What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-08 compared with 2024-08-09 · 161 added, 127 removed, 685 unchanged (30% of the section changed)

3 unchanged sentences

(unaudited and in thousands, except share and per share amounts)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

53 unchanged sentences

Three Months Ended

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

Operating revenue $ 655,937 $ 340,976

9 unchanged sentences

Total operating expenses 633,240 329,287

(Loss) income from continuing operations ( 1,095,755 ) 26,325

Income from continuing operations 22,697 11,689

Other income and expenses:

Interest expense, net ( 52,770 ) ( 2,655 )

Foreign exchange gain 1,567 —

Other income, net 40 —

Foreign exchange (loss) gain ( 2,812 ) —

Other income (expense), net ( 11 ) —

Total other expense ( 55,593 ) ( 2,655 )

4 unchanged sentences

Net (loss) income ( 35,335 ) 9,288

Net (loss) attributable to noncontrolling interest ( 325,914 ) —

Net income (loss) attributable to noncontrolling interest 38,073 —

Net (loss) income attributable to Forward Air $ ( 73,408 ) $ 9,288

13 unchanged sentences

Comprehensive loss attributable to noncontrolling interest 38,073 —

Comprehensive (loss) income attributable to Forward Air $ ( 646,282 ) $ 19,951

Comprehensive income attributable to Forward Air

$ ( 73,232 ) $ 9,288

The accompanying notes are an integral part of the condensed consolidated financial statement

2 unchanged sentences

(unaudited and in thousands, except per share amounts)

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

Operating revenues $ 1,841,416 $ 1,032,307

9 unchanged sentences

Total operating expenses 2,980,207 947,097

(Loss) income from operations ( 1,161,487 ) 73,521

(Loss) income from continuing operations

( 1,138,791 ) 85,210

Other income and expenses:

Interest expense, net ( 140,788 ) ( 7,595 )

Foreign exchange gain 899 —

Other income, net 49 —

Foreign exchange (loss) gain ( 1,912 ) —

Other income (expense), net 38 —

Total other expense ( 142,662 ) ( 7,595 )

4 unchanged sentences

Net (loss) income ( 1,095,476 ) 65,607

Net (loss) attributable to noncontrolling interest ( 352,996 ) —

Net income (loss) attributable to noncontrolling interest ( 314,923 ) —

Net (loss) income attributable to Forward Air $ ( 780,553 ) $ 65,607

18 unchanged sentences

(unaudited and in thousands)

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

Operating activities:

45 unchanged sentences

(In thousands)

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents:

31 unchanged sentences

Balance at June 30, 2024 27,699 $ 277 12 $ — — $ — $ 512,638 $ ( 1,000 ) $ ( 228,151 ) $ 80,453 364,217

Net loss — — — — — — — — ( 73,408 ) 38,073 ( 35,335 )

Foreign currency translation adjustment — — — — — — — 176 — — 176

Common stock issued under employee stock purchase plan — — — — — — — — — — —

Series B - Share Conversions 967 10 ( 1 ) — — — 8,066 — — ( 8,076 ) —

Share-based compensation expense — — — — — — 2,901 — — — 2,901

Payment of minimum tax withholdings on share-based awards ( 1 ) — — — — — — — ( 75 ) — ( 75 )

Tax receivable agreement liability

— — — — — — 4,650 — — — 4,650

Issuance of share-based awards 24 — — — — — — — — —

Balance at September 30, 2024 28,689 $ 287 11 $ — — $ — $ 528,255 $ ( 824 ) $ ( 301,634 ) $ 110,450 336,534

Common Stock Additional

18 unchanged sentences

Balance at June 30, 2023 25,786 $ 258 $ 277,593 $ 395,758 $ 673,609

Net income — — — 9,288 9,288

Stock options exercised — — — — —

Common stock issued under employee stock purchase plan — — — — —

Share-based compensation expense — — 3,043 — 3,043

Payment of dividends to shareholders — — 4 ( 6,202 ) ( 6,198 )

Payment of minimum tax withholdings on share-based awards — — — ( 23 ) ( 23 )

Repurchases and retirement of common stock ( 124 ) ( 1 ) — ( 14,018 ) ( 14,019 )

Issuance of share-based awards — — — — —

Balance at September 30, 2023 25,662 $ 257 $ 280,640 $ 384,803 $ 665,700

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

Description of Business and Basis of Presentation

12 unchanged sentences

Intercompany accounts and transactions have been eliminated in consolidation.

