What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-24 compared with 2024-03-15 · 186 added, 140 removed, 304 unchanged (52% of the section changed)

5 unchanged sentences

We utilize an asset-light strategy to minimize our investments in equipment and facilities and to reduce our capital expenditures.

Our services are classified into two reportable segments:

Expedited Freight and Intermodal.

Globally, we provide customized asset-light, high-touch logistics and supply chain management solutions with deep customer relationships in high-growth end markets.

Our services are classified into three reportable segments:

Expedited Freight, Omni Logistics and Intermodal.

Our Expedited Freight segment provides expedited regional, inter-regional and national LTL services.

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We plan to grow our LTL geographic footprint through greenfield start-ups as well as through acquisitions.

Our Omni Logistics segment provides a full suite of global logistics services.

Services include air and ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, time-definite transportation services and other supply chain solutions.

Other than revenue performance and given the service mix of Omni, key operating statistics are being determined as we continue to work through the integration.

Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads.

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We monitor and analyze a number of key operating statistics in order to manage our business and evaluate our financial and operating performance.

These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight and Intermodal reportable segments.

These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight, Omni and Intermodal reportable segments.

Our key operating statistics should not be interpreted as better measurements of our results than income from operations as determined under GAAP.

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Trends and Developments

Intermodal Acquisitions

In May 2022, we acquired certain assets and liabilities of Edgmon Trucking, LLC (“Edgmon”) for $40,993 and a potential earn-out of up to $5,000, based on the achievement of certain profit contribution milestones over a nineteen month period, beginning May 31, 2022.

The nineteen month period ended on December 31, 2023 and the certain profit contribution milestones were not achieved during that period.

Edgmon, headquartered in Kent, Washington, operates a terminal in Kent and a yard in Seattle, servicing both the Port of Seattle and the Port of Tacoma.

The acquisition of Edgmon marks our first Intermodal location on the West Coast, a key area of expansion in the Intermodal strategic growth plan.

The acquisition was funded using cash flows from operations.

The results of Edgmon have been included in our consolidated financial statements as of and from the date of acquisition.

The associated goodwill has been included in our Intermodal reportable segment.

Omni Acquisition

In January 2024, we acquired Omni for a combination of (a) $100,499 million in cash and (b) (i) common equity consideration representing 14,015 shares of our common stock on an as-converted and as-exchanged basis.

Omni, headquartered near Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with customer relationships in high-growth end markets.

Omni delivers domestic and international freight forwarding, fulfillment services, customs brokerage, distribution, and value-added services for time-sensitive freight to U.S.-based customers operating both domestically and internationally.

Expedited Freight Acquisitions

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The associated goodwill has been included in our Expedited Freight reportable segment.

Omni Acquisition

In January 2024, we acquired Omni for a combination of (a) $20 million in cash and (b) (i) common equity consideration representing 5,135 shares of our common stock on an as-converted and as-exchanged basis and (ii) non-voting, convertible perpetual preferred equity consideration representing, if our shareholders approve, an additional 8,880 shares of our common stock on an as-exchanged basis.

Omni, headquartered in Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with customer relationships in high-growth end markets.

See Note 3, Acquisitions , to our Consolidated Financial Statements for more information about our acquisitions.

We depend heavily upon the availability of adequate diesel fuel supplies, and recently, fuel availability and prices have fluctuated significantly.

We depend heavily upon the availability of adequate diesel fuel supplies.

Fuel availability and prices can be impacted by factors beyond our control, such as natural or man-made disasters, adverse weather conditions, political events, economic sanctions imposed against oil-producing countries or specific industry participants, disruptions or failure of technology or information systems, price and supply decisions by oil producing countries and cartels, terrorist activities, armed conflict, tariffs, sanctions, other changes to trade agreements and world supply and demand imbalance.

Through our fuel surcharge programs, we have been able to mitigate the impact of fluctuations in fuel prices.

Through our fuel surcharge programs, we are able to mitigate the impact of fluctuations in fuel prices.

Our fuel surcharge rates are set weekly based on the national average for fuel prices as published by the U.S.

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Like other providers of freight transportation services, our business has been impacted by the macroeconomic conditions of the past year.

Industry freight volumes, as measured by the Cass Freight Index, decreased in 2023 compared to 2022.

Industry freight volumes, as measured by the Cass Freight Index, decreased in 2024 compared to 2023, which was down as compared to 2022.

Transportation rates continued to decline throughout 2024 as carrier capacity exceeded shipper demand in the United States.

While recently elevated inventory levels have largely stabilized, shippers continue to closely monitor consumer spending and carefully manage inventory restocking activities.

Consecutive quarters of weak consumer demand have nearly eliminated the challenges from port congestion and transportation equipment shortages as seen in prior years.

This period of weak consumer demand has nearly eliminated the challenges from port congestion and transportation equipment shortages as seen in prior years.

Despite the weak demand, new vessel deliveries continue to add capacity and new vessel deliveries are expected to continue in the near term.

Recent global disruptions have impacted the capacity market, and the disruptions are expected to continue, although the timeline to resolution remains unclear.

The air freight market has seen an increase in capacity resulting from increased commercial flight activity to support elevated consumer travel.

Intermodal volumes, heavily influenced by United States imports, have declined in 2023 due to inflation, customer demand and a shift of spending by consumers from goods to services.

For Truckload, the capacity contraction has created a sustained market of depressed spot market truckload rates with modest signs of improvement.

The air freight market has seen an increase in capacity resulting from increased commercial flight activity to

support elevated consumer travel.

Intermodal volumes, heavily influenced by United States imports, have declined for much of 2024 due to inflation, customer demand and a shift of spending by consumers from goods to services.

For Truckload, the capacity contraction has created a sustained market of depressed spot market truckload rates with modest signs of improvement, especially in Q4 of 2024.

These trends drove a decline in the volume of freight shipped by our customers and placed pressure on rates in a soft freight environment.

While these trends have continued through the early months of 2024, industry projections expect a slight improvement in the fundamentals within the freight market in the second half of 2024.

