Less-than-Truckload Volume Trending
Positive
Executing Comprehensive Efforts to Integrate
Omni Logistics
Continued Strong Commitment to Delivering
Exceptional Service to Customers
Forward Air Corporation (NASDAQ:FWRD) (the “Company”, “we”,
“our”, or “us”) today reported financial results for the three and
twelve months ended December 31, 2023 as presented in the tables
below on a continuing operations basis (Final Mile is being
reported as a discontinued operation).
Michael Hance, Interim Chief Executive Officer said, “Execution
of our revenue growth strategies in the fourth quarter led to
positive volume trends and improved freight quality metrics. While
the softer freight conditions persisted throughout the fourth
quarter of 2023, we saw momentum in our less-than-truckload line of
business with pounds per day growth of +6% over the same period in
the prior year and improvement in our freight quality as our weight
per shipment increased +11% over the same period in the prior year.
A continuation of the challenging market conditions led to
decreased customer demand for our intermodal and truckload
brokerage services throughout the fourth quarter. The softer demand
for our intermodal and truckload brokerage services, partially
offset by the positive trends in the less-than-truckload services,
resulted in a 16% decline in revenue over the prior year on a
consolidated, continuing operations basis, within the guidance
range of a decline of 9% to 19%. Adjusted net income per diluted
share on a continuing operations basis was $0.81 for the fourth
quarter, above the guidance range of $0.78 to $0.80.”
Mr. Hance continued, “On January 25, 2024, we closed on the
acquisition of Omni Logistics, positioning the combined entity to
be the premier provider of choice for mission-critical freight
transportation to a larger customer base with an expanded
footprint. As I have gotten to know our new teammates from Omni
Logistics, it is clear to me that Forward and Omni share a common
DNA focused on the delivery of excellent customer experience. I am
excited about what is ahead for our combined company.
We are taking a thoughtful approach to the integration of the
two entities aimed at driving measurable value to our customers,
creating opportunities for employees and generating long-term value
for shareholders. We began executing our comprehensive integration
plan promptly after closing on the acquisition with the first
meaningful operational cost synergy realized from folding the Omni
Logistics linehaul into the Forward linehaul network. We look
forward to keeping shareholders updated on our progress.”
Mr. Hance concluded, “While our customer base has expanded, we
remain committed to enabling our freight forwarder customers to
continue to grow with us. Volumes from that channel remain strong.
Our unwavering pledge is to provide a less-than-truckload service
that is the best in the industry for damage-free, intact, on-time
shipments, making us the most compelling choice for customers with
mission-critical freight needs. For the fourth quarter, we are
pleased to share our on-time service performance was 98% and our
cargo claims ratio was 0.09%. I would like to thank our employees
and independent contractors for their remarkable efforts to
consistently provide excellent service to our customers.”
Rebecca J. Garbrick, Chief Financial Officer, said, “In the past
we provided revenue and net income per diluted share guidance, with
updates as deemed necessary. However, we have decided to
temporarily discontinue our practice of giving earnings guidance
due to the on-going integration of Omni Logistics, which we began
executing on three weeks ago. Forward is dedicated to maintaining
transparency and fostering open communications with its
shareholders. We plan to regularly reevaluate our approach to
guidance and to provide updates on key milestones and
achievements.”
Continuing Operations
Three Months Ended
(in thousands, except per share
data)
December 31, 2023
December 31, 2022
Change
Percent Change
Operating revenue
$
338,428
$
403,039
$
(64,611
)
(16.0
)%
Income from operations
$
3,000
$
56,330
$
(53,330
)
(94.7
)%
Operating margin
0.9
%
14.0
%
(1,310) bps
Net income
$
(14,721
)
$
39,009
$
(53,730
)
(137.7
)%
Net income per diluted share
$
(0.58
)
$
1.45
$
(2.03
)
(140.0
)%
Cash provided by operating activities
$
57,092
$
57,445
$
(353
)
(0.6
)%
Non-GAAP Financial Measures: 1
Adjusted income from operations
$
32,619
$
58,364
$
(25,745
)
(44.1
)%
Adjusted net income
$
20,927
$
40,469
$
(19,542
)
(48.3
)%
Adjusted net income per diluted share
$
0.81
$
1.51
$
(0.7
)
(46.4
)%
Adjusted EBITDA
$
50,198
$
69,494
$
(19,296
)
(27.8
)%
Free cash flow
$
48,913
$
43,476
$
5,437
12.5
%
1 Reconciliation of these non-GAAP
financial measures are provided below the financial tables.