A noncontrolling interest in a consolidated subsidiary represents the portion of equity (net assets) in a subsidiary, attributable, directly or indirectly, to the Company.

Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheet and the presentation of net loss presents losses attributable to controlling and noncontrolling interests.

In the fourth quarter of 2023, the Company held interests in two wholly-owned subsidiaries of Omni Newco, LLC (“Omni”), GN Bondco, LLC and GN Loanco, LLC, that were considered Variable Interest Entities (“VIEs”).

8 unchanged sentences

Refer to Note 4, Acquisitions, for additional disclosures regarding the Company’s previously held VIEs.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2024

The condensed consolidated financial statements of the Company have been prepared in conformity with U.S.

3 unchanged sentences

Results for interim periods are not necessarily indicative of the results for the year.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2024

Foreign Currency

3 unchanged sentences

Restricted Cash

As of June 30, 2024, the Company had restricted cash in the amount of $ 19,769 related to letters of credit, which guarantee the Company’s obligations for potential claims exposure for insurance coverage.

As of September 30, 2024, the Company had restricted cash in the amount of $ 1,540 related to a letter of credit, which guarantee the Company’s obligations for potential claims exposure for insurance coverage.

Immaterial Correction of Previously Issued Consolidated Financial Statements

Subsequent to the issuance of the Company's fiscal year 2023 consolidated financial statements, the Company identified errors in the application of Accounting Standards Codification ("ASC") 835, "Debt Issuance Costs" and in the cut-off of certain payables.

In connection with debt issued in the prior year for the Omni Acquisition, approximately $ 8,200 of debt issuance costs were expensed and not capitalized.

The correction of this error resulted in an out of period adjustment to reduce Other operating expense by $ 8,200 , with an offset of $ 7,400 to debt issuance costs (a reduction of Long-term debt) and approximately $ 800 of Interest expense, net in the three and nine months ended September 30, 2024.

Additionally, the nine months ended September 30, 2024 also includes $ 3,200 of out-of-period adjustments to increase Other operating expense related to incremental payables for services incurred prior to December 31, 2023 that were not accrued at December 31, 2023.

Also, approximately $ 47,400 of year-to-date incurred losses were allocated to the noncontrolling interest associated with the goodwill impairment recorded in the previous three-month period ended June 30, 2024.

A correction resulted in approximately net $ 38,000 of income to noncontrolling interest during the three-month period ended September 30, 2024.

Refer to the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Company has evaluated the effects of the corrections described above, in accordance with guidance in ASC 250, "Accounting Change and Error Correction".

The Company concluded such corrections to be immaterial to previously issued financial statements and for the three months ended September 30, 2024.

Revenue Recognition

3 unchanged sentences

The Company does not recognize revenue in cases where collectability is not probable, and defers recognition until collection is probable or payment is received.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2024

The Company generates revenue from the delivery of a shipment and the completion of related services.

11 unchanged sentences

These factors, discretion in the amount of consideration and the selection of drivers and other vendors, support revenue recognized on a gross basis.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2024

Discontinued Operation

As previously disclosed, in December 2023, the Company made a decision to divest of the Final Mile business and the sale was completed on December 20, 2023.

As a result, the results of operations of Final Mile, have been presented under the caption “(Loss) income from discontinued operations, net of tax” in the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2023.

Settlement payment of $ 6,013 have been incurred in the nine months ended September 30, 2024 in relation to this disposal.