While these trends may continue through the early months of 2025, industry projections expect a slight improvement in the fundamentals within the freight market in 2025.

Strategic Review

In January 2025, the Board announced that it had initiated a comprehensive review of strategic alternatives to maximize shareholder value.

The Board will consider a range of options, including a potential sale, merger or other strategic or financial transaction relative to the long-term value potential of the Company on a standalone basis.

The Board has retained Goldman Sachs & Co.

LLC to serve as its financial advisor.

The Board has not set a timetable for the conclusion of this review, nor has it made any decisions related to any further actions or potential strategic alternatives at this time.

There can be no assurance that any transaction or other strategic outcome will be approved by the Board or otherwise consummated.

The Company does not intend to disclose developments relating to this process until it determines that further disclosure is appropriate or necessary.

Recent Events and Factors Affecting Comparability

Omni Acquisition

On January 25, 2024, we completed the Omni Acquisition pursuant to which we acquired Omni for a combination of

(a) $100,499 in cash (which includes pre-acquisition Omni costs of approximately $80 million) (b) 14,015 shares of common stock on an as-converted and as-exchanged basis consisting of:

(i) 1,910 shares of common stock (of which 1,210 were issued upon conversion of the Series C Preferred Units upon the Conversion Approval) and (ii) 12,105 Opco Class B Units and corresponding Series B Preferred Units, which are exchangeable into shares of common stock (of which 7,670 units were issued upon conversion of the units of Opco designated as “Opco Series C-2 Preferred Units” upon the Conversion Approval).

See Note 3, Acquisitions, to our Consolidated Financial Statements for more information about our acquisitions.

Omni revenues and segment incom e from January 25, 2024 through December 31, 2024 are included in our consolidated statements of comprehensive (loss) income for the year ended December 31, 2024.

(Unaudited and in Thousands)

Year Ended December 31, 2024

Percent of Revenue

Operating revenue $ 1,196,841 100.0 %

Operating expenses:

Purchased transportation 701,035 58.6

Salaries, wages and employee benefits 215,518 18.0

Operating leases 96,500 8.1

Depreciation and amortization 83,542 7.0

Insurance and claims 12,297 1.0

Fuel expense 3,149 0.3

Other operating expenses 101,206 8.5

Impairment of goodwill 1,028,397 85.9

Total operating expenses 2,241,644 187.3

Loss from operations

(1,044,803) (87.3) %

Results from Operations

Year Ended December 31, 2024 compared to Year Ended December 31, 2023

The following table sets forth our consolidated financial data for the years ended December 31, 2023 and 2022 (in thousands):

The following table sets forth our consolidated financial data for the years ended December 31, 2024 and 2023:

(Unaudited and in Thousands)

December 31, 2024 December 31, 2023 Change Percent Change

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Expedited Freight $ 1,115,163 $ 1,096,958 $ 18,205 1.7 %

Omni 1,196,841 — 1,196,841 N/A

Intermodal 232,832 274,043 (41,211) (15.0)

Corporate 164 — 164 N/A

Eliminations and other operations (70,738) (266) (70,472) 26,493.2

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Other operating expenses 309,508 191,809 117,699 61.4

Impairment of goodwill 1,028,397 — 1,028,397 N/A

Total operating expenses 3,537,198 1,282,525 2,254,673 175.8

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Expedited Freight 67,951 116,040 (48,089) (70.8)

Omni (1,044,803) — (1,044,803) N/A

Intermodal 18,925 25,327 (6,402) (33.8)

Other operations (105,009) (53,157) (51,852) 97.5

Income from continuing operations 88,210 247,591 (159,381) (64.4)

Other expense:

Income (loss) from continuing operations (1,062,936) 88,210 (1,151,146) (1,305.0)

Other income and expense:

Interest expense, net (189,215) (31,571) (157,644) (499.3)

Foreign exchange gain 1,093 — 1,093 N/A

Other income (expense), net 1,226 — 1,226 N/A

Total other expense (186,896) (31,571) (155,325) 492.0

Income from continuing operations before income taxes 56,639 242,453 (185,814) (76.6)

Income tax expense 13,836 63,039 (49,203) (78.1)

Net income from continuing operations 42,803 179,414 (136,611) (76.1)

Income from discontinued operation, net of tax 124,548 13,777 110,771 804.0

Net income and comprehensive income $ 167,351 $ 193,191 $ (25,840) (13.4) %

Income (loss) from continuing operations before income taxes (1,249,832) 56,639 (1,306,471) (2,306.7)

Income tax expense (benefit) (124,991) 13,836 (138,827) (1,003.4)

Net (loss) income from continuing operations

(1,124,841) 42,803 (1,167,644) (2,727.9)

Income (loss) from discontinued operation, net of tax (6,387) 124,548 (130,935) (105.1)

Net (loss) income (1,131,228) 124,548 (1,255,776) (1,008.3)

Net (loss) attributable to noncontrolling interest (314,259) — (314,259) N/A

Net (loss) income attributable to Forward Air $ (816,969) $ 167,351 $ (984,320) (588.2) %

Operating Revenues

Operating revenues decreased $308,899, or 18.4% to $1,370,735 for the year ended December 31, 2023 compared to $1,679,634 for the same period in 2022.

The revenue decrease was primarily driven by lower revenue from our Expedited Freight segment of $163,163 due to decreased Network and Truckload revenue, and from our Intermodal segment of $145,675.

The results for our two reportable segments are discussed in detail in the following sections.

Operating revenues increased $1,103,527, or 80.5% to $2,474,262 for the year ended December 31, 2024 compared to $1,370,735 for the same period in 2023.

The increase was primarily due to the inclusion of $1,196,841 from the Omni Logistics segment and an increase in our Expedited Freight segment of $18,205 due to increased Truckload and Network revenue, offset by a decrease from our Intermodal segment of $41,211.

The results for our reportable segments are d iscussed in detail in the following sections.

