Forward Air Ends Eventful Q1 With Positive Revenue Growth
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Forward Air Corp. ended an eventful first quarter with positive revenue growth but a decline in total earnings, the company reported May 8.
The Greeneville, Tenn.-based ground transportation and logistics services provider posted a net loss of $88.8 million, or negative $2.35 a diluted share, for the three months ending March 31. That compared with a gain of $33.9 million, $1.27, during the same time the previous year. Total revenue increased by 51.5% to $541.8 million from $357.7 million.
Forward Air during Q1 announced the completion of its sometimes-contentious acquisition of Omni Logistics. The long-pending deal was marred by a legal battle over financial terms amid investor pushback, but the two sides eventually came to an agreement.
Forward Air ranks No. 27 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 1 on the air/expedited carriers sector list. It ranks No. 31 on the TT Top 100 list of the largest logistics companies.
In April, the company announced a leadership change, with Shawn Stewart taking the role of CEO after Tom Schmitt exited in the wake of the Omni deal.
“I couldn’t be more excited to join Forward at this critical juncture,” Stewart said during a May 7 call with investors. “The addition of Omni paves the way for the company to become a market leader in global supply chain as we leverage the new capabilities while enhancing our best-in-class expedited LTL and other ground services.”
He also stressed that he sees better days ahead for the company.
“Given that I’ve been here less than two weeks, I’m not going to speak too much, except to say that these results are not indicative of what you will see from us the rest of the year,” Stewart said. “We are headed up and onward from this day.”
Stewart did, however, offer his viewpoint of “the context of the company’s Q1 performance, which I think is important to keep in mind.” Specifically, he said Q1 was negatively impacted by tough headwinds created by the persistently weak freight environment and the challenging circumstances surrounding the Omni deal.
“I think it’s really unrealistic to think that the ups and downs of the months leading to closing aren’t reflected in our Q1 performance,” he said. “Thankfully, that distraction is behind us now. As I mentioned, it is premature for me to start talking about Forward’s numbers.” Stewart also commended interim CEO Michael Hance with integrating the two companies and capturing synergies once the deal was able to come through.
Stewart stressed that he believes the company will see improvements in the quarters ahead and committed to enhancing investor communications to ensure the company is being clear, transparent and comprehensive. He told investors that they should expect to see steady improvement and information flow over the next couple of quarters, but they’re not ready to go into specifics.
“I need a little bit more time before we’re ready to give you targets,” Stewart said, “but I can tell you that in my first days with the team, we are focused on accelerating synergy capture and identifying opportunities to eliminate significant costs from our structure. We’re going to aggressively and urgently address our profitability issues. I fully expect us to be a category leader in our space with corresponding financial results.”
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During Q1, Forward Air saw its Expedited Freight segment revenue increase 1.4% to $273.3 million compared with $269.6 million during the same time last year. Total shipments increased 1.4% to 828,000 from 817,000. Revenue per shipment increased 0.9% to $259.14 from $256.89. Income from continuing operations decreased 34.3% to $19.5 million from $29.7 million in the prior-year quarter. The segment includes network and truckload operations. Network operations revenue within the segment increased 4.2% to $214.5 million from $205.9 million, while truckload operations revenue decreased 11.2% to $37.1 million from $41.7 million.
Intermodal segment revenue decreased 36.2% to $56.3 million from $88.2 million last year. Drayage shipments decreased 13.5% to 62,659 from 72,465 a year ago. Drayage revenue per shipment decreased 27.6% to $822 from $1,136. Income from continuing operations decreased 68% to $3.59 million from $11.2 million.
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