,080) | ||||||||||||||||||||||
| Free cash flow | $ | 43,270 | $ | 19,526 | $ | (71,644) | $ | 123,315 | ||||||||||||||||||
12
Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements included in this press release relate to expectations regarding the Company’s long-term growth; ability to achieve and accelerate synergy capture and eliminate costs from our structure; expectations regarding the Company’s expedited freight business; ability to achieve the intended benefits of the acquisition of Omni Logistics, including any revenue and cost synergies; the Company’s expectations regarding the Company’s financial performance, including Consolidated EBITDA, and the impact it may have on the business and results of operations; and expectations regarding the Company's revenue growth strategies, including with respect to operational efficiency and cost control.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, the Company's ability to achieve the expected strategic, financial and other benefits of the acquisition of Omni Logistics, including the realization of expected synergies and the achievement of deleveraging targets within the expected timeframes or at all, the risk that the businesses will not be integrated successfully or that integration may be more difficult, time-consuming or costly than expected, the risk that operating costs, customer loss, management and employee retention and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) as a result of the acquisition of Omni Logistics may be greater than expected, continued weakening of the freight environment, future debt and financing levels, our ability to deleverage, including, without limitation, through capital allocation or divestitures of non-core businesses, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party carriers needed to serve our customers’ transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, changes in fuel prices, loss of a major customer, increasing competition, and pricing pressure, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2023, and as may be identified in our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
We caution readers that any forward-looking statement made by us in this press release is based only on information currently available to us and they should not place undue reliance on these forward-looking statements, which reflect management's opinion as of the date on which it is made. We undertake no obligation to publicly update any forward- looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise unless required by law.
13
Contact:
Investors:
Tony Carreño
Media:
Justin Moss
(404) 362-8933
14
Forward Air 3Q24 Earnings Presentation November 4, 2024
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements included in this presentation relate to expectations regarding customer demand for services of Forward Air Corporation (“Forward”, “we” or “us”) as well as expectations regarding the freight market, including any anticipated growth in the less-than-truckload sector; ability to achieve and timing of capturing the intended benefits of the acquisition of Omni Logistics, including any revenue and cost synergies; ability to improve liquidity; expectations regarding offering direct air and ocean services to certain regions and worldwide; ability to delever and focus on debt repayment; expectations regarding the timing and impact of forecasted or anticipated savings and ability to reach the run rate; Forward's ongoing commitment to provide excellent service to its customers; expectations regarding Forward's ability to execute on its plan to integrate Omni Logistics in order to generate long-term value for shareholders; expectations regarding Forward's ability to grow and retain its customer base, including the anticipated revenue generated from new customers; ability to run operations on a predictive and data-driven basis; capital allocation strategies, including the result of any portfolio review and expectations regarding our Consolidated EBITDA for the 2024 calendar year. