What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-08 · 147 added, 484 removed, 184 unchanged (77% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

We are a leading asset-light freight provider of transportation services, including LTL, truckload and intermodal drayage services and freight brokerage and supply chain services across North and South America, Europe, and Asia.

We are a leading asset-light freight provider of transportation services, including LTL, truckload and intermodal drayage services across the United States and in Canada and Mexico.

We offer premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling.

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

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, Intermodal and Omni Logistics.

Expedited Freight, Omni Logistics and Intermodal.

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

Expedited Freight also offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.

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

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

Intermodal also offers dedicated contract and CFS warehouse and handling services, and in select locations, linehaul and LTL services.

We plan to grow our Intermodal geographic footprint through acquisitions as well as through greenfield start-ups where no suitable acquisition is available.

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.

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

Intermodal also offers dedicated contract and CFS warehouse and handling services, and in select locations, linehaul and LTL services.

Our operations, particularly our network of hubs and terminals, represent substantial fixed costs.

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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 Logistics 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.

Within our Expedited Freight reportable segment, our primary revenue focus is to increase density, which is shipment and tonnage growth within our existing LTL network.

As we continue to integrate the Omni and Forward businesses, we are also developing how we organize and manage our product offerings.

While we continue to manage the business by our disclosed segments below, we have information available to estimate revenue for key product groups for the period ended December 31, 2024.

Estimated revenue for ground transportation, air & ocean forwarding, intermodal drayage, and warehousing/value-added service approximated 70%, 12%, 9%

and 9%, respectively during 2024.

Within our Expedited Freight reportable segment, our primary revenue focus is to optimize density, which is to obtain appropriate pricing of our services that allows for profitable shipments and tonnage growth within our existing LTL network.

Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations including linehaul load factor and door pounds handled per hour.

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We believe our yield management process focused on account level profitability, and ongoing improvements in operating efficiencies, are both key components of our ability to grow profitably.

The key operating statistics necessary to understand the operating results of our Expedited Freight reportable segment are described below in more detail:

The key operating statistics necessary to understand the operating results of our Expedited Fright reportable segment are described below in more detail:

Tonnage - Total weight of shipments in pounds.

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

International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, laws and policies relating to tariffs, trade restrictions and foreign investment.

Periodically, governments consider a variety of changes to tariffs and impose trade restrictions.

We cannot predict the outcome of changes in tariffs, or interpretations, and trade restrictions and the effects they will have on our business.

Doing business in foreign locations also subjects us to a variety of risks and considerations not normally encountered by domestic enterprises.

In addition to being influenced by governmental policies, our business may also be negatively affected by political developments and changes in government personnel or policies in the United States and other countries, as well as economic turbulence, political unrest and security concerns in the nations and on the trade shipping lanes in which we conduct business and the future impact that these events may have on international trade.

Our ability to provide services to our customers is highly dependent on good working relationships with a variety of entities, including airlines, ocean carrier lines and ground transportation providers.

We consider our current working relationships with these entities strong and beneficial to the Company.

However, changes in the financial stability and operating capabilities and capacity of asset-based carriers, capacity allotments available from carriers could affect our business in unpredictable ways.

When the market experiences seasonal peaks or any sort of disruption, the carriers often increase their pricing suddenly.

This carrier behavior creates pricing volatility that could impact our ability to maintain historical profitability.

The global economic and trade environments remain uncertain, including inflation remaining higher than historical levels, greater volatility in oil prices and high interest rates.

Starting in the second quarter of 2022 and continuing through most of 2023, we saw a slowdown in the global economy and a softening of customer demand resulting in declines in rates.

As demand remains soft, available transportation capacity continues to exceed demand.

These conditions have continued to impact our rates negatively in 2024.

We also expect that pricing volatility will continue as carriers adapt to lower demand, changing fuel prices, security risks and react to governmental trade policies and other regulations.

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

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.

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

Department of Energy and our fuel surcharge table.

In periods of changing fuel prices, our fuel surcharges vary by different degrees and may not fully offset fuel price fluctuations or may result in higher than expected increases in revenue.

Fuel shortages, changes in fuel prices, and the potential volatility in fuel surcharge revenue may impact our results of operations and overall profitability.