Operating Expenses

Operating expenses decreased $149,518, or 10.4%, to $1,282,525 for the year ended December 31, 2023 compared to $1,432,043 for the same period in 2022.

The decrease was primarily driven by a decrease in purchased transportation of $144,217, and a decrease in salaries, wages and employee benefits of $15,193 in both our Expedited Freight and Intermodal segments, partially offset by due diligence, transaction and integration costs related to the acquisition of Omni.

Purchased transportation expense includes our Leased Capacity Providers, third-party motor carriers and capacity secured by transportation intermediaries, while Company-employed drivers are included in salaries, wages and employee benefits.

Purchased transportation expense primarily decreased due to fewer Network miles, Intermodal drayage shipments and Truckload brokerage loads in 2023 as compared to the same period in 2022.

In addition, we utilized fewer third-party motor carriers in 2023 as compared to the same period in 2022.

Salaries, wages and employee benefits decreased primarily due to a decrease in the reserve for incentive compensation, partially offset by an increase in the reserve for group health insurance claims, incremental Company drivers hired and an increase in salaries and wages compared to the same period in 2022.

Income from Continuing Operations and Segment Operations

Income from continuing operations decreased $159,381, or 64.4%, to $88,210 for the year ended December 31, 2023, compared to $247,591 for the same period in 2022.

The decrease was primarily driven by a decrease in income from continuing operations in our Expedited Freight segment, Intermodal segment, and Other Operations of $76,543, $31,547 and $51,291.

Operating exp enses increased $2,254,673, or 175.8%, to $3,537,198 for the year ended December 31, 2024 compared to $1,282,525 for the same period in 2023.

The increase was primarily due to the inclusion $2,241,644 of operating expenses from the Omni Logistics segment which includes a goodwill impairment charge of $1,028,397 and a $66,294 increase in operating expenses from the Expedited Freight segment due to margin compression, partially offset by a $34,809 decrease in operating expenses from the Intermodal segment from a decrease in drayage shipments.

Income (loss) from Continuing Operations and Segment Operations

Income from continuing operations changed by $1,151,146, or 1,305.0%, to a loss of $1,062,936 for the year ended December 31, 2024, compared to $88,210 of income for the same period in 2023.

The loss was primarily driven by Omni Logistics segment loss of $1,044,803 as a result of the goodwill impairment charge of $1,028,397 , loss from Other Operations in the amount of $ 105,009 , partially offset by Expedited Freight segment of income of $67,951, and in our Intermodal segment amounting to $18,925.

Interest Expense, net

Interest expense, net was $189,215 for the year ended December 31, 2024 compared to $31,571 for the same period in 2023.

The increase in interest expense was due to the interest accrued on both the Senior Secured Notes and Senior Secured Term Loan Facility while held in escrow.

Both debt instruments were entered into in order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection with the transaction.

A partial offset of the accrued interest was the interest income earned on the reinvestment of the proceeds from the Senior Secured Notes and Senior Term Loan Facility into a short-term instrument while held in escrow.

In addition to the interest accrued on the Senior Secured Notes and Senior Secured Term Loan Facility, the variable interest rate on our outstanding borrowings under our existing credit facility was higher in 2023 than in 2022.

The weighted-average interest rate on the borrowings under our existing credit facility was 6.34% and 2.77% for the year ended December 31, 2023 and 2022, respectively.

The increase in interest expense was due to higher outstanding debt balances during the year ended December 31, 2024 compared to the same period in 2023, as well as higher variable interest rates on borrowings acquired during the Omni Acquisition.

Income Taxes on a Continuing Basis

The effective tax rate on a continuing basis for the year ended December 31, 2023 was 24.4%, compared to a rate of 26.0% for the same period in 2022.

The lower effective tax rate for the year ended December 31, 2023 was primarily due to a decrease in the non-deductible compensation in 2023 compared to the same period in 2022 and a provision to return benefit adjustment recorded in 2023 compared to a provision to return expense adjustment recorded in 2022.

Income from Discontinued Operation, net of tax

Income from discontinued operation, net of tax increased $110,771, or 804.0%, to $124,548 for the year ended December 31, 2023 compared to $13,777 for the same period in 2022.

The increase was primarily driven by the sale of our Final Mile business in December 2023 that resulted in a gain on sale of $155,829.

As a result of the foregoing factors, net income decreased $25,840, or 13.4%, to $167,351 for the year ended December 31, 2023 compared to $193,191 for the same period in 2022.

The effective tax rate on a continuing basis for the year ended December 31, 2024 was 10.0% , co mpared to a rate of 24.4% for the same period in 2023.

The effective tax rate for the year ended December 31, 2024 is significantly lower than historical rates due to the goodwill impairment charge in the current year.

Income (loss) from Discontinued Operation, net of tax

Loss from discontinued operations of $6,387, net of tax, resulted in an unfavorable change of $130,935, or 105.1% for the year ended December 31, 2024 compared to income of $124,548 for the same period in 2023.

The loss was due to final net working capital settlement following the December 2023 sale of the Final Mile business.

As a result of the foregoing factors, net income decreased $984,320, or 588.2%, to a net loss of $816,969 for the year ended December 31, 2024 compared to net income of $167,351 for the same period in 2023.

Expedited Freight - Year Ended December 31, 2024 compared to Year Ended December 31, 2023

The following table sets forth our financial data of the Expedited Freight segment for the years ended December 31, 2023 and 2022 (unaudited and in thousands):

The following table sets forth our financial data of the Expedited Freight segment for the years ended December 31, 2024 and 2023:

(Unaudited and in Thousands)

December 31, 2024 Percent of Revenue December 31, 2023 Percent of Revenue Change Percent Change

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Operating Revenues

Expedited Freight operating revenue decreased $163,163, or 12.9%, to $1,096,958 for the year ended December 31, 2023 from $1,260,121 for the same period in 2022.

The decrease was driven by decreased Network and Truckload revenue.

Network revenue decreased due to a 3.8% decrease in pounds per day and a 5.8% decrease in revenue per hundredweight excluding fuel as compared to the same period in 2022.