Continuing Operations
Twelve Months Ended
(in thousands, except per share
data)
December 31, 2023
December 31, 2022
Change
Percent Change
Operating revenue
$
1,370,735
$
1,679,634
$
(308,899
)
(18.4
)%
Income from operations
$
88,210
$
247,591
$
(159,381
)
(64.4
)%
Operating margin
6.4
%
14.7
%
(830) bps
Net income
$
42,803
$
179,414
$
(136,611
)
(76.1
)%
Net income per diluted share
$
1.64
$
6.63
$
(4.99
)
(75.3
)%
Cash provided by operating activities
$
199,212
$
250,161
$
(50,949
)
(20.4
)%
Non-GAAP Financial Measures: 1
Adjusted income from operations
$
145,700
$
249,331
$
(103,631
)
(41.6
)%
Adjusted net income
$
102,255
$
180,704
$
(78,449
)
(43.4
)%
Adjusted net income per diluted share
$
3.92
$
6.67
$
(2.75
)
(41.2
)%
Adjusted EBITDA
$
203,105
$
292,177
$
(89,072
)
(30.5
)%
Free cash flow
$
172,228
$
213,279
$
(41,051
)
(19.2
)%
1 Reconciliation of these non-GAAP
financial measures are provided below the financial tables.
The Board of Directors approved a strategy to divest the Final
Mile business (“Final Mile”) and the sale of Final Mile was
completed on December 20, 2023. Accordingly, the results of
operations and cash flows for Final Mile have been presented as a
discontinued operation and have been excluded from continuing
operations in this release for all periods presented. In addition,
Final Mile assets and liabilities were reflected as “held for sale”
on the Condensed Consolidated Balance Sheets in the press release
for the prior period.
In line with the Company’s prudent approach to capital
allocation and the focus on reducing leverage, the Board of
Directors has made the decision to suspend Forward’s quarterly
dividend while the Company continues to execute on de-risking the
capital structure. This change will begin with the first quarter of
2024 dividend that would have been paid in March. The Board of
Directors and management will continue to monitor progress and will
reevaluate the quarterly dividend as leverage targets are
achieved.
Review of Financial Results
Forward Air will hold a conference call to discuss fourth
quarter 2023 results on Thursday, February 29, 2024 at 9:00 a.m.
ET. The Company’s conference call will be available online on the
Investor Relations portion of the Company’s website at
www.forwardaircorp.com, or by dialing (800) 579-2543, Conference
ID: FWRDQ423.
A replay of the conference call will be available on the
Investor Relations portion of the Company’s website at
www.forwardaircorp.com, which we use as a primary mechanism to
communicate with our investors. Investors are urged to monitor the
Investors 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 (“LTL”) 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.
Forward Air
Corporation
Condensed Consolidated
Statements of Comprehensive Income
(Unaudited, in thousands,
except per share data)
Three Months Ended
Twelve Months Ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Operating revenue:
Expedited Freight
$
279,070
$
294,646
$
1,096,958
$
1,260,121
Intermodal
59,440
108,446
274,043
419,718
Eliminations and other operations
(82
)
(53
)
(266
)
(205
)
Operating revenue
338,428
403,039
1,370,735
1,679,634
Operating expenses:
Purchased transportation
150,351
165,934
586,195
730,412
Salaries, wages and employee benefits
71,583
72,220
287,566
302,759
Operating leases
20,908
22,933
87,413
85,290
Depreciation and amortization
17,579
11,130
57,405
42,552
Insurance and claims
11,145
11,881
50,133
47,478
Fuel expense
5,271
6,557
22,004
26,956
Other operating expenses
58,591
56,054
191,809
196,596
Total operating expenses
335,428
346,709
1,282,525
1,432,043
Income (loss) from continuing
operations
Expedited Freight
26,745
38,792
116,040
192,583
Intermodal
5,068
13,869
25,327
56,874
Other operations
(28,813
)
3,669
(53,157
)
(1,866
)
Income from continuing operations
3,000
56,330
88,210
247,591
Other expense:
Interest expense
(23,976
)
(1,617
)
(31,571
)
(5,138
)
Other, net
—
—
—
—
Total other expense
(23,976
)
(1,617
)
(31,571
)
(5,138
)
(Loss) Income before income taxes
(20,976
)
54,713
56,639
242,453
Income tax expense
(6,255
)
15,704
13,836
63,039
Net (loss) income from continuing
operations
(14,721
)
39,009
42,803
179,414
Income from discontinued operation, net of
tax
116,465
3,933
124,548
13,777
Net income and comprehensive income
$
101,744
$
42,942
$
167,351
$
193,191
Net income per share:
Basic net (loss) income per
share:
Continuing operations
$
(0.58
)
$
1.46
$
1.64
$
6.66
Discontinued operation
4.51
0.15
4.78
0.51
Net income per basic share1
$
3.94
$
1.61
$
6.42
$
7.17
Diluted net (loss) income per
share:
Continuing operations
$
(0.58
)
$
1.45
$
1.64
$
6.63
Discontinued operation
4.51
0.15
4.77
0.51
Net income per diluted share1
$
3.93
$
1.60
$
6.40
$
7.14
Dividends per share:
$
0.24
$
0.24
$
0.96
$
0.96
1 Rounding may impact summation of
amounts.