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward- looking statements. Therefore, you should not rely on any of these forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, Forward's ability to achieve the expected strategic, financial and other benefits of the acquisition of Omni Logistics, including the realization of expected synergies and the achievement of deleveraging targets within the expected timeframes or at all, the risk that the businesses will not be integrated successfully or that integration may be more difficult, time-consuming or costly than expected, the risk that operating costs, customer loss, management and employee retention and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) as a result of the acquisition of Omni Logistics may be greater than expected, continued weakening of the freight environment, future debt and financing levels, our ability to deleverage, including, without limitation, through capital allocation or divestitures of non-core businesses, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party carriers needed to serve our customers’ transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, changes in fuel prices, loss of a major customer, increasing competition, and pricing pressure, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2023, and as may be identified in our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We caution readers that any forward-looking statement made by us in this presentation is based only on information currently available to us and they should not place undue reliance on these forward-looking statements, which reflect management's opinion as of the date on which it is made. We undertake no obligation to publicly update any forward- looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise unless required by law. Non-GAAP Measures To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), we have included Consolidated EBITDA, Consolidated EBITDA Margin, Consolidated EBITDA excluding RIF, Net Leverage Ratio, each a non-GAAP financial measure (each, a “Non-GAAP Measure”), in this presentation. The reconciliation of each Non-GAAP Measure to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in the Appendix to this presentation. Because each Non-GAAP Measure excludes certain items as described herein, it may not be indicative of the results that Forward expects to recognize for future periods. As a result, each Non-GAAP Measure should be considered in addition to, and not a substitute for, financial information prepared in accordance with GAAP. The Company is also providing Consolidated EBITDA and Net Leverage Ratio calculated in accordance with Forward’s credit agreement as we believe it provides investors with important information regarding our liquidity, financial condition and compliance with our obligations under our credit agreement. 2
AGENDA 01 02 3Q24 Highlights Integration Update03 04 Leverage and Liquidity Cash Flow 3 All figures throughout presentation in $ millions where applicable LTL KPIs Capital Allocation / Deleveraging Conclusion 06 07 05
3Q24 Performance Steady Amidst Challenging Market Backdrop $23M O P E R AT I N G I N C O ME $77M 11.7% margin C O N S O LI D AT E D E B I T D A ( 1 ) $460M L I Q U I D I T Y ( 2 ) 5.4x LT M C O V E N A N T N E T L E V E RA G E ( 1 ) 1. Non-GAAP financial measure. Please note that this is calculated pursuant to our credit agreement 2. Includes $2M of restricted cash and $15M of cash in foreign subsidiaries $656M R E V E N U E 4
1. Transaction-adjusted for Omni acquisition calculated in accordance with Article 11 of Regulation S-X. For more information, please see our 8-K filed on June 10, 2024 2. Non-GAAP financial measure. Please note that Consolidated EBITDA is calculated pursuant to credit agreement Sequential improvement at Omni segment largely offset by customer mix at Expedited segment Revenue Consolidated EBITDA(2) & Consolidated EBITDA(2) Margin 5 (1) (1)
Legacy Forward Air LTL Metrics Stable to Improving 6 Shipments per Day Weight per Shipment Revenue per Shipment Excluding Fuel In 000’s In pounds In $’s 3Q24 weight per shipment of 858 pounds with a 4.5% YoY increase Driven by strategic pricing decisions to target higher weight shipments (fewer minimums) and increase shipment density 3Q24 revenue per shipment, ex fuel of $207 with a 4.0% YoY increase Driven by the corrective pricing actions focused on updated DOE costing methodology and contribution margin management. Negative and low contribution margin accounts are proactively being managed, rerated, or canceled. 3Q24 shipments per day of 13K with a 2.3% YoY decrease Driven by overall volume decrease in the market and efforts to improve productivity and profitability with greater revenue and profit per shipment vs overall shipment volume (2.3)%3.4%1.4%(4.8)%(7.0)%(12)% 4.5%2.5%7.4%11.3%7.7%5.4% 4.0%3.7%0.7%2.4%0.2%(2.0)%% YoY Change