The decrease in tonnage reflects an increase in weight per shipment of 5.0% on 8.4% fewer shipments per day.

The decrease in tonnage is due to softer market demand for our services driven by the weak freight environment while the increase in weight per shipment was the result of more dense freight in our network driven by a change in the mix of services provided to customers.

Fuel surcharge revenue decreased $34,299 or 14.9% as a result of the decline in the average price of fuel and a decrease in tonnage in our Network.

Truckload revenue decreased $62,466 primarily due to the challenged market conditions that led to decreased customer demand for our services.

Other revenue, which includes accessorial revenue, warehousing and terminal handling, increased $1,171 due to targeted initiatives, partially offset by the fewer number of shipments.

Expedited Freight operating reven ue increased $18,205, or 1.7%, to $1,115,163 for t he year ended December 31, 2024 from $1,096,958 for the same period in 2023.

The increase was driven by higher Network and Truckload revenue.

Network revenue increased from 3.9% higher tonnage with a slight offset from 3.4% decrease in revenue per hundredweight ex fuel, as compared to the same period in the prior year.

The increase in tonnage reflects an increase in weight per shipment of 4.8% on 0.8% less shipments.

The increase in weight per shipment was the result of more dense freight in our network driven by a change in the mix of services provided to customers.

The decrease in ship ments resulted from lower demand for our premium services as a result of conservative spending due to inflationary pressures, higher interest rates, and economic uncertainty.

Truckload reven ue increased $ 10,942 primarily due to higher revenue per shipment, resulting from inflationary pressures, compared to the same period in 2023.

Purchased Transportation

Expedited Freight purchased transportation expense decreased by $113,469, or 18.2%, to $511,525 for the year ended December 31, 2023 from $624,994 for the same period in 2022.

Expedited Freight purchased transportation was 46.6% of Expedited Freight operating revenue for the year ended December 31, 2023 compared to 49.6% for the same period in 2022.

Expedited Freight purchased transportation includes Leased Capacity Providers, third-party motor carriers and transportation intermediaries, while expenses for Company-employed drivers are included in salaries, wages and employee benefits.

The decrease in purchased transportation expense was primarily due to lower volumes in Network and Truckload and the change in the mix of freight capacity purchased from Leased Capacity Providers, third-party motor carriers, and transportation intermediaries for Network and Truckload services.

For the year ended December 31, 2023, 64.8%, 30.4% and 4.8% of our freight capacity was purchased from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers, respectively for Network and Truckload.

Expedited Freight purchased transportation expense increased by $34,933, or 6.8%, to $546,458 for the year ended December 31, 2024 from $511,525 for the same period in 2023.

Purchased transportation was 49.0% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 46.6% for the same period in 2023.

Expedited Freight purchased transportation includes Leased Capacity Providers and third-party motor carriers and transportation intermediaries, while Company-employed drivers are included in salaries, wages and employee benefits.

The increase in purchased transportation was primarily due to higher freight capacity purchased from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers for Network and Truckload services.

Also, third-party providers miles driven was higher during the year and reflect a pay-per-mile cost model.

For the year ended December 31, 2024, we purchased 63.8%, 33.2% and 4.0% of our freight capacity from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers, respectively.

This compares to 64.8%, 30.4% and 4.8%, respectively, for the same period in 2023.

Salaries, Wages, and Employee Benefits

Expedited Freight salaries, wages and employee benefits decreased by $7,348, or 3.1%, to $226,528 for the year ended December 31, 2023 from $233,876 for the same period in 2022.

Expedited Freight salaries, wages and employee benefits increased by $15,883, or 7.0%, to $242,411 for the year ended December 31, 2024 from $226,528 for the same period in 2023.

Salaries, wages and employee benefits were 21.7% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 20.7% for the same period in 2023.

The decrease in salaries, wages and employee benefits expense was primarily due to a decrease in the reserve for incentive compensation, partially offset by incremental Company drivers hired in the first half of 2023 and an increase in salaries and wages compared to the same period in 2022.

The increase in s alaries, wages and employee benefits expense was primarily due to elevated Company-employed driver count and wage rates compared to the same period in 2023.

Operating Leases

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Operating leases were 5.7% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 5.6% for the same period in 2023.

The increase in operating lease expense was primarily due to higher facility expense as a result of new locations added in the first half of 2023 and higher facility operating costs for the year ended December 31, 2023 compared to the same period in 2022.

The increase in operating lease expense was primarily due to leased truck excess mileage expense for the year ended December 31, 2024 compared to the same period in 2023.

Depreciation and Amortization

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Depreciation and amortization expense as a percentage of Expedited Freight operating revenue was 3.8% for the year ended December 31, 2024 compared to 3.4% for the same period in 2023.

The increase in depreciation and amortization expense was primarily due to an increase in equipment depreciation for the year ended December 31, 2023 compared to the same period in 2022 as a result of purchasing and placing in service new equipment in 2023.

The increase in depreciation and amortization expense was primarily the result of purchasing and placing in service new equipment in the second half of 2023 and first half of 2024.

Insurance and Claims

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Insurance and claims as a percentage of Expedited Freight operating revenue was 3.9% for the year ended December 31, 2024 compared to 3.5% for the same period in 2023.

The increase in insurance and claims expense was primarily due to an increase in equipment repair claims and insurance premiums, partially offset by a decrease in cargo claims for the year ended December 31, 2023 as compared to the same period in 2022.

See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations ” section below.

The increase in insurance and claims expense was primarily due to an increase in equipment repair claims, vehicle liability and cargo claims, and insurance premiums, for the year ended December 31, 2024 as compared to the same period in 2023.

Expedited Freight fuel expense decreased $1,151, or 10.6%, to $9,733 for the year ended December 31, 2024 from $10,884 for the same period in 2023.

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Other operating expenses include contract labor, equipment maintenance, facility expenses, legal and professional fees and other over-the-road costs.