Expedited Freight Segment
Information
(In thousands)
(Unaudited)
Three Months Ended
December 31, 2023
Percent of Revenue
December 31, 2022
Percent of Revenue
Change
Percent Change
Operating revenue:
Network 1
$
217,279
77.9
%
$
221,763
75.3
%
$
(4,484
)
(2.0
)%
Truckload
38,538
13.8
50,320
17.1
(11,782
)
(23.4
)
Other
23,253
8.3
22,563
7.7
690
3.1
Total operating revenue
279,070
100.0
294,646
100.0
(15,576
)
(5.3
)
Operating expenses:
Purchased transportation
132,359
47.4
140,772
47.8
(8,413
)
(6.0
)
Salaries, wages and employee benefits
56,291
20.2
57,272
19.4
(981
)
(1.7
)
Operating leases
15,396
5.5
14,596
5.0
800
5.5
Depreciation and amortization
12,328
4.4
7,192
2.4
5,136
71.4
Insurance and claims
9,438
3.4
9,326
3.2
112
1.2
Fuel expense
2,906
1.0
2,762
0.9
144
5.2
Other operating expenses
23,607
8.5
23,934
8.1
(327
)
(1.4
)
Total operating expenses
252,325
90.4
255,854
86.8
(3,529
)
(1.4
)
Income from operations
$
26,745
9.6
%
$
38,792
13.2
%
$
(12,047
)
(31.1
)%
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
December 31, 2023
December 31, 2022
Percent Change
Business days
63
63
—
%
Tonnage 1,2
Total pounds
689,621
648,012
6.4
Pounds per day
10,946
10,286
6.4
Shipments 1,2
Total shipments
846
885
(4.4
)
Shipments per day
13.4
14.0
(4.3
)
Weight per shipment
815
732
11.3
Revenue per hundredweight 3
$
31.52
$
34.68
(9.1
)
Revenue per hundredweight, ex fuel 3
$
23.99
$
26.07
(8.0
)
Revenue per shipment 3
$
256.90
$
253.83
1.2
Revenue per shipment, ex fuel 3
$
195.52
$
190.84
2.5
1 In thousands.
2 Excludes accessorial and Truckload
products.
3 Includes intercompany revenue between
the Network and Truckload revenue streams.
Intermodal Segment
Information
(In thousands)
(Unaudited)
Three Months Ended
December 31, 2023
Percent of Revenue
December 31, 2022
Percent of Revenue
Change
Percent Change
Operating revenue
$
59,440
100.0
%
$
108,446
100.0
%
$
(49,006
)
(45.2
)%
Operating expenses:
Purchased transportation
18,073
30.4
25,215
23.3
(7,142
)
(28.3
)
Salaries, wages and employee benefits
15,243
25.6
18,695
17.2
(3,452
)
(18.5
)
Operating leases
5,512
9.3
8,337
7.7
(2,825
)
(33.9
)
Depreciation and amortization
5,251
8.8
3,938
3.6
1,313
33.3
Insurance and claims
2,398
4.0
2,448
2.3
(50
)
(2.0
)
Fuel expense
2,365
4.0
3,795
3.5
(1,430
)
(37.7
)
Other operating expenses
5,530
9.3
32,149
29.6
(26,619
)
(82.8
)
Total operating expenses
54,372
91.5
94,577
87.2
(40,205
)
(42.5
)
Income from operations
$
5,068
8.5
%
$
13,869
12.8
%
$
(8,801
)
(63.5
)%
Intermodal Operating
Statistics
Three Months Ended
December 31, 2023
December 31, 2022
Percent Change
Drayage shipments
65,776
74,532
(11.7
)%
Drayage revenue per shipment
$
821
$
1,369
(40.0
)%
Forward Air
Corporation
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
December 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
121,969
$
45,822
Restricted cash equivalents
39,604
—
Accounts receivable, net
153,267
188,229
Other receivables, net
5,408
—
Other current assets
26,780
35,322
Current assets held for sale
—
34,942
Total current assets
347,028
304,315
Noncurrent restricted cash equivalents
1,790,500
—
Property and equipment, net
258,096
246,329
Operating lease right-of-use assets
111,552
131,097
Goodwill
278,706
257,987
Other acquired intangibles, net
134,789
115,582
Other assets
58,862
51,739
Noncurrent assets held for sale
—
101,027
Total assets
$
2,979,533
$
1,208,076
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
45,430
$
50,094
Accrued expenses
62,948
49,918
Other current liabilities
71,727
3,944
Current portion of debt and finance lease
obligations
12,645
9,315
Current portion of operating lease
liabilities
44,344
42,266
Current liabilities held for sale
—
13,861
Total current liabilities
237,094
169,398
Finance lease obligations, less current
portion
26,736
15,711
Long-term debt, less current portion and
