Forward Air Corp 10-Q for FY2024 Q1

Forward Air Corp (FWRD)

10-Q 2024-05-15 For: 2024-03-31

Added on April 10, 2026

About this 10-Q

Forward Air Corp filed this 10-Q on May 15, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $541.81M; up 51.5% from $357.71M a year earlier
Net loss: $61.71M; compared with net income of $36.37M a year earlier
Diluted EPS: -$2.81; compared with $1.37 a year earlier

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Table of Contents
Forward Air Corporation

		Page
		Number
	Part I: Financial Information

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets – March 31 , 202 4 and December 31, 20 23	3

	Condensed Consolidated Statements of Comprehensive (L oss) Income - Three Months Ended March 3 1 , 202 4 and 20 23	4



	Condensed Consolidated Statements of Cash Flows – Three Months Ended March 3 1 , 202 4 and 20 23	5

	Condensed Consolidated Statements of Shareholders’ Equity – Three Months Ended March 3 1 , 202 4 and 20 23	7

	Notes to Condensed Consolidated Financial Statements – March 3 1 , 20 2 4	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47

Item 4.	Controls and Procedures	47

	Part II: Other Information

Item 1.	Legal Proceedings	48


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48

Item 3.	Defaults Upon Senior Securities	48

Item 4.	Mine Safety Disclosures	48

Item 5.	Other Information	48

Item 6.	Exhibits	49

Signatures		50


Part I.			Financial Information

Item 1.			Financial Statements (Unaudited).


Forward Air Corporation
Condensed Consolidated Balance Sheets
(unaudited and in thousands, except share and per share amounts)

	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	152,042	$	121,969
Restricted cash and restricted cash equivalents	20,228		39,604
Accounts receivable, less allowance of $3,644 in 2024 and $2,206 in 2023	351,813		153,267
Other receivables	1,539		5,408
Prepaid expenses	39,512		25,682
Other current assets	4,299		1,098

Total current assets	569,433		347,028

Noncurrent restricted cash equivalents	—		1,790,500
Property and equipment, net of accumulated depreciation and amortization of $263,856 in 2024 and $250,185 in 2023	327,706		258,095
Operating lease right-of-use assets	334,262		111,552

Goodwill	1,379,180		278,706
Other acquired intangibles, net of accumulated amortization of $145,141 in 2024 and $127,032 in 2023	1,264,428		134,789
Other assets	84,251		58,863

Total assets	$	3,959,260	$	2,979,533

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	130,646	$	45,430
Accrued expenses	118,955		62,948
Other current liabilities	73,461		71,727
Current portion of debt and finance lease obligations	28,134		12,645
Current portion of operating lease liabilities	93,645		44,344

Total current liabilities	444,841		237,094

Finance lease obligations, less current portion	34,306		26,736
Long-term debt, less current portion	1,664,107		—
Long-term debt held in escrow	—		1,790,500
Operating lease liabilities, less current portion	246,956		71,598
Liabilities under tax receivable agreement	13,270		—
Other long-term liabilities	45,536		47,144
Deferred income taxes	177,806		42,200


Shareholders' equity:
Preferred stock, $0.01 par value: Authorized shares - 5,000,000; no shares issued or outstanding in 2024 and 2023	—		—
Preferred stock, Class B, $0.01 par value: Authorized shares - 15,000; issued and outstanding shares - 4,435 in 2024 and none in 2023	—		—
Preferred stock, Class C, $0.01 par value: Authorized shares - 10,000; issued and outstanding shares - 1,210 in 2024 and none in 2023	—		—
Common stock, $0.01 par value: Authorized shares - 50,000,000; issued and outstanding shares - 26,438,420 in 2024 and 25,670,663 in 2023	265		257
Additional paid-in capital	508,675		283,684
Retained earnings	417,282		480,320
Accumulated other comprehensive loss	(151)		—
Total Forward Air shareholders' equity	926,071		764,261
Noncontrolling interest	406,367		—
Total shareholders' equity	1,332,438		764,261
Total liabilities and shareholders' equity	$	3,959,260	$	2,979,533