Summarized Discontinued Operation Financial Information

A summary of the results of operations classified as a discontinued operation, net of tax, in the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2023 is as follows:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2023

A summary of the results of operations classified as a discontinued operation, net of tax, in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2023 is as follows:

Three Months Ended Nine Months Ended

September 30, 2023 September 30, 2023

Operating revenue $ 72,471 $ 210,388

11 unchanged sentences

Income from discontinued operation, net of tax $ 2,795 $ 8,083

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2024

Expedited Freight Acquisition

6 unchanged sentences

The associated goodwill has been included in the Company’s Expedited Freight reportable segment.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2024

Acquisition of Omni

4 unchanged sentences

(i) 1,910 shares of common stock (of which 1,210 were issued upon conversion of the Series C Preferred Units upon approval of the Company’s shareholders at the 2024 Annual Shareholders Meeting held on June 3, 2024 (the “Conversion Approval”)) and (ii) 12,105 Opco Class B Units (as defined below) and corresponding Series B Preferred Units (as defined below), which are exchangeable into shares of Common Stock (of which 7,670 units were issued upon conversion of the units of Opco (defined below) designated as “Opco Series C-2 Preferred Units” upon the Conversion Approval.

The Equity Consideration represents, as of June 30, 2024, 34 % of the Company’s outstanding common stock on a fully-diluted and as-exchanged basis.

The Equity Consideration represents, as of September 30, 2024, 34 % of the Company’s outstanding common stock on a fully-diluted and as-exchanged basis.

Prior to the consummation of the Transactions, the Company completed a restructuring, pursuant to which, among other things, the Company contributed all of its operating assets to Clue Opco LLC, a newly formed subsidiary of the Company (“Opco”).

4 unchanged sentences

Pursuant to the Tax Receivable Agreement, the Company is generally obligated to pay certain Omni Holders 83.5 % of (a) the total tax benefit that the Company realizes as a result of increases in tax basis in Opco’s assets resulting from certain actual or deemed distributions and the future exchange of units of Opco for shares of securities of the Company (or cash) pursuant to the Opco LLCA, (b) certain pre-existing tax attributes of certain Omni Holders that are corporate entities for tax purposes, (c) the tax benefits that the Company realizes from certain tax allocations that correspond to items of income or gain required to be recognized by certain Omni Holders, and (d) other tax benefits attributable to payments under the Tax Receivable Agreement.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2024

As of December 31, 2023, the Company consolidated the activities of GN Bondco, LLC (VIE) and GN Loanco, LLC (VIE) with the proceeds from the Notes (as defined below) and New Term Loan (as defined below) recorded in “Noncurrent restricted cash equivalents” and the corresponding long-term debt recorded in “Long-term debt held in escrow” on the Condensed Consolidated Balance Sheets.

5 unchanged sentences

The Notes and New Term Loans are discussed in Note 6, Indebtedness.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2024

The Omni Acquisition enables the Company to provide a differentiated service offering and expanded geographic footprint to customers.

16 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

Fair Value of Assets Acquired and Liabilities Assumed

24 unchanged sentences

Net assets acquired $ 56,567 $ 2,313,653

The estimated fair values of the assets acquired and liabilities assumed are based on the Company’s best estimates and assumptions using the information available as of the acquisition date through the date of this filing.

The estimated fair values of the assets acquired and liabilities assumed including the consideration transferred are based on the Company’s best estimates and assumptions using the information available as of the acquisition date through the date of this filing.

As a part of the Omni Acquisition, the interest in Opco not owned by Company was valued to be $ 433,449 on January 25, 2024 and is disclosed in the Condensed Consolidated Statements of Shareholders’ Equity.

1 unchanged sentence

The primary areas of the acquisition accounting that are not yet finalized include, but are not limited to, the following:

(1) finalizing the review and valuation of the acquired tangible and intangible assets and liabilities (including the models, key assumptions, inputs, and estimates) and (2) finalizing the identification of the tangible and intangible assets acquired and liabilities assumed and identified.