debt issuance costs
—
106,588
Long-term debt held in escrow
1,790,500
—
Operating lease liabilities, less current
portion
71,598
92,903
Other long-term liabilities
47,144
59,044
Deferred income taxes
42,200
51,093
Noncurrent liabilities held for sale
—
6,095
Shareholders’ equity:
Preferred stock
—
—
Common stock
257
265
Additional paid-in capital
283,684
270,855
Retained earnings
480,320
436,124
Total shareholders’ equity
764,261
707,244
Total liabilities and shareholders’
equity
$
2,979,533
$
1,208,076
Forward Air
Corporation
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
December 31, 2023
December 31, 2022
Operating activities:
Net (loss) income from continuing
operations
$
(14,721
)
$
39,009
Adjustments to reconcile net income of
continuing operations to net cash provided by operating activities
of continuing operations:
Depreciation and amortization
17,579
11,130
Change in fair value of earn-out
liability
—
—
Share-based compensation expense
2,938
2,417
Provision for revenue adjustments
1,065
1,888
Deferred income tax expense
(11,092
)
5,724
Other
(135
)
(1,019
)
Changes in operating assets and
liabilities, net of effects from the purchase of acquired
companies:
Accounts receivable
9,588
26,077
Other receivables
(5,408
)
—
Other current and noncurrent assets
27,061
(19,700
)
Accounts payable, accrued expenses and
other long-term liabilities
30,217
(8,081
)
Net cash provided by operating activities
of continuing operations
57,092
57,445
Investing activities:
Proceeds from sale of property and
equipment
466
949
Purchases of property and equipment
(8,645
)
(14,918
)
Purchase of businesses, net of cash
acquired
—
(25,672
)
Net cash used in investing activities of
continuing operations
(8,179
)
(39,641
)
Financing activities:
Proceeds from credit facility
25,000
—
Payments on credit facility
(147,375
)
(375
)
Proceeds from long-term debt held in
escrow
1,790,500
—
Repayments of finance lease
obligations
(2,660
)
(1,876
)
Payment of debt issuance costs
—
—
Proceeds from issuance of common stock
upon stock option exercises
—
—
Payments of dividends to shareholders
(6,197
)
(6,404
)
Repurchases and retirement of common
stock
—
(14,997
)
Proceeds from common stock issued under
employee stock purchase plan
379
409
Payment of minimum tax withholdings on
share-based awards
(25
)
(37
)
Contributions from subsidiary held for
sale
224,695
4,452
Net cash provided by (used in) financing
activities of continuing operations
1,884,317
(18,828
)
Net increase (decrease) in cash of
continuing operations
1,933,230
(1,024
)
Cash from discontinued
operation:
Net cash (used in) provided by operating
activities of discontinued operation
(35,135
)
4,831
Net cash provided by (used in) investing
activities of discontinued operation
259,863
(410
)
Net cash (used in) provided by financing
activities of discontinued operation
(224,728
)
(4,421
)
Net increase (decrease) in cash and cash
equivalents
1,933,230
(1,024
)
Cash, cash equivalents, and restricted
cash at beginning of period of continuing operations
18,843
46,846
Cash at beginning of period of
discontinued operations
—
—
Net increase (decrease) in cash, cash
equivalents, and restricted cash
1,933,230
(1,024
)
Less: cash at end of period of
discontinued operation
—
—
Cash, cash equivalents, and restricted
cash at end of period of continuing operations
$
1,952,073
$
45,822
Forward Air
Corporation
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Year Ended
December 31, 2023
December 31, 2022
Operating activities:
Net income from continuing operations
$
42,803
$
179,414
Adjustments to reconcile net income of
continuing operations to net cash provided by operating activities
of continuing operations:
Depreciation and amortization
57,405
42,552
Change in fair value of earn-out
liability
—
(294
)
Share-based compensation expense
11,508
10,670
Provision for revenue adjustments
