Forward Air Earnings Improve Despite Revenue Decline in Q2
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grew earnings, despite a decrease in revenue, amid ongoing efforts to improve second-quarter operations and finances, the company reported Aug. 11.
The Greeneville, Tenn.-based ground transportation and logistics services provider posted a net loss of $20.4 million, or negative 41 cents a diluted share, for the three months ending June 30. That compared with a net loss of $971.3 million, negative $23.47, during the same time the previous year. Total operating revenue decreased 3.9% to $618.8 million from $643.7 million.
“As our global presence grows, it’s clear that our focus on service, speed and reliability is making a lasting impact,” Forward CEO Shawn Stewart said during a call with investors. “While managing through the challenges of the current freight recession, we plan to continue demonstrating our unwavering commitment to our customers by strengthening relationships and consistently delivering value-added services that matter. We believe this approach will benefit our customers, employees and investors over the long term.”
Forward highlighted in the quarterly report that consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 17.1% year over year to $73.8 million from $89 million. Stewart expressed confidence that the company is well-positioned to improve EBITDA and cash flow from operations once the freight environment normalizes.
“We had another solid operational quarter with consolidated EBITDA, which is calculated pursuant to our credit agreement, of $74 million, compared to $69 million in the first quarter of this year,” Stewart said. “Consolidated EBITDA in the second quarter of last year was $89 million. Going forward, the quarterly results will be more comparable. As the historical quarterly pro forma and synergy savings roll off, the quality of our earnings should also continue to improve.”
The prior-year net loss was primarily due to a one-time goodwill impairment charge related to the acquisition of Omni Logistics. The deal has faced pushback from some shareholders. Net loss from continuing operations decreased 97.9% to $20.4 million from $966.5 million last year. Omni segment revenue increased 5.3% to $328.3 million from $311.9 million last year. Income from continuing operations increased to $7.19 million from a loss of $1.11 billion.
“In Omni Logistics segment, we continue to build momentum,” Stewart said. “I am excited about the progress that we are seeing. On a year-over-year basis, we grew revenue $16 million to $328 million in the second quarter. Sequentially, from the first quarter to the second quarter of this year, reported EBITDA increased from $26 million to $30 million, and the margin improved by 110 basis points.”
Revenue by Segment
- Expedited Freight decreased 11.5% to $257.7 million from $291.3 million during the same time the previous year. The company grew margins by tightly managing costs and improving most key performance indicators. That marked the highest reported EBITDA margin in six quarters. Income from operations decreased 11.2% to $19.5 million from $21.9 million. The segment includes network and truckload operations.
- Network Operations decreased 13.2% to $193.8 million from $223.3 million.
- Truckload Operations declined 4.6% to $42.6 million from $44.7 million.
“In the expedited freight segment, we continue to make progress,” Stewart said. “As previously communicated, one of the first steps our management team took to improve financial performance was to take corrective actions on the pricing.
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“After concluding the necessary diligence, we implemented those actions in the fourth quarter of 2024 and completed them in the first quarter of this year. Following these actions, although tonnage is down, we have significantly improved reported EBITDA and margins at the expedited freight segment.”
Intermodal revenue decreased 0.3% to $59.1 million from $59.3 million during the same time last year. Drayage shipments decreased 4% year over year, while drayage revenue per shipment increased 4.4%. Income from continuing operations decreased 17% to $4.42 million from $5.32 million.
Forward Air ranks No. 37 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. 36 on the TT Top 100 list of the largest logistics companies.
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