(1) finalizing the review and valuation of the acquired tangible and intangible assets and liabilities (including the key assumptions, inputs, and estimates) and (2) finalizing the identification of the tangible and intangible assets acquired and liabilities assumed and identified.

Actual values may differ (possibly materially) when final information becomes available that differs from our current estimates.

1 unchanged sentence

The Company expects to finalize the valuation as soon as practicable, but no later than one year from the acquisition date.

For the three and six months ended June 30, 2024 , the Company recorded $ 10,018 and $ 71,942 of transactions and integration costs incurred in connection with the Omni Acquisition.

The transaction and integration costs were recorded in “Other operating expenses” in the Condensed Consolidated Statements of Operations.

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

During the three months ended September 30, 2024, the Company recorded measurement period adjustments to decrease Customer Relationships by $ 147.3 million, decrease Non-compete Agreements by $ 19.1 million, and decrease Trademarks and other by $ 19.4 million.

As a result of the adjusted acquisition-date fair value of assets acquired, the Company recorded an increase of $ 185.8 million to the Goodwill recognized.

The measurement period adjustments were recorded in the condensed consolidated financial statements as of and for the three months ended September 30, 2024 and were made to reflect facts and circumstances that existed as of the acquisition date.

The Company initially recorded the purchase price allocation on initial estimates, and in the three months ended September 30, 2024 an updated valuation was performed.

The effects of the remeasuring the intangible assets resulted in a reduction of $ 11.8 million in amortization expense for the three and nine month period ended September 30, 2024, recognized in Depreciation and amortization on the Condensed Consolidated Statements of Operations and Comprehensive (Loss) income.

The fair value estimates of assets acquired and liabilities assumed is pending the completion of various items and is anticipated to be completed in the last three months of the fiscal year.

For the three and nine months ended September 30, 2024 , the Company recorded $( 549 ) and $ 71,393 of transactions and integration costs incurred in connection with the Omni Acquisition.

The transaction and integration costs were recorded in “Other operating expenses” in the Condensed Consolidated Statements of Operations.

The preliminary estimated useful life of acquired intangible assets as of the acquisition date are summarized in the following table:

6 unchanged sentences

The following table represents the pro forma financial information as if Omni had been included in the consolidated results of the Company since January 1, 2023 (unaudited and in thousands) :

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

Pro forma revenue $ 1,923,416 $ 2,002,935

Pro forma net loss from continuing operations ( 1,155,014 ) ( 133,216 )

The pro forma financial information adjusts the revenue and net loss for amortization of the intangible assets and the fair value adjustments of the assets acquired in connection with the Omni Acquisition as if the Closing had occurred on January 1, 2023.

The pro forma financial information adjusts the net loss for amortization of the intangible assets and the fair value adjustments of the assets acquired in connection with the Omni Acquisition as if the Closing had occurred on January 1, 2023.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2024

Goodwill and Intangible Assets

Changes in the carrying amount of goodwill during the six months ended June 30, 2024 are summarized as follows:

Changes in the carrying amount of goodwill during the nine months ended September 30, 2024 are summarized as follows:

Expedited Freight Intermodal Omni Logistics Consolidated

2 unchanged sentences

Impairment — — ( 1,107,465 ) ( 1,107,465 )

Balance as of June 30, 2024 $ 141,720 $ 136,986 $ 266,674 $ 545,380

The Company's accumulated impairment loss for the Omni Logistics segment is $ 1,092,714 as of June 30, 2024.

Balance as of September 30, 2024 $ 141,720 $ 136,986 $ 437,365 $ 716,071

The Company's accumulated impairment loss for the Omni Logistics segment is $ 1,107,465 as of September 30, 2024.

The Company’s accumulated goodwill impairment also includes $ 25,686 related to impairment charges the Company recorded during 2016 pertaining to its Truckload Services reporting unit.

5 unchanged sentences

For the reporting units in the Expedited Freight and Intermodal reportable segments, we performed a discounted cash flow (DCF) analysis and these reporting units continue to result in an excess of fair value over carrying value.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2024

The Omni reporting unit’s fair value was calculated using a DCF model and a guideline public company method, with each method weighted equally.