Forward Air Corporation
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
(unaudited and in thousands, except per share amounts)

	Three Months Ended
	March 31, 2024		March 31, 2023
Operating revenue	$	541,813	$	357,709

Operating expenses:
Purchased transportation	277,015		145,171
Salaries, wages and employee benefits	128,867		66,647
Operating leases	38,803		24,073
Depreciation and amortization	31,786		12,372
Insurance and claims	12,881		13,258
Fuel expense	5,246		5,686
Other operating expenses	112,947		43,306

Total operating expenses	607,545		310,513
(Loss) income from continuing operations	(65,732)		47,196

Other income and expenses:
Interest expense, net	(40,753)		(2,355)
Foreign exchange loss	(668)		—
Other income, net	9		—
Total other expense	(41,412)		(2,355)
(Loss) income before income taxes	(107,144)		44,841
Income tax (benefit) expense	(18,350)		10,937


Net (loss) income from continuing operations	(88,794)		33,904
Income from discontinued operation, net of tax	—		2,464
Net (loss) income	(88,794)		36,368
Net loss attributable to noncontrolling interest	(27,082)		—
Net (loss) income attributable to Forward Air	$	(61,712)	$	36,368

Basic net (loss) income per share attributable to Forward Air:
Continuing operations	$	(2.81)	$	1.28
Discontinued operations	—		0.09
Net (loss) income per basic share	$	(2.81)	$	1.37

Diluted net (loss) income per share attributable to Forward Air:
Continuing operations	$	(2.81)	$	1.27
Discontinued operations	—		0.09
Net (loss) income per diluted share	$	(2.81)	$	1.37

Dividends per share	$	—	$	0.24

Net (loss) income	$	(88,794)	$	36,368
Other comprehensive (loss) income:
Foreign currency translation adjustments	(151)		—
Comprehensive (loss) income	(88,945)		36,368
Comprehensive loss attributable to noncontrolling interest	(27,082)		—
Comprehensive (loss) income attributable to Forward Air	$	(61,863)	$	36,368


Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(unaudited and in thousands)

	Three Months Ended
	March 31, 2024		March 31, 2023

Operating activities:
Net (loss) income from continuing operations	$	(88,794)	$	33,904
Adjustments to reconcile net (loss) income of continuing operations to net cash (used in) provided by operating activities of continuing operations
Depreciation and amortization	31,786		12,372


Share-based compensation expense	1,567		2,906
Provision for revenue adjustments	1,038		1,098
Deferred income tax expense	2,945		1,857
Other	4,169		(1,091)
Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:
Accounts receivable	(20,495)		16,397
Other receivables	5,367		—
Other current and noncurrent assets	(7,104)		10,910
Accounts payable and accrued expenses	17,802		(17,514)
Net cash (used in) provided by operating activities of continuing operations	(51,719)		60,839

Investing activities:
Proceeds from sale of property and equipment	849		1,815
Purchases of property and equipment	(4,970)		(6,519)
Purchase of a business, net of cash acquired	(1,565,242)		(56,567)
Other	(89)		—
Net cash used in investing activities of continuing operations	(1,569,452)		(61,271)

Financing activities:
Repayments of finance lease obligations	(4,562)		(2,086)
Proceeds from credit facility	—		45,000
Payments on credit facility	(80,000)		—
Payment of debt issuance costs	(60,591)		—
Payment of earn-out liability	(12,247)		—

Payments of dividends to shareholders	—		(6,345)
Repurchases and retirement of common stock	—		(50,491)

Payment of minimum tax withholdings on share-based awards	(1,326)		(4,292)
Contributions from subsidiary held for sale	—		4,852
Net cash used in financing activities of continuing operations	(158,726)		(13,362)
Effect of exchange rate changes on cash	94		—
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents from continuing operations	(1,779,803)		(13,794)

Cash from discontinued operation:
Net cash provided by operating activities of discontinued operation	—		5,154
Net cash used in investing activities of discontinued operation	—		(270)
Net cash used in financing activities of discontinued operation	—		(4,884)
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents	(1,779,803)		(13,794)
Cash, cash equivalents and restricted cash equivalents at beginning of period of continuing operations	1,952,073		45,822
Cash at beginning of period of discontinued operation	—		—
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents	(1,779,803)		(13,794)
Less: cash at end of period of discontinued operation	—		—
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period of continuing operations	$	172,270	$	32,028


