Forward Air Corporation Reports Third Quarter 2023 Results

Rhea-AI Summary

Forward Air Corporation (NASDAQ:FWRD) reported financial results for Q3 2023, with positive volume trends and improved freight quality metrics. LTL volumes and weight per shipment increased, and the operating ratio for the LTL line of business improved. The company is growing with domestic freight forwarders and direct shippers, and their door-to-door revenue increased. However, intermodal and truckload brokerage services faced weak demand, resulting in a decline in revenues. For Q4 2023, the company expects a decline in revenue and adjusted net income compared to the previous year.

Positive

• Positive volume trends and improved freight quality metrics
• Growth with domestic freight forwarders and direct shippers
• Increase in LTL volumes and weight per shipment
• Improvement in operating ratio for LTL line of business
• Growth in door-to-door revenue

Negative

• Weak demand for intermodal and truckload brokerage services
• 19% decline in revenues on a consolidated basis
• Decline in net income and adjusted net income per diluted share
• Expected decline in revenue and adjusted net income for Q4 2023

Strong momentum in LTL volumes

Growth with LTL freight forwarders and direct shippers

Continued weak demand for intermodal and truckload brokerage services

GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ:FWRD) (the “Company”, “we”, “our”, or “us”) today reported financial results for the three and nine months ended September 30, 2023 as presented in the tables below.

Tom Schmitt, Chairman, President and CEO, commenting on third quarter results said, “Precision execution of our revenue growth strategies led to positive volume trends and improved freight quality metrics. In the first weeks of the fourth quarter, we have seen continued momentum with +6% pounds per day growth over the same period in the prior year. In addition to the growth of our LTL volumes, our third quarter of 2023 weight per shipment increased +8% over the same period in the prior year. After a sluggish start to the third quarter, our LTL line of business achieved an operating ratio of approximately 85.5% for September 2023, a sequential improvement of 80 basis points from June 2023.”

Mr. Schmitt continued, “We are growing with both our domestic freight forwarder and direct shipper customers. Subsequent to the announcement of our proposed acquisition of Omni Logistics on August 10, our average daily volumes with domestic freight forwarders increased by more than 14%. In addition, we grew our LTL direct shipper customer count by more than 33% from third quarter of 2022 to third quarter of 2023 to over 240 direct shipper customers. We are winning market share with the direct shipper customer who does not use a domestic freight forwarder. A key focus area has been the expansion of our door-to-door solution. We built a commercial team dedicated to working closely with customers on selecting, pricing and handling freight, and we added new terminals in 2023 that were strategically located in markets closer to current and future customers. In the third quarter of 2023, our door-to-door revenue increased 12% over the same period in the prior year. We believe our service, being the best in the LTL industry in damage-free, intact, on-time shipments, continues to make us the most compelling choice for customers with high value freight needs.”

In closing, Mr. Schmitt said, “Over the next few weeks, we are excited to share the next phase of the Grow Forward revenue strategy that includes a further enhanced LTL focus. Also, to ensure corporate clarity, we are accelerating our strategic portfolio review.”

Regarding the third quarter results, Rebecca J. Garbrick, CFO, said, “Market demand continues to be challenged for our intermodal and truckload brokerage services as both lines of business are navigating an extended weak freight environment. Softer demand for our intermodal and truckload brokerage services combined with a decrease in the price of diesel over the same period in the prior year resulted in a 19% decline in revenues on a consolidated basis, and reported net income per diluted share of $0.36 and adjusted net income per diluted share of $0.99.”

Ms. Garbrick continued, regarding fourth quarter of 2023 guidance, “We expect our year-over-year revenue to decline 7% to 17% and adjusted net income per diluted share in the range of $0.98 to $1.02, compared to reported net income per diluted share of $1.60 and adjusted net income per diluted share of $1.65 in the fourth quarter of 2022.”