5,091
6,426
Deferred income tax expense
(8,893
)
7,686
Other
(1,180
)
(1,279
)
Changes in operating assets and
liabilities, net of effects from the purchase of acquired
companies:
Accounts receivable
30,555
(2,588
)
Other receivables
(5,408
)
8,097
Other current and noncurrent assets
30,670
(13,289
)
Accounts payable, accrued expenses and
other long-term liabilities
36,661
12,766
Net cash provided by operating activities
of continuing operations
199,212
250,161
Investing activities:
Proceeds from sale of property and
equipment
3,741
2,372
Purchases of property and equipment
(30,725
)
(39,254
)
Purchase of businesses, net of cash
acquired
(56,703
)
(66,105
)
Net cash used in investing activities of
continuing operations
(83,687
)
(102,987
)
Financing activities:
Proceeds from credit facility
70,000
—
Payments on credit facility
(178,500
)
(49,000
)
Proceeds from long-term debt held in
escrow
1,790,500
—
Repayments of finance lease
obligations
(9,500
)
(6,108
)
Payment of debt issuance costs
—
—
Proceeds from issuance of common stock
upon stock option exercises
—
206
Payment of earn-out liability
—
(91
)
Payments of dividends to shareholders
(24,995
)
(25,865
)
Repurchases and retirement of common
stock
(93,811
)
(62,771
)
Proceeds from common stock issued under
employee stock purchase plan
800
783
Payment of minimum tax withholdings on
share-based awards
(4,340
)
(3,330
)
Contributions from subsidiary held for
sale
240,572
7,508
Net cash provided by (used in) financing
activities of continuing operations
1,790,726
(138,668
)
Net increase in cash and cash equivalents
of continuing operations
1,906,251
8,506
Cash from discontinued
operation:
Net cash (used in) provided by operating
activities of discontinued operations
(17,824
)
8,929
Net cash provided by (used in) investing
activities of discontinued operation
258,525
(1,475
)
Net cash used in financing activities of
discontinued operation
(240,701
)
(7,454
)
Net increase in cash and cash
equivalents
1,906,251
8,506
Cash, cash equivalents, and restricted
cash at beginning of period of continuing operations
45,822
37,316
Cash at beginning of period of
discontinued operations
—
—
Net increase (decrease) in cash, cash
equivalents, and restricted cash
1,906,251
8,506
Less: cash at end of period of
discontinued operations
—
—
Cash, cash equivalents, and restricted
cash at end of period of continuing operations
$
1,952,073
$
45,822
Forward Air Corporation Reconciliation of Non-GAAP Financial
Measures
In this press release, the Company uses non-GAAP financial
measures that are derived on the basis of methodologies other than
in accordance with 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 and twelve months ended December 31, 2023 and
2022, this press release contains the following non-GAAP financial
measures: earnings before interest, taxes, depreciation and
amortization (“EBITDA”), adjusted EBITDA, free cash flow, adjusted
income from continuing operations, adjusted net income, and
adjusted net income per diluted share. 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 believes providing adjusted EBITDA,
adjusted income from operations, adjusted net income and adjusted
net income per diluted share allows investors to compare Company
performance consistently over various periods without regard to the
impact of unusual, nonrecurring or nonoperational items.
Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, the Company’s financial results prepared
in accordance with GAAP. Non-GAAP financial information does not
represent a comprehensive basis of accounting. As required by the
Securities and Exchange Act of 1933 and the rules and regulations
promulgated thereunder, the Company has included, for the periods
indicated, a reconciliation of the non-GAAP financial measure to
the most directly comparable GAAP financial measure.