Forward Air Corporation
Consolidated Statements of Cash Flows
(In thousands)
	Three Months Ended
	March 31, 2024		March 31, 2023

Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents:
Cash and cash equivalents	$	152,042	$	32,028
Restricted cash and restricted cash equivalents	20,228		—
Noncurrent restricted cash equivalents	—		—
Total cash, cash equivalents, restricted cash and restricted cash equivalents shown in the statement of cash flow:	$	172,270	$	32,028

Non-Cash Transactions:
Equipment acquired under finance leases	$	1,936	$	5,842






	Common Stock			Additional Paid-in Capital		Retained Earnings		Total Shareholders’ Equity
	Shares	Amount
Balance at December 31, 2022	26,462	$	265	$	270,855	$	436,124	$	707,244
Net income	—	—		—		36,368		36,368

Share-based compensation expense	—	—		3,149		—		3,149
Payment of dividends to shareholders	—	—		4		(6,349)		(6,345)
Payment of minimum tax withholdings on share-based awards	(40)	—		—		(4,292)		(4,292)
Repurchases and retirement of common stock	(474)	(5)		—		(50,486)		(50,491)
Issuance of share-based awards	105	1		(1)		—		—
Balance at March 31, 2023	26,053	$	261	$	274,007	$	411,365	$	685,633


	Omni
Cash	$	100,499
Liabilities under tax receivable agreement	13,270
Common shares	32,795
Series B preferred shares (each issued with a corresponding Opco class B unit)	207,880
Series C preferred shares	56,713
Opco C-2 preferred units	359,493
Extinguishment of Omni's indebtedness	1,543,003
Preliminary purchase price	$	2,313,653


	Land Air		Omni
	January 31, 2023		January 25, 2024
Tangible assets:
Cash	$	—	$	78,260
Accounts receivable	—		181,570


Property and equipment	738		75,292
Other assets	—		35,639
Operating lease right-of-use assets	—		234,025
Total tangible assets	738		604,786
Intangible assets:
Customer relationships	35,200		1,062,729
Non-compete agreements	—		42,509
Trademarks and other	—		42,510
Goodwill	20,629		1,100,474
Total intangible assets	55,829		2,248,222
Total assets acquired	56,567		2,853,008

Liabilities assumed:
Current liabilities	—		156,408
Finance lease obligations	—		14,606
Operating lease liabilities	—		234,025
Other liabilities	—		643
Deferred income taxes	—		133,673

Total liabilities assumed	—		539,355
Net assets acquired	$	56,567	$	2,313,653


	Estimated Useful Lives
	Land Air	Omni
Customer relationships	15 years	12 years
Non-compete agreements	—	5 years
Trademarks and other	—	5 years


	Expedited Freight		Intermodal		Omni Logistics		Consolidated




Balance as of December 31, 2023	$	141,720	$	136,986	$	—	$	278,706
Acquisition	—		—		1,100,474		1,100,474

Balance as of March 31, 2024	$	141,720	$	136,986	$	1,100,474	$	1,379,180


	Gross Carrying Amount
	Customer Relationships1		Non-Compete Agreements		Trade Names		Total
Balance as of December 31, 2023	$	253,914	$	6,407	$	1,500	$	261,821
Acquisition	1,062,729		42,509		42,510		1,147,748
Balance as of March 31, 2024	$	1,316,643	$	48,916	$	44,010	$	1,409,569


	Accumulated Amortization
	Customer Relationships1		Non-Compete Agreements		Trade Names		Total
Balance as of December 31, 2023	$	118,993	$	6,539	$	1,500	$	127,032
Amortization expense	15,243		1,449		1,417		18,109
Balance as of March 31, 2024	$	134,236	$	7,988	$	2,917	$	145,141