		Three Months Ended
(in thousands, except per share data)		September 30, 2023				September 30, 2022				Change				Percent Change
Operating revenue		$	413,447			$	510,023			$	(96,576	)		(18.9	)%
Income from operations		$	15,493			$	71,665			$	(56,172	)		(78.4	)%
Operating margin			3.7	%			14.1	%		(1,040) bps
Net income		$	9,288			$	52,133			$	(42,845	)		(82.2	)%
Net income per diluted share		$	0.36			$	1.93			$	(1.57	)		(81.3	)%
Cash provided by operating activities		$	29,865			$	83,994			$	(54,129	)		(64.4	)%
Non-GAAP Financial Measures: 1
Adjusted income from operations		$	37,864			$	71,665			$	(33,801	)		(47.2	)%
Adjusted net income		$	25,462			$	52,133			$	(26,671	)		(51.2	)%
Adjusted net income per diluted share		$	0.99			$	1.93			$	(0.94	)		(48.9	)%
EBITDA		$	30,999			$	83,934			$	(52,935	)		(63.1	)%
Free cash flow		$	24,126			$	77,922			$	(53,796	)		(69.0	)%
1 Reconciliation of these non-GAAP financial measures are provided below the financial tables.
		Nine Months Ended
(in thousands, except per share data)		September 30, 2023				September 30, 2022				Change				Percent Change
Operating revenue		$	1,242,695			$	1,492,203			$	(249,508	)		(16.7	)%
Income from operations		$	96,213			$	204,561			$	(108,348	)		(53.0	)%
Operating margin			7.7	%			13.7	%		(600) bps
Net income		$	65,607			$	150,249			$	(84,642	)		(56.3	)%
Net income per diluted share		$	2.50			$	5.53			$	(3.03	)		(54.8	)%
Cash provided by operating activities		$	159,431			$	196,814			$	(37,383	)		(19.0	)%
Non-GAAP Financial Measures: 1
Adjusted income from operations		$	124,084			$	204,267			$	(80,183	)		(39.3	)%
Adjusted net income		$	86,232			$	150,029			$	(63,797	)		(42.5	)%
Adjusted net income per diluted share		$	3.29			$	5.53			$	(2.24	)		(40.5	)%
EBITDA		$	139,867			$	239,555			$	(99,688	)		(41.6	)%
Free cash flow		$	139,288			$	172,836			$	(33,548	)		(19.4	)%
1 Reconciliation of these non-GAAP financial measures are provided below the financial tables.

On October 24, 2023, our Board of Directors declared a quarterly cash dividend of $0.24 per share of common stock. The dividend is payable to shareholders of record at the close of business on November 22, 2023 and is expected to be paid on December 7, 2023. This quarterly dividend is made pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.96 for the full year 2023, payable in quarterly increments of $0.24 per share of common stock. The actual declaration of future cash dividends, and the establishment of record and payment dates, is subject to final determination by the Board of Directors each quarter after its review of the Company’s financial performance and position.

Review of Financial Results

Forward Air will hold a conference call to discuss third quarter 2023 results on Tuesday, October 31, 2023 at 9:00 a.m. EDT. 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 (844) 767-5679, Access Code: 7274129.