Fuel surcharge revenue as a percentage of operating revenues decreased to 9.2% for the quarter ended September 30, 2024 compared to 19.6% for the quarter ended September 30, 2023 as a result of the inclusion of Omni in the results for the quarter ended September 30, 2024 .

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).

Industry freight volumes, as measured by the Cass Freight Index, decreased in first quarter of 2025 compared to the comparable period in 2024.

Recent global disruptions, including changes to tariff rates, as described below, have had an impact on freight demand, which has led to an overall continued decrease in total number of shipments.

Such disruptions are expected to continue with a resolution timeline remaining unclear.

Intermodal volumes, heavily influenced by United States imports, have increased due to a number of factors that impact import levels.

For Truckload, capacity levels relative to demand has created a sustained market of depressed spot market truckload rates.

Amid broader volatility in the global economy, the U.S.

government has recently imposed significant widespread baseline and country-specific tariffs on imported goods from China, Canada, and other countries.

While the implementation of certain country-specific tariffs with most countries has been delayed as negotiations progress, the tariffs imposed on China remain, and China has imposed reciprocal tariffs in response.

While the ultimate impact of tariff policy changes remains unclear, the Company is actively monitoring these developments and remains committed to taking appropriate measures to maintain its competitiveness and adapt to changing economic conditions.

However, global equity market values, including the Company’s common stock, have been under pressure subsequent to the end of our first quarter of 2025 by these changing economic conditions, but not at a level where the Company considers indicators of impairment to exist at any of our reporting units.

Such conditions could in the future cause continued decreases in the market value of the Company’s common stock and create risk and uncertainties in the carrying value of our reporting units, which may lead to goodwill being impaired when we perform our annual impairment test during the second quarter of 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.

Factors Affecting Comparability

See Note 2, Acquisitions, to our Condensed Consolidated Financial Statements for more information about our acquisitions.

Omni Logistics revenues and segment income from January 25, 2024 through September 30, 2024 are included in our condensed consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2024.

The changes in our results of operations for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023 are primarily driven by the inclusion of the results of operations of Omni Logistics.

The following table sets forth the financial data of our Omni Logistics segment for the three and nine months ended September 30, 2024 (unaudited and in thousands):

Three Months Ended

September 30, 2024 Percent of Revenue

Operating revenue $ 334,538 100.0 %

Operating expenses:

Purchased transportation 194,853 58.2

Salaries, wages and employee benefits 55,151 16.5

Operating leases 27,586 8.2

Depreciation and amortization 10,830 3.2

Insurance and claims 3,488 1.0

Fuel expense 800 0.2

Other operating expenses 25,943 7.8

Impairment of goodwill 14,751 4.4

Total operating expenses 333,402 99.7

Income from operations $ 1,136 0.3 %

Nine Months Ended

September 30, 2024 Percent of Revenue

Operating revenue $ 871,232 100.0 %

Operating expenses:

Purchased transportation 517,951 59.5

Salaries, wages and employee benefits 161,462 18.5

Operating leases 73,464 8.4

Depreciation and amortization 60,937 7.0

Insurance and claims 8,386 1.0

Fuel expense 2,286 0.3

Other operating expenses 72,604 8.3

Impairment of goodwill 1,107,465 127.2

Total operating expenses 2,004,555 230.1

Loss from operations $ (1,133,323) (130.1) %

Omni Logistics revenues and segment loss from January 25, 2024 through March 31, 2024 are included in our condensed consolidated statements of comprehensive loss for the three months ended March 31, 2024.

The changes in our results of operations for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 are primarily driven by fewer days of ownership of Omni in the prior year period as compared to the current year period.

Results from Operations

The following table sets forth our consolidated financial data for the three months ended September 30, 2024 and 2023 (unaudited and in thousands):

The following table sets forth our consolidated financial data for the three months ended March 31, 2025 and 2024 (unaudited and in thousands):

Three Months Ended

September 30, 2024 September 30, 2023 Change Percent Change

March 31, 2025 March 31, 2024 Change Percent Change

Operating revenues:

Expedited Freight $ 249,381 $ 273,295 $ (23,914) (8.8) %

Intermodal 57,412 62,183 (4,771) (7.7)

Omni Logistics 323,470 224,838 98,632 43.9

Eliminations and other operations (20,720) (82) (20,638) NM

Intermodal 62,492 56,292 6,200 11.0

Corporate 142 — 142 —

Eliminations and other operations (22,204) (12,612) (9,592) (76.1)