3 unchanged sentences

Primarily due to a decrease in the market value of the Company’s common stock during the second quarter of 2024, as a result of many factors including, but not limited to, general market factors, credit rating downgrades, and changes in executive leadership, and the inherent uncertainty associated with the combined enterprise, the Omni Logistics reporting unit’s fair value was determined to be less than its carrying value.

As a result, the Company recorded a non-cash impairment charge of $ 1,092,714 during the three and six months ended June 30, 2024.

As a result, the Company recorded a non-cash impairment charge of $ 1,092,714 during the six months ended June 30, 2024.

Due to measurement period adjustments in the three months ended September 30, 2024, an additional $ 14,751 of goodwill impairment was recorded.

The cumulative goodwill impairment through the nine months ended September 30, 2024 is $ 1,107,465 .

The goodwill impairment expense was recorded in the Impairment of goodwill caption on the Condensed Consolidated Statement of Operations.

Additionally, as qualifying measurement-period adjustments are made to the Omni purchase price allocation, which is not yet finalized (See Note 4, Acquisitions), adjustments to the goodwill impairment may be required.

Additionally, as qualifying measurement-period adjustments are made to the Omni purchase price allocation, which is not yet finalized (See Note 4, Acquisitions), further adjustments to the goodwill impairment may be required.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2024

Other Intangible Assets

Changes in the carrying amount of acquired intangible assets during the six months ended June 30, 2024 are summarized as follows:

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2024 are summarized as follows:

Gross Carrying Amount

3 unchanged sentences

Acquisition 915,400 23,400 23,100 961,900

Balance as of June 30, 2024 $ 1,316,643 $ 48,916 $ 44,010 $ 1,409,569

Balance as of September 30, 2024 $ 1,169,314 $ 29,807 $ 24,600 $ 1,223,721

Accumulated Amortization

3 unchanged sentences

Amortization expense 55,373 4,884 3,080 63,337

Balance as of June 30, 2024 $ 163,683 $ 10,145 $ 5,042 $ 178,870

1 Carrying value as of June 30, 2024 and December 31, 2023 is inclusive o f $ 16,501 of accumulated impairment.

Balance as of September 30, 2024 $ 174,366 $ 11,423 $ 4,580 $ 190,369

1 Carrying value as of September 30, 2024 and December 31, 2023 is inclusive o f $ 16,501 of accumulated impairment.

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

June 30, 2024

Long-term debt consisted of the following as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

September 30, 2024

Long-term debt consisted of the following as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

Term Loan, expiring 2030 1

28 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

The New Term Loans bear interest based, at Opco’s election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin.

9 unchanged sentences

Loans made under the Revolving Credit Facility bear interest based, at Opco’s election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin.

Until delivery of a compliance certificate in respect of the fiscal quarter ending June 30, 2024, the applicable margin for SOFR loans is 4.25 % and the applicable margin for base rate loans is 3.25 %.

Until delivery of a compliance certificate in respect of the fiscal quarter ending September 30, 2024, the applicable margin for SOFR loans is 4.25 % and the applicable margin for base rate loans is 3.25 %.

Thereafter, the applicable margin can range from 3.75 % to 4.25 % for SOFR loans and from 2.75 % to 3.25 % for base rate loans, in each case depending on Opco’s first lien net leverage ratio, as set forth in the Credit Agreement.

14 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

As of June 30, 2024 the Company had no outstanding borrowings under this revolving credit facility.

September 30, 2024

As of September 30, 2024 the Company had no outstanding borrowings under this revolving credit facility.

Former Credit Facility

11 unchanged sentences

Letters of Credit

The Company had an arrangement under the Facility to issue letters of credit, which guarantee the Company’s obligations for potential claims exposure for insurance coverage.

As of December 31, 2023 and June 30, 2024, outstanding letters of credit totaled $ 19,769 .

The Company had an arrangement to issue a letter of credit, which guarantee the Company’s obligations for potential claims exposure for insurance coverage.