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 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 (“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 final mile services, including delivery of heavy-bulky freight, 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. 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								Nine Months Ended
	September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Operating revenue:
Expedited Freight	$	351,346			$	395,635			$	1,028,276			$	1,181,083
Intermodal		62,183				114,421				214,603				311,272
Eliminations and other operations		(82	)			(33	)			(184	)			(152	)
Operating revenues		413,447				510,023				1,242,695				1,492,203
Operating expenses:
Purchased transportation		190,766				229,326				557,626				693,648
Salaries, wages and employee benefits		88,159				90,755				254,365				263,194
Operating leases		22,662				24,965				76,094				71,097
Depreciation and amortization		15,506				12,269				43,654				34,994
Insurance and claims		13,626				12,093				40,768				37,257
Fuel expense		5,917				6,772				16,975				20,951
Other operating expenses		61,318				62,178				157,000				166,501
Total operating expenses		397,954				438,358				1,146,482				1,287,642
Income (loss) from operations:
Expedited Freight		36,351				56,304				100,298				167,091
Intermodal		4,744				16,610				20,259				43,005
Other Operations		(25,602	)			(1,249	)			(24,344	)			(5,535	)
Income from operations		15,493				71,665				96,213				204,561
Other expense:
Interest expense, net		(2,655	)			(1,544	)			(7,595	)			(3,521	)
Total other expense		(2,655	)			(1,544	)			(7,595	)			(3,521	)
Income before income taxes		12,838				70,121				88,618				201,040
Income tax expense		3,550				17,988				23,011				50,791
Net income and comprehensive income	$	9,288			$	52,133			$	65,607			$	150,249
Net income per share:
Basic	$	0.36			$	1.94			$	2.51			$	5.56
Diluted	$	0.36			$	1.93			$	2.50			$	5.53
Dividends per share:	$	0.24			$	0.24			$	0.72			$	0.72

Expedited Freight Segment Information
(In thousands)
(Unaudited)
	Three Months Ended
	September 30, 2023			Percent of Revenue			September 30, 2022			Percent of Revenue			Change				Percent Change
Operating revenue:
Network 1	$	216,977		61.8	%		$	240,482		60.8	%		$	(23,505	)		(9.8	)%
Truckload		38,800		11.0				55,607		14.1				(16,807	)		(30.2	)
Final Mile		72,471		20.6				76,822		19.4				(4,351	)		(5.7	)
Other		23,098		6.6				22,724		5.7				374			1.6
Total operating revenue		351,346		100.0				395,635		100.0				(44,289	)		(11.2	)
Operating expenses:
Purchased transportation		171,910		48.9				200,783		50.7				(28,873	)		(14.4	)
Salaries, wages and employee benefits		69,468		19.8				71,543		18.1				(2,075	)		(2.9	)
Operating leases		17,518		5.0				15,819		4.0				1,699			10.7
Depreciation and amortization		10,319		2.9				8,140		2.1				2,179			26.8
Insurance and claims		10,190		2.9				9,196		2.3				994			10.8
Fuel expense		3,026		0.9				2,873		0.7				153			5.3
Other operating expenses		32,564		9.3				30,977		7.8				1,587			5.1
Total operating expenses		314,995		89.7				339,331		85.8				(24,336	)		(7.2	)
Income from operations	$	36,351		10.3	%		$	56,304		14.2	%		$	(19,953	)		(35.4	)%
1Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.

Expedited Freight Operating Statistics
	Three Months Ended
	September 30, 2023			September 30, 2022			Percent Change
Business days		63			64		(1.6	)%
Tonnage 1,2
Total pounds		685,756			698,004		(1.8	)
Pounds per day		10,885			10,906		(0.2	)
Shipments 1,2
Total shipments		835			916		(8.8	)
Shipments per day		13.3			14.3		(7.0	)
Weight per shipment		821			762		7.7
Revenue per hundredweight 3	$	31.66		$	34.70		(8.8	)
Revenue per hundredweight, ex fuel 3	$	24.20		$	26.05		(7.1	)
Revenue per shipment 3	$	259.94		$	264.30		(1.6	)
Revenue per shipment, ex fuel 3	$	198.71		$	198.39		0.2
1 In thousands
2 Excludes accessorial, Truckload and Final Mile products
3 Includes intercompany revenue between the Network and Truckload revenue streams