Omni Integration on Track 1Q24 Close Transaction $8.3M Cumulative Maintained service and corporate processes without interruption Shut down Omni’s linehaul operations and absorbed volume into FWRD’s network Began to execute facilities consolidation plan 2Q24 Action Items $22.9M Cumulative Executed organizational streamlining with headcount redundancies Transitioned local cartage from 3rd-party vendors to FWRD where accretive Continued to execute facilities consolidations 3Q24 Realize Savings $40.8M Cumulative Completed air freight transportation management system consolidation; additional systems conversions to continue into 2025 Roll out indirect spend initiatives using combined company’s improved buying power Continuing to progress facilities consolidations End of 1Q25 and Beyond (Run-Rate) ~$80M Annualized 4Q24 Refinement and Improvement $58.2M Cumulative Harmonization of corporate policies and human capital management in US Continue IT system consolidations Continue facilities consolidations Gross Synergies by Quarter in $M $8.3M $14.6M $17.9M $17.5M All synergy initiatives currently planned are expected to be actioned by the end of 1Q25 Costs to achieve depend on ability to secure lease terminations and sublets. Amount expected to decrease over time as lease overhang costs are mitigated from exited sites Continue to seek new synergy opportunities (Anticipated) $20.0M (Anticipated) 7
8 No Maturities Over Next 5 Years(1) Key Commentary $1,045 $725 2024 2025 2026 2027 2028 2029 2030 2031 First Lien Term Loan Senior Secured Notes No material maturities within the next 5 years(1) Long period of time to effectuate integration and transformation and garner benefits of combination No Maturities Until December 2030(1) 1. Excludes January 2029 maturity of Revolving Credit Facility (undrawn as of 3Q24)
1. Non-GAAP financial measure. Please note that is calculated pursuant to our credit agreement. 2. Includes Term Loan, Senior Secured Notes, and Revolving Credit Facility; excludes finance leases 3. Excludes foreign subsidiaries and restricted cash 4. Undrawn revolver balance 5. Totals may not foot due to rounding Deleveraging Remains a Key Priority for Management Through Potential Asset Sales and Operational Improvement $1,045$1,045$1,045Term Loan B $725$725$725Senior Sec. Notes $1,770$1,770$1,770First Lien Debt(2) $122$68$136Net Cash(3) $1,648$1,702$1,634Net Debt $307$325$324 Consolidated LTM EBITDA(1) Net Leverage(1) Liquidity Gross Cash: $105M Net Cash Revolving Credit Facility(4) Restricted Cash Deduction Foreign Subsidiary Deduction 9 Gross Cash: $138M(5) $445 $460(5) Net Leverage Ratio(1) Required Covenant Leverage Ratio(1) $512 Gross Cash: $172M
Remain Committed to Previously Announced Capital Allocation Plan with a Focus on Improving Performance 10 Deleverage Deleveraging is a key priority, demonstrated by $80M repayment of term loan in 1Q24 Actively reviewing portfolio to identify opportunities to dispose of any non-core assets Dividends and repurchases stand suspended with focus on deleveraging Dividend & Share Repurchases Improve operating performance and successfully integrate Omni to function as ONE company Operational Improvement
11 Significant Increase of Unrestricted Cash in 3Q24 1. Amounts exclude letters of credit restricted cash collateral Change in Unrestricted Cash (1) (1) Key Commentary 1• $27M Term Loan B interest payment • Professional fees associated with Omni transaction, integration, and other non- recurring items • Increased in unrestricted cash related to previously cash collateralized letters of credit moved onto revolving credit facility 2 3 1 2 3 Free Cash Flow 1 2 3 Pro Forma Unlevered Free Cash Flow 82$ (-) Debt Service (27) Pro Forma Levered Free Cash Flow 55$ (-) Transaction/Integration Fees (22) (+) LC Release 18 Net Change in Unrestricted Cash 52$ +$52M
12 3Q24 Summary Integration and Cost Reductions Progressing Cash and Liquidity Increasing Completed transaction in 1Q24 Brought in new senior leadership in April and May Actioned cost reduction items in late 1Q24 and 2Q24 Continuing as an industry leader in on-time service and claims rates Transforming from separate legal entity driven organizations to a product, service and operations driven team with stronger back-office support, process and procedure Deleveraging remains focused via asset rationalization and improved performance Cash flow inflected positive in 3Q24 Steady 3Q24 financial performance in the face of challenging market backdrop Ended 3Q24 in strong liquidity position