The increase in other operating expenses was primarily due to an increase in contract labor, professional fees, software license and subscription fees, tolls and indirect taxes, partially offset by a decrease in maintenance and repair expense for the year ended December 31, 2023 compared to the same period in 2022.

The increase in other operating expenses was primarily driven by an increase in software license and subscription fees and utilities and communications expenses, partially offset by a decrease in professional fees, maintenance and repair expense and supply parts, for the year ended December 31, 2024 compared to the same period in 2023.

Income from Operations

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Expedited Freight income from operations was 6.1% of operating revenue for the year ended December 31, 2024, compared to 10.6% for the same period in 2023.

The decrease in income from operations as a percentage of operating revenue was driven by decreased tonnage and revenue per hundredweight excluding fuel combined with lower fuel surcharge revenue, partially offset by the mix of freight capacity purchased from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers for Network and Truckload for the year ended December 31, 2023 compared to the same period in 2022.

The decrease in income was primarily a result of 6.8% higher operating expenses without sufficient increase in total operating revenue, which grew by 1.7%.

Intermodal - Year Ended December 31, 2024 compared to Year Ended December 31, 2023

The following table sets forth our financial data of the Intermodal segment for the years ended December 31, 2023 and 2022 (unaudited and in thousands):

The following table sets forth our financial data of the Intermodal segment for the years ended December 31, 2024 and 2023:

(Unaudited and in Thousands)

December 31, 2024 Percent of Revenue December 31, 2023 Percent of Revenue Change Percent Change

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Operating Revenues

Intermodal operating revenue decreased $145,675, or 34.7%, to $274,043 for the year ended December 31, 2023, from $419,718 for the same period in 2022.

Intermodal operating revenue decreased $41,211, or 15.0%, to $232,832 for the year ended December 31, 2024, from $274,043 for th e same period in 2023.

The decrease in operating revenues was primarily attributable to a 7.6% decrease in drayage shipments and an 9.1% decrease in drayage revenue per shipment over the same period in 2023.

The decrease in drayage shipments and corresponding lower accessorial revenue to support customer needs was primarily due to the challenged market conditions that led to decreased customer demand for our services for the year ended December 31, 2023 compared to the same period in 2022.

In addition, fuel surcharge revenue decreased $17,876 or 33.4% over the same period, as a result of the decline in the average price of fuel.

The decrease in drayage shipments and lower accessorial revenue to support customers was primarily due to challenged market demand for our services driven by an extended weak freight environment for the year ended December 31, 2024 compared to the same period in 2023.

In addition, fuel surcharge revenue decreased $ 5,600 or 15.7% over the same period, as a result of the decline in the average price of fuel and a decrease in shipment volume.

Purchased Transportation

2 unchanged sentences

Intermodal purchased transportation includes Leased Capacity Providers, third-party motor carriers, while expenses for Company-employed drivers are included in salaries, wages and employee benefits.

The decrease in purchased transportation expense was primarily due to fewer drayage shipments and the change in the mix of freight capacity purchased from Leased Capacity Providers and third-party motor carriers compared to the same period in 2022.

The decrease in purch ased transportation expense was primarily due to fewer drayage shipments and the change in the mix of freight capacity purchased from Leased Capacity Providers and third-party motor carriers compared to the same period in 2023.

Salaries, Wages, and Employee Benefits

1 unchanged sentence

Salaries, wages and employee benefits were 25.2% of Intermodal operating revenue for the year ended December 31, 2024 compared to 24.4% for the same period in 2023.

The decrease in salaries, wages and employee benefits expense was primarily due to a decrease in the reserve for incentive compensation and fewer Company-employed drivers in response to lower volumes, partially offset by higher salaries and wages as compared to the same period in 2022.

The decrease in salaries, wages and employee benefits expense was primarily due to fewer Company-employed drivers in response to lower volumes as compared to the same period in 2023.

Operating Leases

Intermodal operating leases decreased $6,265, or 19.6%, to $25,685 for the year ended December 31, 2023, from $31,950 for the same period in 2022.

Intermodal operating leases decrease $4,086, or 15.9%, to $21,599 for the year ended December 31, 2024, from $25,685 for the same period in 2023.

Operating leases were 9.3% of Intermodal operating revenue for the year ended December 31, 2024 compared to 9.4% in the same period in 2023.

The decrease in operating leases expense was primarily due to lower equipment expense incurred to support the decreased accessorial revenues for the year ended December 31, 2023 compared to the same period in 2022.

The decrease in operating leases expense was primarily due to reduced equipment rental expense incurred to support lower demand for the year ended December 31, 2024 compared to the same period in 2023.

Depreciation and Amortization

Intermodal depreciation and amortization increased $4,598, or 29.9%, to $19,991 for the year ended December 31, 2023, from $15,393 for the same period in 2022.

Intermodal depreciation and amortization decreased $1,551, or 7.8%, to $18,440 for the year ended December 31, 2024, from $19,991 for the same period in 2023.

Depreciation and amortization expense as a percentage of Intermodal operating revenue was 7.9% for the year ended December 31, 2024 compared to 7.3% for the same period in 2023.

The increase in depreciation and amortization expense was primarily due to the additional depreciation and amortization expense as a result of the equipment and intangible assets acquired in connection with the acquisitions completed in 2022.

Insurance and Claims

Intermodal insurance and claims expense increased $1,233, or 13.6%, to $10,320 for the year ended December 31, 2023 from $9,087 for the same period in 2022.

Insurance and claims were 3.8% of Intermodal operating revenue for the year ended December 31, 2023 compared to 2.2% for the same period in 2022.

The increase in insurance and claims expense was primarily due to an increase in vehicle liability and equipment repair claims for the year ended December 31, 2023 compared to the same period in 2022.

See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations ” section below.

The decrease in depreciation and amortization expense was primarily due to minimal new asset additions during the period and some equipment disposals and assets having reached their full depreciable lives.

Intermodal fuel expense decreased $2,543, or 22.9%, to $8,578 for the year ended December 31, 2024 from $11,121 for the same period in 2023.