Intermodal Segment Information
(In thousands)
(Unaudited)
	Three Months Ended
	September 30, 2023			Percent of Revenue			September 30, 2022			Percent of Revenue			Change				Percent Change
Operating revenue	$	62,183		100.0	%		$	114,421		100.0	%		$	(52,238	)		(45.7	)%
Operating expenses:
Purchased transportation		18,945		30.5				28,610		25.0				(9,665	)		(33.8	)
Salaries, wages and employee benefits		16,118		25.9				17,945		15.7				(1,827	)		(10.2	)
Operating leases		5,144		8.3				9,146		8.0				(4,002	)		(43.8	)
Depreciation and amortization		5,187		8.3				4,129		3.6				1,058			25.6
Insurance and claims		2,758		4.4				2,241		2.0				517			23.1
Fuel expense		2,892		4.7				3,899		3.4				(1,007	)		(25.8	)
Other operating expenses		6,395		10.3				31,841		27.8				(25,446	)		(79.9	)
Total operating expenses		57,439		92.4				97,811		85.5				(40,372	)		(41.3	)
Income from operations	$	4,744		7.6	%		$	16,610		14.5	%		$	(11,866	)		(71.4	)%

Intermodal Operating Statistics
	Three Months Ended
	September 30, 2023			September 30, 2022			Percent Change
Drayage shipments		68,576			89,236		(23.2	)%
Drayage revenue per shipment	$	823		$	1,203		(31.6	)%

Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
	September 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	18,843		$	45,822
Accounts receivable, net		191,758			221,028
Other current assets		27,129			37,465
Total current assets		237,730			304,315
Property and equipment, net		258,248			249,080
Operating lease right-of-use assets		134,726			141,865
Goodwill		356,763			306,184
Other acquired intangibles, net		146,710			154,801
Other assets		56,404			51,831
Total assets	$	1,190,581		$	1,208,076
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	45,702		$	54,601
Accrued expenses		56,552			54,291
Other current liabilities		21,619			3,956
Current portion of debt and finance lease obligations		15,053			9,444
Current portion of operating lease liabilities		51,515			47,106
Total current liabilities		190,441			169,398
Finance lease obligations, less current portion		23,387			15,844
Long-term debt, less current portion and debt issuance costs		118,857			106,588
Operating lease liabilities, less current portion		87,938			98,865
Other long-term liabilities		50,966			59,044
Deferred income taxes		53,292			51,093
Shareholders’ equity:
Preferred stock		—			—
Common stock		257			265
Additional paid-in capital		280,640			270,855
Retained earnings		384,803			436,124
Total shareholders’ equity		665,700			707,244
Total liabilities and shareholders’ equity	$	1,190,581		$	1,208,076

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Three Months Ended
	September 30, 2023				September 30, 2022
Operating activities:
Net income from operations	$	9,288			$	52,133
Adjustments to reconcile net income of operations to net cash provided by operating activities of operations
Depreciation and amortization		15,506				12,269
Share-based compensation expense		3,043				2,676
Provision for revenue adjustments		2,782				4,368
Deferred income tax expense		17				—
Other		1,396				(966	)
Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:
Accounts receivable		(19,425	)			(6,421	)
Other receivables		—				1,004
Other current and noncurrent assets		(6,916	)			2,825
Accounts payable and accrued expenses		24,174				16,106
Net cash provided by operating activities		29,865				83,994
Investing activities:
Proceeds from sale of property and equipment		104				656
Purchases of property and equipment		(5,843	)			(6,728	)
Net cash used in investing activities		(5,739	)			(6,072	)
Financing activities:
Repayments of finance lease obligations		(2,949	)			(1,626	)
Payments on credit facility		(375	)			(40,375	)
Payments of dividends to shareholders		(6,198	)			(6,467	)
Repurchases and retirement of common stock		(14,019	)			(29,994	)
Payment of minimum tax withholdings on share-based awards		(23	)			—
Net cash used in financing activities		(23,564	)			(78,462	)
Net increase (decrease) in cash and cash equivalents		562				(540	)
Cash and cash equivalents at beginning of period		18,281				47,386
Cash and cash equivalents at end of period	$	18,843			$	46,846