Operating revenues 613,281 541,813 71,468 13.2

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Other operating expenses 55,533 112,947 (57,414) (50.8)

Impairment of goodwill 14,751 — 14,751 —

Total operating expenses 608,518 607,545 973 0.2

Income (loss) from continuing operations:

Income (loss) from operations:

Expedited Freight 15,634 19,498 (3,864) (19.8)

Intermodal 4,091 4,744 (653) (13.8)

Omni Logistics 3,375 (28,585) 31,960 111.8

Intermodal 5,542 3,586 1,956 54.5

Other Operations (19,788) (60,231) 40,443 67.1

Income from continuing operations 22,697 11,689 11,008 94.2

Income (loss) from operations 4,763 (65,732) 70,495 107.2

Other income and expenses:

Interest expense, net (45,547) (40,753) 4,794 11.8

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

Other income (expense), net (11) — (11) —

Foreign exchange loss (922) (668) 254 38.0

Other income, net 104 9 95 1,055.6

Total other expense (46,365) (41,412) 4,953 12.0

(Loss) income before income taxes (32,896) 9,034 (41,930) (464.1)

Net loss before income taxes (41,602) (107,144) 65,542 61.2

Income tax (benefit) expense 19,589 (18,350) 37,939 206.8

Net (loss) income from continuing operations (34,198) 6,493 (40,691) (626.7)

(Loss) income from discontinued operation, net of tax (1,137) 2,795 (3,932) (140.7)

Net (loss) income (35,335) 9,288 (44,623) (480.4)

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

Net (loss) income attributable to Forward Air $ (73,408) $ 9,288 $ (82,696) (890.4) %

NM=Not Meaningful

Net loss (61,191) (88,794) 27,603 31.1

Net loss attributable to non-controlling interest (10,554) (27,082) 16,528 61.0

Net loss attributable to Forward Air $ (50,637) $ (61,712) $ 11,075 17.9 %

Operating Revenues

Operating revenues increased $314,961, or 92.4%, to $655,937 for the three months ended September 30, 2024 compared to $340,976 for the three months ended September 30, 2023.

The increase was primarily due to the inclusion of $334,538 from the Omni Logistics segment and an increase in our Expedited Freight segment of $5,832 due to increased Truckload revenue, offset by a decrease from our Intermodal segment of $4,771.

Operating revenues increased $71,468, or 13.2%, to $613,281 for the three months ended March 31, 2025 compared to $541,813 for the three months ended March 31, 2024.

The increase was primarily due to an increase of $98,632 from the Omni Logistics segment due to the extra twenty-four days included in 2025 as compared to 2024.

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

Operating Expenses

Operating expenses increased $303,953, or 92.3%, to $633,240 for the three months ended September 30, 2024 compared to $329,287 for the three months ended September 30, 2023.

The increase was primarily due to the inclusion of the $333,402 of operating expenses from the Omni Logistics segment and a $19,110 increase in operating expenses from the Expedited Freight segment due to margin compression, partially offset by a $4,118 volume driven decrease in operating expenses from the Intermodal segment.

Purchased transportation expense, given our asset-light model, is our largest expense which includes our independent contractor fleet owners and owner-operators, who lease their equipment to our motor carriers (“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.

Income from Continuing Operations and Segment Operations

Income from operations decreased $11,008, or 94.2%, to a $22,697 loss for the three months ended September 30, 2024 compared to a $11,689 of income for the three months ended September 30, 2023.

The decrease was primarily due to a decrease in Omni Logistics segment of $1,136, and Expedited Freight segment of $13,278.

Operating expenses increased $973, or 0.2%, to $608,518 for the three months ended March 31, 2025 compared to $607,545 for the three months ended March 31, 2024.

The increase was primarily due to an increase of $66,672 from the Omni Logistics segment due to the extra twenty-four days included in 2025 as compared to 2024, mostly offset by decreases in acquisitions and integration transaction costs associated with the Omni Acquisition as well as decreases in our Expedited Freight segment.

Income (Loss) from Operations and Segment Operations

Income from operations increased $70,495, or 107.2%, to $4,763 of income for the three months ended March 31, 2025 compared to $65,732 of loss for the three months ended March 31, 2024.