Fuel expense was 3.7% of Intermodal operating revenue for the year ended December 31, 2024 compared to 4.1% for the same period in 2023.

Intermodal fuel expense decreased due to fewer miles driven by Company-employed drivers and the decrease in the average price of fuel during the year ended December 31, 2023 compared to the same period in 2022.

Intermodal fuel expense decreased due to less shipments, fewer miles driven by Company-employed drivers and a decrease in the average price of fuel during the year ended December 31, 2024 compared to the same period in 2023.

Other Operating Expenses

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Other operating expenses include contract labor, equipment maintenance, facility expenses, legal and professional fees and accessorial storage costs.

The decrease in other operating expenses was driven by lower accessorial storage costs incurred as a result of decreased accessorial revenues, maintenance and repair expense, tolls and professional fees, partially offset by higher contract labor, software license and subscription fees and warehouse supplies for the year ended December 31, 2023 compared to the same period in 2022.

The decrease in other operating expenses was primarily driven by lower accessorial storage costs incurred to support the decreased accessorial revenues for the year ended December 31, 2024 compared to the same period in 2023.

Income from Operations

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Income from operations as a percentage of Intermodal operating revenue was 8.1% for the year ended December 31, 2024 compared to 9.2% in the same period in 2023.

The decrease in income from operations as a percentage of operating revenue was driven by lower drayage revenue per shipment on fewer drayage shipments, partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third-party motor carriers and Company-employed drivers.

The 15.0% decrease in income from operations as a percentage of operating revenues was driven by 7.6% fewer drayage shipments and 1.1% highe r overall operating expenses as a percentage of revenue.

Other operations - Year Ended December 31, 2024 compared to Year Ended December 31, 2023

Other operating activity included a $53,157 operating loss for the year ended December 31, 2023 compared to a $1,866 operating loss for the same period in 2022.

The change in the operating loss was primarily driven by $57,490 of professional fees incurred for due diligence, transaction and integration costs incurred in connection with the acquisition of Omni, an increase in the reserves for group health insurance claims, an increase in the reserves for workers compensation claims and an increase in the reserves for vehicle liability claims, partially offset by the reversal of an accrual for an incentive program established for certain employees in 2021.

The increase in the self-insurance reserve for vehicle liability claims was due to the unfavorable loss development factor of historical claims.

Other operations resulted in a $105,009 operating loss for the year ended December 31, 2024 compared to a $53,157 operating loss for the same period in 2023.

The change in the operating loss was primarily driven by $81,467 of post-acquisition transaction and integration costs incurred in connection with the Omni Acquisition.

Critical Accounting Policies and Estimates

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Self-Insurance Loss Reserves

We provide for the estimated costs of self-insurance loss reserves, which includes vehicle liability, and workers’ compensation claims;

for both reported and for claims incurred but not reported.

We provide for the estimated costs of self-insurance loss reserves, which includes both reported and unreported vehicle liability, and workers’ compensation claims.

The amount of self-insurance loss reserves and loss adjustment expenses is determined based on an estimation process that requires us to make significant judgments and use information obtained from both our specific and industry data, as well as general economic information.

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A failure to appropriately assign a fair value to acquired assets and assumed liabilities could significantly impact the amount and timing of future depreciation and amortization expense, as well as significantly overstate or understate assets or liabilities.

Goodwill is recorded at cost based on the excess of purchase price over the estimated fair value of net assets acquired.

Goodwill is not amortized but rather evaluated annually or more frequently if circumstances indicate possible impairment, as of June 30 for impairment using a qualitative assessment or quantitative one-step assessment.

Examples of such events or circumstances that could indicate a possible impairment may include a significant change in business climate or a loss of significant customers.

Intangible assets are amortized over their estimated useful lives.

The annual test of goodwill was performed for each of the reporting units with goodwill balances as of June 30, 2024.

As a result of the annual test, we recorded goodwill impairment charges totaling $ 1,028,397 which all relates to our Omni reporting unit.

This reporting unit was acquired on January 25, 2024.

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 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 $ 1,028,397 during the three and six months ended June 30, 2024.

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

To complete the Omni goodwill test, we determined the fair value of the reporting unit using the DCF model and a guideline public company approach with 50% of the value determined using the DCF and 50% of the value using the market approach.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

Purchase price allocation of Omni is not yet complete, and as a result, there can be no assurance that there will not be a material impairment charge in the future.

Finite-Lived Intangible Assets and Other Long-Lived Assets

The Company reviews its long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The evaluation for recoverability is performed at a level where independent cash flows may be attributed to either an asset or asset group.

The analysis differs from our goodwill impairment test in that an intangible or other long-lived asset is only deemed to have occurred if the sum of the forecasted undiscounted cash flows related to the assets being evaluated is less than the carrying value of the assets.

If the forecasted net cash flows are less than the carrying value, then the assets are written down to estimated value.

We did not identify any impairments of definite-lived assets in the three and six months ended June 30, 2024 and 2023.

Changes in the estimates of forecasted net cash flows may result in future asset impairments that could be material to our results of operations.

Tax Receivable Agreement

The Company and Opco entered into the Tax Receivable Agreement with Omni Holders and certain other parties (collectively, the “TRA Holders”).

Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to the Omni Holders 83.5% of certain of the Company’s realized (or in certain cases deemed realized) tax savings as a result of certain tax benefits related to the transactions contemplated by the Purchase & Sale Agreement and Taxes Receivable Agreement, and future exchanges of Opco Class B Units for our common stock or cash.