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Nine Months Ended
	September 30, 2023				September 30, 2022
Operating activities:
Net income from operations	$	65,607			$	150,249
Adjustments to reconcile net income of operations to net cash provided by operating activities of operations
Depreciation and amortization		43,654				34,994
Change in fair value of earn-out liability		—				(294	)
Share-based compensation expense		9,352				8,743
Provision for revenue adjustments		8,311				7,302
Deferred income tax expense		2,199				1,962
Other		964				417
Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:
Accounts receivable		18,874				(43,172	)
Other receivables		—				8,097
Other current and noncurrent assets		4,207				6,743
Accounts payable and accrued expenses		6,263				21,773
Net cash provided by operating activities		159,431				196,814
Investing activities:
Proceeds from sale of property and equipment		3,275				1,423
Purchases of property and equipment		(23,418	)			(25,401	)
Purchase of a business, net of cash acquired		(56,703	)			(40,433	)
Net cash used in investing activities		(76,846	)			(64,411	)
Financing activities:
Repayments of finance lease obligations		(6,936	)			(4,209	)
Proceeds from credit facility		45,000				—
Payments on credit facility		(31,125	)			(48,625	)
Payment of earn-out liability		—				(91	)
Proceeds from issuance of common stock upon stock option exercises		—				206
Payments of dividends to shareholders		(18,798	)			(19,461	)
Repurchases and retirement of common stock		(93,811	)			(47,774	)
Proceeds from common stock issued under employee stock purchase plan		421				374
Payment of minimum tax withholdings on share-based awards		(4,315	)			(3,293	)
Net cash used in financing activities		(109,564	)			(122,873	)
Net (decrease) increase in cash and cash equivalents		(26,979	)			9,530
Cash and cash equivalents at beginning of period		45,822				37,316
Cash and cash equivalents at end of period	$	18,843			$	46,846

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 nine months ended September 30, 2023 and 2022, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), free cash flow, adjusted income from operations, adjusted net income, and adjusted net income per diluted share.

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 income from operations, net income and net income per 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.

Due to the forward-looking nature of the fourth quarter 2023 guidance for adjusted net income per diluted share, the Company is unable to reconcile this non-GAAP measure to the most directly comparable GAAP measure because the comparable GAAP measure is not reasonably accessible or reliable due to the inherent difficulty in forecasting and quantifying measures that would be required for such reconciliation.

The following is a reconciliation of net income to EBITDA for the three and nine months ended September 30, 2023 and 2022 (in thousands):

		Three Months Ended						Nine Months Ended
		September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Net income		$	9,288		$	52,133		$	65,607		$	150,249
Interest expense			2,655			1,544			7,595			3,521
Income tax expense			3,550			17,988			23,011			50,791
Depreciation and amortization			15,506			12,269			43,654			34,994
EBITDA		$	30,999		$	83,934		$	139,867		$	239,555

The following is a reconciliation of net cash provided by operating activities to free cash flow for the three and nine months ended September 30, 2023 and 2022 (in thousands):

		Three Months Ended								Nine Months Ended
		September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Net cash provided by operating activities		$	29,865			$	83,994			$	159,431			$	196,814
Proceeds from sale of property and equipment			104				656				3,275				1,423
Purchases of property and equipment			(5,843	)			(6,728	)			(23,418	)			(25,401	)
Free cash flow		$	24,126			$	77,922			$	139,288			$	172,836

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 nine months ended September 30, 2023 and 2022 (in thousands, except net income per diluted share):