The following is a reconciliation of net income to adjusted
EBITDA for the three and twelve months ended December 31, 2023 and
2022 (in thousands):
Three Months Ended
Twelve Months Ended
Continuing Operations
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net income
$
(14,721
)
$
39,009
$
42,803
$
179,414
Interest expense
23,976
1,617
31,571
5,138
Income tax expense
(6,255
)
15,704
13,836
63,039
Depreciation and amortization
17,579
11,130
57,405
42,552
Reported EBITDA
20,579
67,460
145,615
290,143
Vehicle liability reserve
—
1,500
—
1,500
Due diligence, integration and transaction
costs
29,619
534
57,490
534
Adjusted EBITDA
$
50,198
$
69,494
$
203,105
$
292,177
The following is a reconciliation of net cash provided by
operating activities to free cash flow for the three and twelve
months ended December 31, 2023 and 2022 (in thousands):
Three Months Ended
Twelve Months Ended
Continuing Operations
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net cash provided by operating
activities
$
57,092
$
57,445
$
199,212
$
250,161
Proceeds from sale of property and
equipment
466
949
3,741
2,372
Purchases of property and equipment
(8,645
)
(14,918
)
(30,725
)
(39,254
)
Free cash flow
$
48,913
$
43,476
$
172,228
$
213,279
The following is a reconciliation of reported income from
operations, net income, and net income per diluted share to
adjusted income from operations, net income, and net income per
diluted share for the three and twelve months ended December 31,
2023 and 2022 (in thousands, except net income per diluted
share):
Three Months Ended December
31, 2023
Three Months Ended December
31, 2022
Continuing Operations
Income From Operations
Net Income1
Net Income Per Diluted
Share1
Income From Operations
Net Income2
Net Income Per Diluted
Share2
As Reported
$
3,000
$
(14,721
)
$
(0.58
)
$
56,330
$
39,009
$
1.45
Due diligence, integration and transaction
costs
29,619
20,786
0.81
534
383
0.01
Interest expense
—
14,862
0.58
—
—
—
Vehicle liability reserve
—
—
—
1,500
1,077
0.04
As Adjusted
$
32,619
$
20,927
$
0.81
$
58,364
$
40,469
$
1.51
1 Net income and net income per diluted
share amounts are based on the after-tax effect of each item. The
income tax effect is calculated by applying the effective tax rate
to the pre-tax amount. The total tax effect of the above item is
$15,149.
2 Net income and net income per diluted
share amounts are based on the after-tax effect of each item. The
income tax effect is calculated by applying the effective tax rate
to the pre-tax amount. The total tax effect of the above item is
$574.
Twelve Months Ended December
31, 2023
Twelve Months Ended December
31, 2022
Continuing Operations
Income From Operations
Net Income1
Net Income Per Diluted
Share1
Income From Operations
Net Income2
Net Income Per Diluted
Share2
As Reported
$
88,210
$
42,803
$
1.64
$
247,591
$
179,414
$
6.63
Due diligence, integration and transaction
costs
57,490
43,447
1.67
534
396
0.01
Interest expense
—
16,005
0.62
—
—
—
Vehicle liability reserve
—
—
—
1,500
1,112
0.04
Change in the fair value of the earn-out
liability
—
—
—
(294
)
(218
)
(0.01
)
As Adjusted
$
145,700
$
102,255
$
3.92
$
249,331
$
180,704
$
6.67
1 Net income and net income per diluted
share amounts are based on the after-tax effect of each item. The
income tax effect is calculated by applying the effective tax rate
to the pre-tax amount. The total tax effect of the above item is
$19,217.
2 Net income and net income per diluted
share amounts are based on the after-tax effect of each item. The
income tax effect is calculated by applying the effective tax rate
to the pre-tax amount. The total tax effect of the above item is
$451.
Note Regarding Forward-Looking Statements
This press release contains “orward-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:
“nticipate,”“ntend,”“lan,”“oal,”“eek,”“elieve,”“roject,”“stimate,”“xpect,”“trategy,”“uture,”“ikely,”“ay,”“hould,”“ill”and
similar references to future periods. Forward-looking statements
included in this press release relate to expectations regarding
customer demand for the Company’ services as well as the
performance of the Company’ LTL services; the Company's ongoing
commitment to provide excellent service to its customers; ability
to achieve the intended benefits of the acquisition of Omni
Logistics, including any revenue and cost synergies; expectations
regarding the Company's ability to execute on its plan to integrate
Omni Logistics in order to generate long-term value for
shareholders; expectations regarding the Company's ability to grow
its customer base, including the expected volumes from freight
forwarder customers; the future expected use of earnings guidance;
expectations regarding the Company's revenue growth strategies,
including with respect to capital allocation and leverage; and the
future declaration of dividends.
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, 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
noncore 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, 2022, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228837823/en/
Forward Air Corporation Justin Moss, 404-362-8933
jmoss@forwardair.com
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