	Stock Options	Weighted-Average Exercise Price
Outstanding as of January 1	370	$	76.83
Granted	—	—
Exercised	—	—
Forfeited	(83)	73.02
Outstanding as of March 31	287	$	77.93


	Restricted Shares	Weighted-Average Grant Date Fair Value
Outstanding as of January 1	133	$	104.87
Granted	360	33.46
Vested	(62)	98.36
Forfeited	(13)	99.84
Outstanding as of March 31	418	$	44.41


	Performance Awards	Weighted-Average Grant Date Fair Value
Outstanding as of January 1	61	$	105.88
Granted	116	7.62
Additional shares awarded based on performance	14	91.33
Earned	(39)	89.34
Forfeited or unearned	(23)	115.17
Outstanding as of March 31	129	$	19.15





	Three Months Ended
	March 31, 2024		Percent of Revenue		March 31, 2023		Percent of Revenue		Change		Percent Change
Operating revenues:
Network1	$	214,493	78.5	%	$	205,931	76.4	%	$	8,562	4.2	%
Truckload	37,055		13.6		41,744		15.5		(4,689)		(11.2)
Other	21,747		7.9		21,902		8.1		(155)		(0.7)
Total operating revenues	273,295		100.0		269,577		100.0		3,718		1.4

Operating expenses:
Purchased transportation	127,760		46.7		125,194		46.4		2,566		2.0
Salaries, wages and employee benefits	62,553		22.9		55,918		20.7		6,635		11.9
Operating leases	14,982		5.5		15,738		5.8		(756)		(4.8)
Depreciation and amortization	10,290		3.8		7,626		2.8		2,664		34.9
Insurance and claims	10,652		3.9		9,219		3.4		1,433		15.5
Fuel expense	2,581		0.9		2,513		0.9		68		2.7
Other operating expenses	24,979		9.2		23,684		9.0		1,295		5.5

Total operating expenses	253,797		92.9		239,892		89.0		13,905		5.8
Income from operations	$	19,498	7.1	%	$	29,685	11.0	%	$	(10,187)	(34.3)	%

1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue.


Expedited Freight Operating Statistics

	Three Months Ended
	March 31, 2024		March 31, 2023		Percent Change
Business days	64		64		—	%

Tonnage1,2
Total pounds	684,995		629,080		8.9
Pounds per day	10,703		9,829		8.9

Shipments1,2
Total shipments	828		817		1.4
Shipments per day	12.9		12.8		1.4

Weight per shipment	827		770		7.4

Revenue per hundredweight3	$	31.32	$	33.36	(6.1)
Revenue per hundredweight, ex fuel3	$	24.15	$	25.75	(6.2)

Revenue per shipment3	$	259.14	$	256.89	0.9
Revenue per shipment, ex fuel3	$	199.78	$	198.30	0.7

1 In thousands
2 Excludes accessorial and Truckload products
3 Includes intercompany revenue between the Network and Truckload revenue streams





	Three Months Ended
	March 31, 2024		Percent of Revenue		March 31, 2023		Percent of Revenue		Change		Percent Change
Operating revenues	$	56,292	100.0	%	$	88,169	100.0	%	$	(31,877)	(36.2)	%

Operating expenses:
Purchased transportation	17,443		31.0		20,014		22.7		(2,571)		(12.8)
Salaries, wages and employee benefits	15,082		26.8		18,914		21.5		(3,832)		(20.3)
Operating leases	4,692		8.3		8,335		9.5		(3,643)		(43.7)
Depreciation and amortization	4,627		8.2		4,746		5.4		(119)		(2.5)
Insurance and claims	2,606		4.6		2,349		2.7		257		10.9
Fuel expense	2,361		4.2		3,173		3.6		(812)		(25.6)
Other operating expenses	5,895		10.5		19,435		21.9		(13,540)		(69.7)
Total operating expenses	52,706		93.6		76,966		87.3		(24,260)		(31.5)
Income from operations	$	3,586	6.4	%	$	11,203	12.7	%	$	(7,617)	(68.0)	%


	Director Restricted Shares	Weighted-Average Grant Date Fair Value
Outstanding as of January 1	14	$	96.10
Granted	2	38.46
Vested	—	—
Forfeited	—	—
Outstanding as of March 31	16	$	89.69