The actual tax benefit, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending on a number of factors, including the price of the common stock at the time of the exchange;

the timing of future exchanges;

the extent to which exchanges are taxable;

the amount and timing of the utilization of tax attributes;

the amount, timing and character of the Company’s income;

federal, state and local tax rates then applicable;

the depreciation and amortization periods that apply to the increases in tax basis;

the timing and amount of any earlier payments that the Company may have made under the Tax Receivable Agreement;

and the portion of the Company’s payments under the Tax Receivable Agreement that constitute imputed interest or give rise to depreciable or amortizable tax basis

The Company accounts for the effects of these increases in tax basis and associated payments under the Tax Receivable Agreement if and when exchanges occur as follows:

recognizes a contingent liability for the Tax Receivable Agreement obligation when it is deemed probable and estimable, with a corresponding adjustment to additional paid-in-capital, based on the estimate of the aggregate amount that the Company will pay;

records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange;

to the extent the Company estimates that the full benefit represented by the deferred tax asset will not be fully realized based on an analysis that will consider, among other things, the expectation of future earnings, the Company reduces the deferred tax asset with a valuation allowance;

the effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in the Company’s net loss.

A Tax Receivable Agreement liability is determined and recorded under ASC 450, “Contingencies”, as a contingent liability;

therefore, the Company is required to evaluate whether the liability is both probable and the amount can be estimated.

The Tax Receivable Agreement liability is payable upon cash tax savings and as of the balance sheet date the Company has not determined that positive future taxable income is probable under ASC 740, “Financial Reporting for Income Taxes” and has reduced its deferred tax assets generated with a valuation allowance, based on the Company’s three-year cumulative loss position, the expected income generated from existing tax deferred liabilities, tax planning, and other factors.

As such, the Company has not recorded additional Tax Receivable Agreement liability as of December 31, 2024 related to items generated after the opening balance sheet date to be consistent under both ASC 450 & ASC 740.

The Company will evaluate this on a quarterly basis which may result in an adjustment in the future.”

Year Ended December 31, 2023 compared to Year Ended December 31, 2022

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For discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 refer to Part I, Item 7 of our annual report on form 10-K filed with SEC on March 15, 2024.

We have historically financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under our Credit Facility (as defined below).

We believe that borrowings under our Revolving Credit Facility (defined below) and our New Term Loans (defined below), together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future.

We have financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under our Revolving Credit Facility.

On December 30, 2024, Opco, a subsidiary of the Company, the revolving lenders party thereto and Citibank, N.A., as administrative agent and collateral agent, entered into Amendment No.

3 (“Amendment No.

3”) to the Credit Agreement, dated as of December 19, 2023 (as amended, supplemented or otherwise modified prior to the date of Amendment No.

3, the “Credit Agreement”).

As previously disclosed and more fully described below and in Note 3, Acquisitions , to the Consolidated Financial Statements, we incurred significant indebtedness in connection with the Omni Acquisition.

This substantial level of debt could have important consequences to our business, including, but not limited to the factors as more fully discussed in Item 1A, “Risk Factors” - “Risks Relating to our Indebtedness”.

Credit Facility

To further support liquidity and cash reserves, in December 2021, we entered into a third amendment to our credit facility (the “Credit Facility”), which increased the amount available for borrowing to $450,000, consisting of a $300,000 revolving line of credit and a term loan of $150,000.

The amendment established annual mandatory repayment of the principal amount of the term loan of:

1.0% per annum in 2022 and 2023;

2.5% per annum in 2024 and 2025;

5.0% per annum in 2026;

with the remaining unpaid principal being due on July 20, 2026.

As of December 31, 2023, we repaid all long-term debt associated with the Credit Facility.

The Credit Facility was extinguished in tandem with the closing of the transactions contemplated by the Omni Acquisition.

Refer to Note 4, Indebtedness, to our Consolidated Financial Statements for additional information regarding our Credit Facility.

Senior Secured Notes

In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Bondco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Issuer”) launched a private offering of $725,000 aggregate principal amount of its 9.5% senior secured notes due 2031 (the “Notes”), in a transaction exempt from registration under the Securities Act.

In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Bondco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Issuer” and consolidated VIE) launched a private offering of $725,000 aggregate principal amount of its 9.5% senior secured notes due 2031 (the “Notes”), in a transaction exempt from registration under the Securities Act.

Upon the closing of the Omni Acquisition, Opco assumed the Escrow Issuer's obligations under the Notes.

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In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Loanco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Loan Borrower”), entered into a credit agreement (the “Credit Agreement”) with Citibank, N.A., as administrative agent and collateral agent and as initial term loan lender.

Pursuant to the Credit Agreement, the Escrow Loan Borrower obtained senior secured term B loans in an aggregate principal amount of $1,125,000 (the “New Term Loans”) and the ability to draw down up to $400,000 under a line of credit (the “Revolving Credit Facility”).

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.

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The Revolving Credit Facility will mature on January 25, 2029.

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.

Lo ans 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%.

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.

Upon the closing of the Omni Acquisition, Opco assumed the Escrow Loan Borrower’s obligations under the Credit Agreement, which were further secured by certain guarantors.

Upon the closing of the Omni Acquisition, Opc o assumed the Escrow Loan Borrower’s obligations under the Credit Agreement, which were further secured by certain guarantors.

Opco’s obligations under the Credit Agreement are guaranteed on a senior secured basis by us and each of Opco’s existing and future domestic subsidiaries (subject to customary exceptions).

On January 25, 2024, the date of the Omni Acquisition, both GN Bondco, LLC and GN Loanco, LLC ceased operations and their debt and related funds were transferred to Opco, a consolidated subsidiary of us.

On February 12, 2024, Opco and the parties to the Credit Agreement entered into Amendment No.

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2 on February 12, 2024, Opco repaid $80,000 aggregate principal amount of the New Term Loans outstanding under the Credit Agreement, together with all accrued and unpaid interest thereon.

On December 30, 2024, Opco and the parties to the Credit Agreement entered into Amendment No.

3 (“Amendment No.

3”) to the Credit Agreement, which (a) modifies the financial performance covenant in the Credit Agreement by temporarily increasing the 5.50:1.00 maximum consolidated first lien net leverage ratio permitted by the covenant to (i) 6.75:1.00 (for the first, second and third quarters of 2025), (ii) 6.50:1.00 (for the fourth quarter of 2025), (iii) 6.25:1.00 (for the first quarter of 2026), (iv) 6.00:1.00 (for the second quarter of 2026), (v) 5.75:1.00 (for the third quarter of 2026), (vi) 5.50:1.00 (for the third quarter of 2026 and thereafter) and (b) reduces the revolving credit commitments available under the Credit Agreement from an aggregate principal amount of $340,000 to an aggregate principal amount of $300,000.