		Three Months Ended September 30, 2023									Three Months Ended September 30, 2022
		Income From Operations			Net Income1			Net Income Per Diluted Share1			Income From Operations				Net Income				Net Income Per Diluted Share
As Reported		$	15,493		$	9,288		$	0.36		$	71,665			$	52,133			$	1.93
Due diligence and transaction costs			22,371			16,174			0.63			—				—				—
As Adjusted		$	37,864		$	25,462		$	0.99		$	71,665			$	52,133			$	1.93
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 $6,197.
		Nine Months Ended September 30, 2023									Nine Months Ended September 30, 2022
		Income From Operations			Net Income1			Net Income Per Diluted Share1			Income From Operations				Net Income2				Net Income Per Diluted Share2
As Reported		$	96,213		$	65,607		$	2.50		$	204,561			$	150,249			$	5.53
Due diligence and transaction costs			27,871			20,625			0.79			—				—				—
Change in the fair value of the earn-out liability			—			—			—			(294	)			(220	)			(0.01	)
As Adjusted		$	124,084		$	86,232		$	3.29		$	204,267			$	150,029			$	5.53
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 $7,246.
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 ($74).

The following is a reconciliation of reported net income per diluted share to adjusted net income per diluted share for the three months ended December 31, 2022:

		Net Income Per Diluted Share1
Continuing Operations		Three Months Ended December 31, 2022
As reported		$	1.60
Vehicle liability reserve			0.04
Due diligence and integration costs			0.01
As adjusted		$	1.65
1 Net income per diluted share is after tax

The following information is provided to supplement this press release.

Actual		Three Months Ended September 30, 2023
Net income		$	9,288
Income allocated to participating securities			(57	)
Numerator for diluted net income per share - net income		$	9,231
Weighted-average common shares and common share equivalent outstanding - diluted			25,771
Diluted net income per share		$	0.36
Projected		Full year 2023
Projected tax rate			26.7	%
Projected purchases of property and equipment, net of proceeds from sale of property and equipment		$	32,000
Projected		December 31, 2023
Projected weighted-average common shares and common share equivalent outstanding - diluted			26,000

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 ability to grow its existing customer base, expectations of market share growth, expectations regarding the impact of the Company’s revenue growth strategies and its ongoing portfolio review, expectations regarding customer demand for the Company’s services as well as the performance of the Company’s LTL services, expectations regarding the Company's fourth quarter 2023 guidance, including with respect to revenue and net income per diluted share, the future declaration of dividends and, the quarterly and full year 2023 anticipated dividends per share, expectations regarding future debt and financing levels and expectations regarding the transactions involving Omni Logistics, including whether or not such transactions are consummated and, if consummated, whether such transactions meet expectations regarding timing, completion and the outcome thereof.

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 outcome and related impact of the proposed acquisition of Omni Logistics, continued weakening of the freight environment, future debt and financing levels, the outcome of the transactions involving Omni Logistics, including any legal proceedings related to such transactions, our ability to manage our growth and ability to grow, in part, through acquisitions, (including the acquisition involving Omni Logistics) while being able to successfully integrate such acquisitions, 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/20231030204752/en/

Forward Air Corporation

Brandon Hammer, 423-636-7173

bhammer@forwardair.com

Source: Forward Air Corporation

FAQ

What were the key highlights of Forward Air Corporation's Q3 2023 financial results?

The key highlights of Forward Air Corporation's Q3 2023 financial results include positive volume trends, improved freight quality metrics, growth with domestic freight forwarders and direct shippers, increase in LTL volumes and weight per shipment, and improvement in the operating ratio for the LTL line of business.

What were the challenges faced by Forward Air Corporation's intermodal and truckload brokerage services?

Forward Air Corporation's intermodal and truckload brokerage services faced weak demand, resulting in a decline in revenues.

What are the expected financial results for Forward Air Corporation in Q4 2023?

Forward Air Corporation expects a decline in year-over-year revenue of 7% to 17% and adjusted net income per diluted share in the range of $0.98 to $1.02 for Q4 2023.

What is Forward Air Corporation's cash dividend policy?

Forward Air Corporation's cash dividend policy approved by the Board of Directors anticipates a total annual dividend of $0.96 for the full year 2023, payable in quarterly increments of $0.24 per share of common stock.