The increase was primarily due to increased operating revenues with minimal increase associated with operating expenses as noted above.

Interest Expense, net

Interest expense, net was $52,770 for the three months ended September 30, 2024 compared to $2,655 for the three months ended September 30, 2023.

The increase in interest expense was primarily due to higher borrowings outstanding during the third quarter of 2024 as compared to the same period in 2023 and an increase in the average interest rate.

In connection with the Omni Acquisition, the outstanding borrowings remained steady in the third quarter of 2024.

The weighted-average interest rate on the outstanding borrowings were 9.56% and 6.62% during the three months ended September 30, 2024 and 2023, respectively.

Income Taxes on a Continuing Basis

The effective tax rate for the three months ended September 30, 2024 was (4.0)% compared to 28.1% for the three months ended September 30, 2023.

The effective tax rate varied from the statutory United States federal rate of 21% in the third quarter of 2024 primarily due to the cumulative effect of the noncontrolling interest, and to a lesser extent foreign earnings and state income taxes, net of the federal benefit.

Income from Discontinued Operations, net of Tax

Loss from discontinued operations, net of tax increased $3,932 or 140.7% to net loss of $1,137 for the three months ended September 30, 2024 compared to income of $2,795 for the same period in 2023.

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

Net (Loss) Income

As a result of the foregoing factors, net income decreased $44,623, to a $35,335 loss for the three months ended September 30, 2024 compared to $9,288 income for the three months ended September 30, 2023.

Expedited Freight - Three Months Ended September 30, 2024 compared to Three Months Ended September 30, 2023

The following table sets forth the financial data of our Expedited Freight segment for the three months ended September 30, 2024 and 2023 (unaudited and in thousands):

Interest expense, net was $45,547 for the three months ended March 31, 2025 compared to $40,753 for the three months ended March 31, 2024 due to the Omni acquisition on January 25, 2024.

The effective tax rate for the three months ended March 31, 2025 was (47.1)% compared to 17.1% for the three months ended March 31, 2024.

The effective tax rate for the three months ended March 31, 2025 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of interest expense disallowances under IRC Section 162(j) for which a full valuation allowance is recorded on the deferred tax asset, noncontrolling interest, and state local income taxes.

The effective tax rate for the three months ended March 31, 2024 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of 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.

As a result of the foregoing factors, net loss decreased $27,603, or 31.1%, to $61,191 of loss for the three months ended March 31, 2025 compared to $88,794 of loss for the three months ended March 31, 2024.

Net Loss Attributable to Noncontrolling Interest

Noncontrolling interest in the three months ended March 31, 2025 and 2024 has been allocated based on the requirements of the umbrella partnership C corporation Clue Opco LLC where only foreign taxes are attributable to the noncontrolling interest when distributing the net losses among the partnership interests.

The decrease in net loss attributable to noncontrolling interest for the three months ended March 31, 2025 compared to three months ended March 31, 2024 is being driven by the decrease in net loss and the decreasing number of noncontrolling units outstanding for the respective periods.

Activity during the three months ended March 31, 2024 prior to the Omni transaction did not impact net loss attributable to noncontrolling interest.

Expedited Freight - Three Months Ended March 31, 2025 compared to Three Months Ended March 31, 2024

The following table sets forth the financial data of our Expedited Freight segment for the three months ended March 31, 2025 and 2024 (unaudited and in thousands):

Three Months Ended

September 30, 2024 Percent of Revenue September 30, 2023 Percent of Revenue Change Percent Change

March 31, 2025 Percent of Revenue March 31, 2024 Percent of Revenue Change Percent Change

Operating revenues:

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Three Months Ended

September 30, 2024 September 30, 2023 Percent Change

March 31, 2025 March 31, 2024 Percent Change

Business days 63 64 (1.6) %

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Operating Revenues

Expedited Freight operating revenues increased $5,832, or 2.1%, to $284,707 for the three months ended September 30, 2024 from $278,875 for the three months ended September 30, 2023.

The increase was primarily due to increased Truckload revenue.

Truckload revenue increased $4,835, primarily due to increased customer demand for our services as compared to the same period in 2023.

Network revenue increased due to a 4.0% increase in pounds per day, offset by a 0.5% decrease in revenue per hundredweight excluding fuel as compared to the same period in 2023.