	March 31, 2024		December 31, 2023
Term Loan, expiring 2030 1	$	1,045,000	$	—
Senior Secured Notes, maturing 2031 1	725,000		—
Debt issuance discount	(58,551)		—
Debt issuance costs 2	(36,092)		—
	1,675,357		—

Less: Current portion of long-term debt	(11,250)		—
Total long-term debt, less current portion	$	1,664,107	$	—

1 On December 31, 2023 the debt instruments and related proceeds were consolidated but were restricted under an escrow agreement contingent upon the Closing of the Omni Acquisition.
2 Debt issuance costs of $11,275 related to the Revolving Credit Facility are recorded in Other Assets.


	As of March 31, 2024
	Level 1		Level 2		Level 3		Total
Liabilities under tax receivable agreement	$	—	$	—	$	13,270	$	13,270

	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
Liabilities under tax receivable agreement	$	—	$	—	$	—	$	—



	Three Months Ended March 31, 2024
	Expedited Freight		Intermodal		Omni Logistics		Corporate		Eliminations		Consolidated
External revenues	$	260,753	$	56,222	$	224,838	$	—	$	—	$	541,813
Intersegment revenues	12,542		70		—		—		(12,612)		—
Depreciation	9,013		2,066		2,598		—		—		13,677
Amortization	1,277		2,561		14,271		—		—		18,109
Income (loss) from operations	19,498		3,586		(28,585)		(60,231)		—		(65,732)
Purchases of property and equipment	1,262		1,522		2,186		—		—		4,970

	Three Months Ended March 31, 2023
	Expedited Freight		Intermodal		Omni Logistics		Corporate		Eliminations		Consolidated
External revenues	$	269,547	$	88,162	$	—	$	—	$	—	$	357,709
Intersegment revenues	30		7		—		—		(37)		—
Depreciation	6,668		2,186		—		—		—		8,854
Amortization	958		2,560		—		—		—		3,518
Income (loss) from operations	29,685		11,203		—		6,308		—		47,196
Purchases of property and equipment	6,343		176		—		—		—		6,519


Intermodal Operating Statistics

	Three Months Ended
	March 31, 2024		March 31, 2023		Percent Change
Drayage shipments	62,659		72,465		(13.5)	%
Drayage revenue per shipment	$	822	$	1,136	(27.6)	%


No.						Exhibit

3.1						Restated Charter of the registrant (incorporated herein by reference to Exhibit 3 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 1999 (File No. 0-22490))
3.2						Amended and Restated Bylaws of the registrant (incorporated herein by reference to Exhibit 3.2 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on March 1, 2023)
3.3						Articles of Amendment to the Restated Charter of the registrant (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024)
10.1						Release and Separation Agreement, by and between the registrant and Thomas Schmitt, dated March 19, 2024
10.2						Shawn St ewart Employment Agreement dated as of April 2 8 , 202 4
10.3						Participation and Restrictive Covenants Agreement, by and between the registrant and Shawn Stewart, dated April 22 , 2024
10.4						Term Sheet for Opco LLC Agreement
31.1						Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))
31.2						Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))
32.1						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
101.DEF						XBRL Taxonomy Extension Definition Linkbase
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101.PRE						XBRL Taxonomy Extension Presentation Linkbase
104						Cover Page Interactive File (formatted in Inline XBRL and contained in Exhibit 101).


		Forward Air Corporation
May 15, 2024	By:	/s/ Shawn Stewart
		Shawn Stewart Chief Executive Officer (Principal Executive Officer and Duly Authorized Officer)


		Forward Air Corporation
May 15, 2024	By:	/s/ Rebecca J. Garbrick
		Rebecca J. Garbrick Chief Financial Officer and Treasurer (Principal Financial Officer, Principal Accounting Officer, and Duly Authorized Officer)


1			I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2024 of Forward Air Corporation;


2			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4			The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


Date: May 15, 2024
						/s/ Shawn Stewart
						Shawn Stewart Chief Executive Officer


1			The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


2			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.