As of December 31, 2023 and September 30, 2024, the outstanding letter of credit totaled $ 19,834 and $ 1,540 , respectively.

Under the Revolving Credit Facility, the outstanding letter of credit totaled $ 17,688 as of September 30, 2024.

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

Net (Loss) Income Per Share

2 unchanged sentences

Diluted net income per common share assumes the exercise of outstanding stock options and the vesting of performance share awards using the treasury stock method when the effects of such assumptions are dilutive.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2024

A reconciliation of net income attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income per share during the three and six months ended June 30, 2024 and 2023 is as follows:

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

A reconciliation of net income attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income per share during the three and nine months ended September 30, 2024 and 2023 is as follows:

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Net (loss) income from continuing operations $ ( 72,271 ) $ 6,493 $ ( 774,540 ) $ 57,524

1 unchanged sentence

Net (loss) income attributable to Forward Air ( 73,408 ) 9,288 ( 780,553 ) 65,607

Dividends allocated to Opco C-2 Preferred Units — — —

Income allocated to participating securities from continuing operations — ( 40 ) — ( 313 )

19 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

The number of shares that were not included in the calculation of net income per diluted share because to do so would have been anti-dilutive for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

September 30, 2024

The number of shares that were not included in the calculation of net income per diluted share because to do so would have been anti-dilutive for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Anti-dilutive stock options 287 112 287 105

7 unchanged sentences

As a result, the Company’s effective tax rate differs materially from the statutory rate.

For the six months ended June 30, 2024 and 2023, the Company recorded an income tax benefit of $ 193,292 and income tax expense of $ 17,550 , respectively.

The effective tax rate of 15.5 % for the six months ended June 30, 2024 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of the tax impact of the goodwill impairment charge, noncontrolling interest, non-deductible executive compensation, excess tax benefits realized on share-based awards, partially offset by state income taxes, net of the federal benefit, and foreign taxes.

The effective tax rate of 27.8 % for the six months ended June 30, 2023 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards.

For the nine months ended September 30, 2024 and 2023, the Company recorded an income tax benefit of $ 191,990 and income tax expense of $ 20,091 , respectively.

The effective tax rate of 15.0 % for the nine months ended September 30, 2024 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of the tax impact of the goodwill impairment charge, noncontrolling interest, partially offset by state income taxes, net of the federal benefit, and foreign taxes.

The effective tax rate of 25.9 % for the nine months ended September 30, 2023 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards.

The Company recognizes income tax benefits from uncertain tax positions where the realization of the ultimate benefit is uncertain.

As of both June 30, 2024 and December 31, 2023, the Company had $ 153 of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

As of both June 30, 2024 and December 31, 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 82 .

As of both September 30, 2024 and December 31, 2023, the Company had $ 153 of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

As of both September 30, 2024 and December 31, 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 82 .

With a few exceptions, the Company is no longer subject to U.S.

6 unchanged sentences

In connection with the Omni Acquisition, the Company entered into a Tax Receivable Agreement with certain Omni Holders.

As of June 30, 2024, the Company recorded a Tax Receivable Agreement liability of approximately $ 13,270 , after concluding that such Tax Receivable Agreement payments would be probable based on estimates of future taxable income over the term of the Tax Receivable Agreement.

As of September 30, 2024, the Company recorded a Tax Receivable Agreement liability of approximately $ 36,797 , after concluding that such Tax Receivable Agreement payments would be probable based on estimates of future taxable income over the term of the Tax Receivable Agreement.

The determination of the Tax Receivable Agreement liability requires the Company to make judgments in estimating the amount of tax attributes as of the date of exchanges (such as cash to be received by the Company on a hypothetical sale of assets and allocation of gain or loss to the Company at the time of the exchanges taking into consideration partnership tax rules).

4 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

The Organization for Economic Co-operation and Development enacted model rules for a new global minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or are in the process of enacting, legislation considering these model rules.

These rules did not have a material impact on our taxes for the three and six months ended June 30, 2024.