The increase in tonnage reflects an increase in weight per shipment of 4.5% on 0.5% less shipments per day.

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

Fuel surcharge revenue decreased $5,499, or 9.4% as a result of the higher tonnage in our Network as compared to the same period in 2023.

Operating revenues decreased $23,914, or 8.8%, to $249,381 for the three months ended March 31, 2025 from $273,295 for the three months ended March 31, 2024.

Network revenue decreased due to 10.9% lower tonnage and a 12.2% decrease in total shipments as compared to same period in 2024.

These decreases were primarily due to a decreased economic activity in the industry for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Revenue per hundredweight excluding fuel improved by 2.5%, partially offsetting the impacts of decreased tonnage.

Purchased Transportation

Expedited Freight purchased transportation increased $10,185, or 7.8%, to $140,035 for the three months ended September 30, 2024 from $129,850 for the three months ended September 30, 2023.

Purchased transportation was 49.2% of Expedited Freight operating revenues for the three months ended September 30, 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 volumes in Network, and the change in the mix of freight capacity purchased from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers for Truckload services.

For the three months ended September 30, 2024, 63.5%, 33.1% and 3.4% 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.

This compares to 62.4%, 32.5% and 5.1%, respectively, in the same period in 2023.

Purchased transportation decreased $7,080, or 5.5%, to $120,680 for the three months ended March 31, 2025 from $127,760 for the three months ended March 31, 2024.

Purchased transportation was 48.4% of Expedited Freight operating revenues for the three months ended March 31, 2025 compared to 46.7% for the same period in 2024.

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

The decrease in purchased transportation was primarily due to decreased shipments for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Salaries, Wages and Employee Benefits

Expedited Freight salaries, wages and employee benefits increased $2,744, or 4.8%, to $59,426 for the three months ended September 30, 2024 from $56,682 for the three months ended September 30, 2023.

Salaries, wages and employee benefits were 20.9% of Expedited Freight operating revenues for the three months ended September 30, 2024 compared to 20.3% for the same period in 2023.

The increase in salaries, wages and employee benefits expense was primarily due to higher salaries and wages as compared to the same period in 2023.

Operating Leases

Expedited Freight operating leases increased $1,164, or 8.1%, to $15,556 for the three months ended September 30, 2024 from $14,392 for the three months ended September 30, 2023.

Operating leases were 5.5% of Expedited Freight operating revenues for the three months ended September 30, 2024 compared to 5.2% for the same period in 2023.

The increase in operating lease expense was primarily due to higher leasing costs associated lease renewals in the third quarter of 2024 as compared to the same period in 2023.

Depreciation and Amortization

Expedited Freight depreciation and amortization increased $1,459, or 16.2%, to $10,481 for the three months ended September 30, 2024 from $9,022 for the three months ended September 30, 2023.

Depreciation and amortization was 3.7% of Expedited Freight operating revenues for the three months ended September 30, 2024 compared to 3.2% for the same period in 2023.

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

Insurance and Claims

Expedited Freight insurance and claims increased $2,139, or 22.4%, to $11,672 for the three months ended September 30, 2024 from $9,533 for the three months ended September 30, 2023.

Insurance and claims was 4.1% of Expedited Freight operating revenues for the three months ended September 30, 2024 compared to 3.4% for the same period in 2023.

The increase in insurance and claims expense was primarily due to higher vehicle liability claims in the third quarter of 2024 as compared to the same period in 2023.

Expedited Freight fuel expense decreased $841, or 28.5%, to $2,113 for the three months ended September 30, 2024 from $2,954 for the three months ended September 30, 2023.

Fuel expense was 0.7% of Expedited Freight operating revenues for the three months ended September 30, 2024 compared to 1.1% and for the same period in 2023.

Expedited Freight fuel expense decreased primarily from a 10.6% lower average price of fuel in the third quarter of 2024 as compared to the same period in 2023.

Salaries, wages and employee benefits decreased $9,976, or 15.9%, to $52,577 for the three months ended March 31, 2025 from $62,553 for the three months ended March 31, 2024.

Salaries, wages and employee benefits were 21.1% of operating revenues for the three months ended March 31, 2025 compared to 22.9% for the same period in 2024.

