Forward Air Posts Q2 Loss, But Revenue Soars on Acquisition

The net loss was primarily due to a one-time goodwill impairment charge related to the Omni acquisition. (Forward Air)

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Forward Air Corp. experienced a spike in revenue, but a collapse in earnings, with much of the second-quarter results being driven by its acquisition of Omni Logistics, the company reported Aug. 7.

The Greeneville, Tenn.-based ground transportation and logistics services provider posted a net loss of $966.5 million, or minus $23.29 a diluted share, for the three months ending June 30. That compared with a gain of $17.1 million, 65 cents, during the same time the previous year. Total operating revenue increased by 92.9% to $643.7 million from $333.6 million.

Despite the reported net loss, investors appeared to be responding positively to several factors. The net loss was primarily due to a one-time goodwill impairment charge related to the Omni acquisition. Excluding this non-cash charge, the company’s operational performance shows signs of improvement.

CEO Shawn Stewart highlighted positive momentum, noting an increase in Consolidated EBITDA from Q1 to Q2.

“I would like to start by reiterating my excitement about the opportunity that lies ahead of us,” Stewart said during a conference call with investors. “We are in the nascent stages of taking two good companies and making them great as a single, unified global logistics enterprise. We are building on their individual strengths.”

Forward had completed its acquisition of the freight forwarding company Jan. 25. Those operations are currently being integrated into the rest of the business, with the unit reporting $311.9 million during the quarter.

“The integration is progressing as planned and delivering the synergies and the cost savings as originally anticipated,” Stewart said. “The transaction closed a little over six months ago, and since that time, we have actioned certain initiatives. We expect these initiatives will reduce our operating expenses, as well as reduce our real estate footprint and employee head count.”

Stewart 

Stewart expects these actions will help improve the operating leverage to better position the company for when the freight market improves. He also noted that all vital activities related to this integration have been actioned, meaning that the company should be back at a full run rate on a savings basis by the end of Q1 2025.

“I want to discuss the undue concern over customer attrition,” Stewart said. “Did we lose some volume prior to and immediately after the transaction closed? Yes, we did. Very few, if any, companies in the world can go through a complex integration like the one we did and not experience some disruption.”

Forward Air ranks No. 41 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.

“We have spoken to many of these customers and clarified our continued commitment to them, which aligns with our strategy,” Stewart said. “We have seen some of those volumes already return. We believe the service we provide will be the ultimate driver of customer retention and growth, and everyone on this call, as well as our customers, are aware of the level of service this company has and continues to provide.

Stewart noted that the acquisition has already resulted in synergies, with it now being easier for customers to combine services like air cargo and the LTL network. He noted some recent customer wins have stemmed from the ability to offer contract logistics, warehousing, LTL and truckload services in combination.

“We do not believe that this would have been possible prior to the Omni acquisition,” Stewart said. “Thirdly, going forward, we will be transforming from two separate companies to a product-focused and operations-driven company. We will be going to market on an incredibly focused vertical basis in ground, air, ocean, contract logistics and customs brokerage services.

Expedited Freight segment revenue increased 8.1% to $291.3 million from $269.4 million last year. Income from operations declined 18.9% to $21.9 million from $27.1 million. Total shipments moved by the segment increased 1.4% to 870,000 from 842,000. Revenue per shipment grew by 4.1% to $256.80 from $246.59. It included intercompany revenue between the network and truckload revenue streams. The segment includes network and truckload operations.

• Network revenue increased 8.5% to $223.3 million from $205.8 million.
• Truckload revenue increased 10.5% to $44.7 million from $40.4 million.
• Intermodal segment revenue decreased 7.7% to $59.3 million from $64.3 million.
• Income from operations increased 23.3% to $5.32 million from $4.31.
• Drayage shipments declined 4.8% to 64,877 from 68,180.
• Drayage revenue per shipment decreased 3.2% to $826,000 from $853,000.