Forward Air Reports 138% Earnings Drop for Q4
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Forward Air Corp. experienced a 138% earnings drop year-over-year during the fourth quarter of 2023, the company reported Feb. 28.
The Greeneville, Tenn.-based ground transportation and logistics services provider posted a net loss of $14.7 million, or negative 58 cents a diluted share, for the three months ending Dec. 31. That compared with a net income of $39 million, $1.45, during the same time the previous year. The total operating revenue decreased by 16% to $338.4 million from $403 million.
“Before we jump into the quarter, I just wanted to take a few moments to acknowledge the recent changes at Forward and introduce myself,” interim CEO Michael Hance said during a call with investors. “Forward has been navigating a period of turbulence in the freight market and within our company. The past few months have been bumpy, but I am confident that is behind us, and we are all united and energized by the opportunities ahead.”
Forward Air was originally planning on releasing the Q4 report Feb. 21. But the company ended up pushing the release back a week, citing recent leadership changes and the acquisition of Omni Logistics.
Tom Schmitt, the former chairman, president and CEO, departed the company Feb. 7.
Hance assumed the position of interim CEO, in addition to his regular roles as chief legal officer and secretary.
Chris Ruble was appointed as president and chief operating officer. The company also announced board member changes.
“Now, I’ve been with this company for 18 years in a number of different roles, in legal, in HR, and have a strong understanding of the transportation industry and Forward’s business,” Hance said.
Hance noted that execution of a revenue growth strategy during the quarter led to positive volume trends and improved freight quality metrics despite the softer freight conditions. That led to momentum in the less-than-truckload line of business with pounds per day growth of over 6% year-over-year. He also pointed to improvements in freight quality with weight per shipment increasing over 11%.
“Taking on this role is personal for me,” Hance said. “It is a position of trust. I care deeply about this company’s success and the great people who come to work every day and serve our customers. I know that our people, our customers and our shareholders are counting on us. My mandate during this period as interim CEO is to make sure we have the appropriate leadership to move forward while our board’s dedicated search committee promptly identifies a top-quality CEO.”
Forward Air previously announced that it had completed its acquisition of Omni Logistics. The combined companies aim to create a differentiated service offering an expanded geographic footprint. It promises to offer high-value freight to its expedited LTL network. Hance also noted that it positions the company to accelerate its Grow Forward strategy.
“One of my top priorities is to ensure that we successfully integrate Omni and capitalize on the many opportunities that it will create for our customers, employees and shareholders,” Hance said. “We are taking a thoughtful approach to executing our integration plan, with a strong focus on combining our employees and services seamlessly, and without disruption. As we move through integration, customer service and retention remain top priorities.”
For the full year, Forward Air reported lower profits. Net income was $42.8 million, $1.64, on revenue of $1.37 billion, compared with net income of $179.4 million, $6.63 a share, on revenue of $1.68 billion in 2022.
The expedited freight segment reported that Q4 revenue decreased 5.3% to $279.1 million from $294.6 million during the same time the previous year. Income from operations fell 31.1% to $26.8 million from $38.8 million the prior year. Total shipments for the segment decreased 4.4% year-over-year to 846 from 885. But revenue per shipment was able to achieve a 1.2% increase to $256.90 from $253.83. The segment includes network and truckload operations.
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Network operations revenue increased 2% to $217.3 million from $221.8 million.
Truckload operations revenue decreased 23.4% to $38.5 million from $50.3 million.
The intermodal segment experienced a 45.2% decline in revenue to $59.4 million from $108.5 million. Income from operations fell 63.5% to $5.07 million from $13.9 million. The segment saw drayage shipments decline by 11.7% year-over-year to 65,776 from 74,532. Drayage revenue per shipment also fell 40% to $821 from $1,369.
Forward 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. Omni ranks No. 38 on the TT Top 100 logistics companies list.