These rules did not have a material impact on our taxes for the three and nine months ended September 30, 2024.

The Organization for Economic Co-operation and Development (“OECD”), continues to put forth various initiatives, including Pillar Two rules which include the introduction of a global minimum tax at a rate of 15%.

1 unchanged sentence

A number of other countries are also implementing similar legislation.

As of June 30, 2024, based on the countries in which we do business that have enacted legislation effective January 1, 2024, the impact of these rules to our financial statements was not material.

As of September 30, 2024, based on the countries in which we do business that have enacted legislation effective January 1, 2024, the impact of these rules to our financial statements was not material.

This may change as other countries enact similar legislation and further guidance is released.

10 unchanged sentences

• Level 3 - Model-derived valuations in which one or more significant inputs are unobservable.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 are summarized below:

As of June 30, 2024

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 are summarized below:

As of September 30, 2024

Level 1 Level 2 Level 3 Total

4 unchanged sentences

Cash, cash equivalents and restricted cash, accounts receivable, other receivables and accounts payable are valued at their carrying amounts in the Company’s Condensed Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial instruments.

As of June 30, 2024, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 49,944 , compared to its carrying value of $ 51,832 .

As of December 31, 2023, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 38,926 , compared to its carrying value of $ 39,381 .

The carrying value of the long-term debt approximates fair value based on the borrowing rates currently available for a loan with similar terms and average maturity.

In connection with the Omni acquisition noted in Note 4 and the deal structure, Preferred B shares totaling 966,764 were converted into common stock during the quarter and as a result, Tax Receivable Agreement liability increased to $ 36.8 million from $ 13.3 million.

See Note 8 for more information on the Tax Receivable Agreement.

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

As of September 30, 2024, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 48,097 , compared to its carrying value of $ 49,472 .

As of December 31, 2023, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 38,926 , compared to its carrying value of $ 39,381 .

The carrying value of the long-term debt approximates fair value based on the borrowing rates currently available for a loan with similar terms and average maturity.

Shareholders’ Equity

1 unchanged sentence

Pursuant to Articles of Amendment to the Restated Charter of the Company filed with the Secretary of State of the State of Tennessee at the Closing (the “Charter Amendment”), the Company established the terms of a new series of preferred stock of the Company designated as “Series B Preferred Stock” (the “Series B Preferred Stock”), and, at the Closing, certain Omni Holders received fractional units (the “Series B Preferred Units”) each representing one one-thousandth of a share of the Company Series B Preferred Stock.

Each Series B Preferred Unit will, together with a corresponding Opco Class B Unit, be exchangeable at the option of the holder thereof into one share of the Company’s common stock.

Each Series B Preferred Unit is, together with a corresponding Opco Class B Unit, exchangeable at the option of the holder thereof into one share of the Company’s common stock.

Holders of Series B Preferred Units and holders of the Company’s common stock will vote together as a single class on all matters to be voted on by the Company’s shareholders, subject to limited exceptions.

2 unchanged sentences

A Series B Preferred Unit and its corresponding Opco Class B Unit may only be transferred together as a single, combined unit.

Series C Preferred Stock

Pursuant to the Charter Amendment, the Company established the terms of a new series of convertible preferred stock of the Company designated as “Series C Preferred Stock” (the “Series C Preferred Stock”), and, at Closing, certain Omni Holders received fractional units (each, a “Series C Preferred Unit”) each representing one one-thousandth of a share of Series C Preferred Stock.

The Series C Preferred Units were converted into shares of the Company’s common stock upon approval of the Conversion Proposal as further discussed above.

Prior to the conversion of the Series C Preferred Units t he liquidation preference of the Series C Preferred Units was equal to $ 110.00 per unit, subject to adjustment for any in-kind payment of the Annual Coupon as described below (the “Liquidation Preference”).

In addition, the Series C Preferred Units accrue on each anniversary of issuance a cumulative annual dividend (without any interim accrual) equal to the product of (a) the 14.0 % rate fixed at Closing multiplied by (b) the Liquidation Preference (the “Annual Coupon”).