Amendment No.

3 also amends certain other terms of the Credit Agreement in connection with the foregoing.

Both the Notes and Revolving Credit Facility contain covenants that, among other things, restrict the ability of us, without the approval of the required lenders, to engage in certain mergers, consolidations, asset sales, dividends and stock repurchases, investments, and other transactions or to incur liens or indebtedness in excess of agreed thresholds, as set forth in the credit agreement.

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Tax Receivable Agreement

In connection with the Omni Acquisition, we, Opco, Omni Holders and certain other parties entered into a tax receivable agreement (the “Tax Receivable Agreement”), which sets forth the agreement among the parties regarding the sharing of certain tax benefits realized by us as a result of the Omni Acquisition.

In connection with the Omni Acquisition, we, Opco, Omni Holders and certain other parties entered into the Tax Receivable Agreement, which sets forth the agreement among the parties regarding the sharing of certain tax benefits realized by us as a result of the Omni Acquisition.

Pursuant to the Tax Receivable Agreement, we are generally obligated to pay certain Omni Holders 83.5% of (a) the total tax benefit that we realize 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 us (or cash) pursuant to Opco’s operating agreement that became effective as of the Closing, (b) certain pre-existing tax attributes of certain Omni Holders that are corporate entities for tax purposes, (c) the tax benefits that we realize 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.

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Continuing Operations

Net cash provided by operating activities of continuing operations was $199,212 for the year ended December 31, 2023 compared to $250,161 for the year ended December 31, 2022.

The decrease in net cash provided by operating activities of continuing operations was primarily due to the decrease in net income from continuing operations after consideration of non-cash items, partially offset by the change in accounts receivable and other current and noncurrent assets.

The accounts receivable balance changed due to the decrease in operating revenue in 2023.

Other current and noncurrent assets balance changed due to the increase in income taxes payable, partially offset by an increase in interest income receivable and prepaid professional fees in 2023.

Net cash used in investing activities of continuing operations was $83,687 for the year ended December 31, 2023 compared to $102,987 during the year ended December 31, 2022.

Net cash used in operating activities of continuing operations was $69,015 for the year ended December 31, 2024 compared to cash provided from operations of $199,212 for the year ended December 31, 2023.

The decrease in net cash provided by operating activities of continuing operations was primarily due to the decrease in net income from continuing operations after consideration of non-cash items, additionally changes in net working capital in 2024 were unfavorable to similar changes during 2023.

Net cash used in investing activities of continuing operations was $1,608,586 for the year ended December 31, 2024 compared to cash provided of $83,687 during the year ended December 31, 2023.

Investing activities of continuing operations for the year ended December 31, 2024 included the acquisition of Omni for a purchase price of $ 1,576,219, while investing activities for the year ended December 31, 2023 included the acquisition of Land Air for a purchase price of $ 56,703.

Capital expenditures for the year ended December 31, 2024 were $37,060, which primarily related to the purchase of technology and operating equipment.

Capital expenditures for the year ended December 31, 2023 were $30,725, which primarily related to the investment in the expansion of our national hub in Columbus, Ohio and the purchase of technology and operating equipment.

Investing activities of continuing operations for the year ended December 31, 2023 included the acquisition of Land Air for a purchase price of $56,567, while investing activities for the year ended December 31, 2022 included the acquisition of Edgmon for a purchase price of $40,433 and Chickasaw Container Services, Inc.

for a purchase price of $25,733.

Net cash provided by financing activities of continuing operations was $1,790,726 for the year ended December 31, 2023 compared to net cash used in financing activities of continuing operations of $138,668 for the year ended December 31, 2022.

The change in the net cash provided by financing activities of continuing operations was primarily due to the proceeds from long-term debt held in escrow and the increased contributions from a subsidiary held for sale, partially offset by the net repayment of the borrowings outstanding under our Credit Facility and increased repurchases and retirement of common stock.

Discontinued Operation

Net cash used in discontinued operating activities was $17,824 for the year ended December 31, 2023 compared to the cash provided by discontinued operating activities of $8,929 for the year ended December 31, 2022.

The change in net cash used in operating activities of discontinued operation was primarily related to the decrease in net income of discontinued operations after consideration of non-cash items.

The sale of Final Mile was completed on December 20, 2023.

Net cash provided by discontinued investing activities was $258,525 for the year ended December 31, 2023 compared to net cash used in discontinued investing activities was $1,475 during the year ended December 31, 2022.

The change in net cash provided by discontinued investing activities was due to the proceeds received from the sale of the Final Mile business in 2023.

The sale of Final Mile was completed on December 20, 2023.

Net cash used in financing activities of discontinued operation was $240,701 for the year ended December 31, 2023 compared to $7,454 for the year ended December 31, 2022.

The change in the net cash used in financing activities of discontinued operations was due to increased contributions to the parent.

Net cash used in financing activities of continuing operations was $163,832 for the year ended December 31, 2024 compared to net cash provided by financing activities of continuing operations of $1,790,726 for the year ended December 31, 2023.

The change in the net cash provided by financing activities of continuing operations was primarily due proceeds from long-term debt in 2023 used to fund the Omni Acquisition in 2024, with net paydown of debt balances in 2024.

Share Repurchase Program

During the year ended December 31, 2023 and 2022, we repurchased 883 and 600 shares of our common stock, respectively, for approximately $93,811 and $62,771, respectively, through open market transactions.

During the year ended December 31, 2024, we did not repurchase any shares.

For the year ended December 31, 2023, a total of 883 shares of our common stock were repurchased for an approximate total of $93,811, through open market transactions.

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

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-K

Item 7. Management’s Discussion and Analysis