Appendix 13
Covenant Leverage Reconciliation 14 1. Non-GAAP financial measure. Reconciliations and other information required by Regulation G can be found in the Appendix section of the presentation 2. Reversal of previously expensed debt issuance costs that were reversed and capitalized in 3Q24 3. Non-GAAP financial measure. Please note that Consolidated EBITDA is calculated pursuant to our credit agreement 4. As defined in the RCFTL (Revolving Credit Facility Term Loan) credit agreement, represents total amount of debt outstanding, including Term Loan, Senior Secured Notes, and Revolving Credit Facility; excludes finance leases 5. As defined in the RCFTL credit agreement, excludes foreign subsidiaries of $15M (3Q24) and restricted cash of $2M (3Q24) Consolidated EBITDA Reconciliation 4Q23 1Q24 2Q24 3Q24 TTM (9/30/2024) Net Income $30 ($159) ($971) ($35) ($1,136) Business Dispositions (Final Mile) (117) (0) 5 1 (111) Impairment Charge / Asset Write-Off 0 0 1,099 15 1,114 Omni Merger Transaction Costs 61 96 2 (11) 148 Other (Severance, Retention, change in Fair Value etc.) (20) 43 34 19 76 Consolidated Net Income ($46) ($21) $169 ($12) $90 Net Interest Expense 67 53 47 53 221 Taxes 0 (16) (180) 3 (193) Depreciation and Amortization 33 20 37 26 115 Trans. Expenses, Integration Costs, & Other Normalizing 15 2 (2) 3 18 Pro Forma Cost Synergies 19 11 6 5 40 Consolidated EBITDA Excluding RIF ¹ $88 $49 $76 $77 $290 PF September 2024 Headcount Reduction Savings 6 6 5 0 16 Consolidated EBITDA ³ $94 $55 $81 $77 $307 Consolidated First Lien Indebtedness ⁴ 1,770 Net Cash and Cash Equivalents ⁵ (122) Net Debt $1,648 Consolidated First Lien Net Leverage Ratio 5.4x 1 2
1. Non-GAAP financial measure. Net Income to Consolidated EBITDA(1) Reconciliation 15 Consolidated EBITDA Reconciliation 4Q23 1Q24 2Q24 3Q24 Net (loss) income from continuing operations $3 ($89) ($966) ($34) Interest expense 24 41 47 53 Income tax (benefit) expense (6) (18) (175) 1 Depreciation and amortization 18 32 49 26 Reported EBITDA $39 ($35) ($1,046) $46 Impairment of goodwill -- -- 1,093 15 Transaction and integration costs 30 62 10 (1) Severance costs -- 8 4 3 Cost synergies -- 11 6 5 RIF cost savings 6 6 5 -- Other 3 3 9 9 Pro forma -Omni adjusted EBITDA 16 -- -- -- Consolidated EBITDA $94 $55 $81 $77
FY2024 YTD Segment Performance – Omni Logistics 16 1 1Q24 2Q24 3Q24 YTD FY24 Omni Logistics Operating revenue $225 $312 $335 $871 Operating expenses Purchased transportation 144 179 195 518 Salaries, wages, and employee benefits 49 58 55 161 Operating leases 19 27 28 73 Depreciation and amortization 17 33 11 61 Insurance and claims 2 3 3 8 Fuel expense 0 1 1 2 Other operating expenses 22 25 26 73 Impairment of goodwill - 1,093 15 1,107 Total operating expenses 253 1,418 333 2,005 Income (loss) from operations ($29) ($1,106) $1 ($1,133) (+) Impairment of goodwill - 1,093 15 1,107 Adjusted income (loss) from operations ($29) ($13) $16 ($26)
1Q24 2Q24 3Q24 YTD FY24 Expedited Freight Operating revenue $273 $291 $285 $849 Operating expenses Purchased transportation 128 143 140 410 Salaries, wages, and employee benefits 63 64 59 186 Operating leases 15 15 16 45 Depreciation and amortization 10 11 10 31 Insurance and claims 11 11 12 33 Fuel expense 3 2 2 7 Other operating expenses 25 24 26 75 Total operating expenses 254 269 265 789 Income (loss) from operations $19 $22 $19 $61 FY2024 YTD Segment Performance – Expedited Freight 17
FY2024 YTD Segment Performance – Intermodal 18 1 1Q24 2Q24 3Q24 YTD FY24 Intermodal Operating revenue $56 $59 $57 $173 Operating expenses Purchased transportation 17 19 18 55 Salaries, wages, and employee benefits 15 15 15 44 Operating leases 5 5 6 15 Depreciation and amortization 5 5 5 14 Insurance and claims 3 3 3 8 Fuel expense 2 2 2 7 Other operating expenses 6 6 6 17 Total operating expenses 53 54 53 160 Income (loss) from operations $4 $5 $4 $13
1Q24Pro Forma Net Income Reconciliation ($89)1Q 2024 Reported Net Income (71)Standalone Omni (January 1 – January 24, 2024) Net Income ($159)Pro Forma 1Q24 Net Income GAAP to Non-GAAP Reconciliation