The Annual Coupon will be paid, at the Company’s option, in cash or in-kind by automatically increasing the Liquidation Preference in an equal amount.

Commencing on the six th anniversary of the Closing (and, thereafter, only during the 60 -day period following any anniversary of the Closing), the Series C Preferred Units will be callable at the Company’s option in whole (and not in part), at a call price per Series C Preferred Unit equal to (a) the product of (i) the greater of (A) the outstanding liquidation preference of such Series C Preferred Unit and (B) the product of (x) the number of shares of the Company’s common stock into which such Series C Preferred Unit would be convertible upon the receipt of the Conversion Approval, and (y) the 20 -day volume-weighted average price per share of the Company’s common stock during a defined period prior to the call, and (ii) 103 %, plus (b) the amount of all declared and unpaid dividends in respect of such Series C Preferred Unit.

Cash Dividends

During each quarter of 2023, the Board declared and the Company paid a quarterly cash dividend of $ 0.24 per common share.

No dividends were declared during the six months ended June 30, 2024.

Stock Repurchase Program

1 unchanged sentence

The 2019 Repurchase Plan expires when the shares authorized for repurchase are exhausted or the 2019 Repurchase Plan is canceled.

During the nine months ended September 30, 2024, the Company did not repurchase any shares of common stock through open market transactions.

During the nine months ended September 30, 2023, the Company repurchased through open market transactions 883 shares of common stock for $ 93,811 , or an average of $ 106.21 per share.

All shares received were retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained (Deficit) Earnings ” in the Condensed Consolidated Balance Sheets.

As of September 30, 2024, the remaining shares permitted to be repurchased under the 2019 Repurchase Plan were approximately 1,349 shares.

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

June 30, 2024

During the six months ended June 30, 2024, the Company did not repurchase any shares of common stock through open market transactions.

During the six months ended June 30, 2023, the Company repurchased through open market transactions 759 shares of common stock for $ 79,792 , or an average of $ 105.09 per share.

As of June 30, 2024, the remaining shares permitted to be repurchased under the 2019 Repurchase Plan were approximately 1,349 shares.

September 30, 2024

Commitments and Contingencies

17 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

For vehicle liability, the Company retains a portion of the risk.

23 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

September 30, 2024

Segment Reporting

9 unchanged sentences

Any self-insurance loss exposure beyond the deductible allocated to each segment is recorded in Corporate.

Segment results from operations for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended June 30, 2024

Segment results from operations for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended September 30, 2024

Expedited Freight Intermodal Omni Logistics Corporate Eliminations Consolidated

5 unchanged sentences

Purchases of property and equipment 7,577 79 2,758 — — 10,414

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Expedited Freight Intermodal Omni Logistics Corporate Eliminations Consolidated

5 unchanged sentences

Purchases of property and equipment 5,223 21 — — — 5,244

Revenue from the individual services within the Expedited Freight segment for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Revenue from the individual services within the Expedited Freight segment for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Expedited Freight revenues:

6 unchanged sentences

(unaudited and in thousands, except per share data)

June 30, 2024

Six Months Ended June 30, 2024

September 30, 2024

Nine Months Ended September 30, 2024

Expedited Freight Intermodal Omni Logistics Corporate Eliminations Consolidated

5 unchanged sentences

Purchases of property and equipment 16,502 1,629 11,679 — — 29,810

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Expedited Freight Intermodal Omni Logistics Corporate Eliminations Consolidated

5 unchanged sentences

Purchases of property and equipment 21,496 584 — — — 22,080

As of June 30, 2024 $ 657,434 $ 261,170 $ 1,959,593 $ 189,133 $ ( 14 ) $ 3,067,316

As of September 30, 2024 $ 674,896 $ 261,081 $ 1,971,503 $ 148,378 $ ( 18 ) $ 3,055,840

As of December 31, 2023 661,270 270,421 — 2,047,901 ( 59 ) 2,979,533

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements