• Revenue: $633 million for the fourth quarter, an 87% increase compared to the prior year, largely driven by the Omni transaction.
• Consolidated EBITDA: $69 million for the fourth quarter, with an 11% margin; $308 million for the full year 2024, near the top end of the guidance range.
• Expedited Freight Revenue: Decreased 4.7% to $266 million from the previous year's comparable quarter.
• Intermodal Segment Revenue: $60 million, flat compared to the fourth quarter of 2023.
• Omni Logistics Revenue: $326 million for the fourth quarter, not included in the previous year's comparable quarter.
• Income from Continuing Operations: $76 million for the fourth quarter, including a $79 million goodwill impairment adjustment.
• Cash Flow from Operations: $31 million used in the fourth quarter; $20 million net cash provided by operating activities for the second half of 2024.
• Liquidity: Ended the fourth quarter with $382 million, including $105 million in cash and $277 million in availability under the revolver.

• Warning! GuruFocus has detected 5 Warning Signs with FWRD.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Forward Air Corp (NASDAQ:FWRD) reported consolidated EBITDA of $308 million for 2024, near the top of their guidance range.
• The company achieved $75 million in integration synergies and cost savings, with expectations to exceed this target.
• Forward Air Corp (NASDAQ:FWRD) successfully integrated the networks of Forward Air and Omni, enhancing their global freight forwarding capabilities.
• The company made significant leadership additions, including a new Chief Financial Officer and Chief Commercial Officer, to drive future growth.
• Forward Air Corp (NASDAQ:FWRD) demonstrated strong cash flow management, turning cash flow positive in the second half of 2024.

Negative Points

• The Expedited Freight segment underperformed, with a decline in income from operations due to decreased volumes and a less profitable pricing strategy.
• The company faced a goodwill impairment adjustment of $79 million related to the Omni Logistics segment.
• There was a 4.7% decrease in revenue for the Expedited Freight segment compared to the previous year.
• Forward Air Corp (NASDAQ:FWRD) experienced a 3.5% sequential decrease in consolidated revenue in the fourth quarter.
• The company is shedding some unprofitable volume, which may impact short-term revenue growth.

Q & A Highlights

Q: How is Forward Air preparing for potential tariff and trade disruptions, particularly at Omni? A: Shawn Stewart, CEO, explained that while it's challenging to predict the exact impact of tariffs on freight volumes and revenue, Forward Air is well-positioned due to its diverse presence in Asian countries beyond China. The company doesn't foresee a major impact from tariffs, especially concerning commodities like fuel and food, which aren't central to their business network.

Q: Are there any concerns about competitors establishing A to A networks, and how is Forward Air planning to compete? A: Shawn Stewart, CEO, acknowledged the presence of competitors but emphasized that Forward Air's focus is on differentiating through technology and unmatched service. The company aims to maintain its competitive edge by offering best-in-class solutions and not just competing on price.

Q: Can Forward Air be cash flow positive this quarter without the bond payment, and what are the cash flow seasonality expectations? A: Jamie Pierson, CFO, noted that while he couldn't provide specific guidance, the company has about $170 million in annual interest payments. He emphasized that once transaction expenses and other legacy costs are managed, Forward Air's asset-light business model should allow it to be free cash flow positive, as demonstrated in the third quarter.

Q: What are the drivers of the Omni business, and how did it perform in the quarter? A: Jamie Pierson, CFO, highlighted that Omni benefited from increased air and ocean volumes, although offset by a softer pricing environment. The segment also saw strong performance in warehouse and value-added services, particularly in the tech sector. The integration of networks has improved Omni's performance significantly.

Q: How is Forward Air addressing the decline in Expedited Freight operating margins, and what are the expectations for future margins? A: Shawn Stewart, CEO, explained that the decline was due to a shift from density-based to class-based tariffs, which were not profitable. Corrective pricing actions have been implemented, and the company expects to see improvements in margins by the second quarter of 2025. Jamie Pierson, CFO, added that Forward Air's network and service levels are superior to peers, suggesting potential for margin recovery.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.