Forward Air Reports $88.8M Net Loss, Shares Plummet 30% Ahead of Earnings Call

Following a disappointing first-quarter report released five hours after the previous day’s market closure, shares of transportation company Forward Air plummeted by 30% prior to market opening. The company reported a net loss of $88.8 million, equivalent to $2.35 per share, excluding expenses related to the acquisition and integration of Omni Logistics, as well as severance fees associated with leadership changes. This figure contrasted with estimated losses between 15 and 11 cents per share recorded in the previous year’s comparable period. The legacy operations division also experienced a decrease in operating results, with a 7.1% operating margin in the recent quarter, representing a 390 basis point reduction year-over-year and a 250 basis point deterioration compared to the previous quarter. In the first quarter, Omni Logistics, a freight forwarder offering end-to-end supply chain services, contributed $542 million in revenue, reflecting a 52% increase year-over-year. However, this subsidiary incurred an operating loss of $28.6 million in the initial quarter, whereas in the whole three-month period, it managed $307 million in revenue and an adjusted earnings before interest, taxes, depreciation and amortization loss of $9 million. Forward’s management stated that they would provide a full-year outlook during their upcoming second-quarter conference call. The intermodal sector witnessed a 36% fall in revenue to $56 million due to a 14% decrease in shipments and a 28% dip in revenue per shipment. The division experienced a 6.4% operating margin for the most recent quarter, which was half the margin enjoyed in the preceding year’s comparable quarter. The company reported adjusted EBITDA of $29.4 million in the recent quarter, indicating a 51% year-on-year fall, and forecasted sequential gains in EBITDA until the realization of synergies by the end of 2025. Forward currently holds $1.77 billion in debt, $172 million in cash, and $340 million in unused lines of credit. The net debt-to-adjusted EBITDA ratio was 5.5 times based on the measurement required by lending agreements. During the quarter, the business repaid $80 million in debt while temporarily suspending dividends and share buybacks. Forward intends to sell non-core assets, just like it did with its final-mile segment at the end of last year. The firm will host a webinar at 10:00 EDT on Thursday morning to discuss the prior quarter’s outcomes with financial analysts. More FreightWaves articles by Todd Maiden can be found here.