The decrease in salaries, wages and employee benefits expense was primarily due to a decrease in Company-employed drivers and dock workers in response to fewer shipments for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, as well as headcount reductions as a result of acquisition integration synergies.

Other Operating Expenses

Expedited Freight other operating expenses increased $2,260, or 9.5%, to $26,155 for the three months ended September 30, 2024 from $23,895 for the three months ended September 30, 2023.

Other operating expenses were 9.1% of Expedited Freight operating revenues for the three months ended September 30, 2024 compared to 8.5% for the same period in 2023.

Other operating expenses decreased $3,080, or 12.3%, to $21,899 for the three months ended March 31, 2025 from $24,979 for the three months ended March 31, 2024.

Other operating expenses were 8.7% of operating revenues for the three months ended March 31, 2025 compared to 9.2% for the same period in 2024.

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 software license and subscription fees, and utility and communication fees, partially offset by a decrease in supply parts,and professional fees, in the third quarter of 2024 as compared to the same period in 2023.

Income from Operations

Expedited Freight income from operations decreased $13,278, or 40.8%, to $19,269 for the three months ended September 30, 2024 compared to $32,547 for the three months ended September 30, 2023.

Income from operations was 6.8% of Expedited Freight operating revenues for the three months ended September 30, 2024 compared to 11.7% for the same period in 2023.

The change was due primarily from a decrease in revenue per hundredweight without an offsetting decrease in purchased transportation costs for the three months ended September 30, 2024 compared to the same period in 2023.

Intermodal - Three Months Ended September 30, 2024 compared to Three Months Ended September 30, 2023

The following table sets forth the financial data of our Intermodal segment for the three months ended September 30, 2024 and 2023 (unaudited and in thousands):

Three Months Ended

September 30, 2024 Percent of Revenue September 30, 2023 Percent of Revenue Change Percent Change

Operating revenues $ 57,412 100.0 % $ 62,183 100.0 % $ (4,771) (7.7) %

Operating expenses:

Purchased transportation 18,300 31.9 18,945 30.5 (645) (3.4)

Salaries, wages and employee benefits 14,506 25.3 16,118 25.9 (1,612) (10.0)

Operating leases 5,668 9.9 5,144 8.3 524 10.2

Depreciation and amortization 4,582 8.0 5,187 8.3 (605) (11.7)

Insurance and claims 2,528 4.4 2,758 4.4 (230) (8.3)

Fuel expense 1,942 3.4 2,892 4.7 (950) (32.8)

Other operating expenses 5,795 10.0 6,395 10.3 (600) (9.4)

Total operating expenses 53,321 92.9 57,439 92.4 (4,118) (7.2)

The decrease in other operating expenses was primarily due to acquisition integration synergies as well as reduction in shipments for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Income from Operations

Intermodal Operating Statistics

Income from operations decreased $3,864, or 19.8%, to $15,634 for the three months ended March 31, 2025 compared to $19,498 for the three months ended March 31, 2024.

Income from operations was 6.3% of operating revenues for the three months ended March 31, 2025 compared to 7.1% for the same period in 2024.

The decrease in income from operations as a percentage of operating revenues was driven by lower freight volumes which were not fully offset by cost decreases for the three months ended March 31, 2025, as compared to three months ended March 31, 2024.

Omni Logistics - Three Months Ended March 31, 2025 compared to Three Months Ended March 31, 2024

The following table sets forth the financial data of our Omni Logistics for the three months ended March 31, 2025 and 2024 (unaudited and in thousands):

Three Months Ended

September 30, 2024 September 30, 2023 Percent Change

Drayage shipments 62,616 68,576 (8.7) %

Drayage revenue per shipment $ 824 $ 823 0.1 %

Operating Revenues

Intermodal operating revenues decreased $4,771, or 7.7%, to $57,412 for the three months ended September 30, 2024 from $62,183 for the three months ended September 30, 2023.

The decrease in operating revenues was primarily due to a 8.7% decrease in drayage shipments as compared to the same period in 2023.

The decrease in drayage shipments, lower fuel and storage revenue, and lower accessorial revenues to support customers was primarily due to the challenged market conditions that led to decreased customer demand for our services in the third quarter of 2024 as compared to the same period in 2023.

Purchased Transportation

Intermodal purchased transportation decreased $645, or 3.4%, to $18,300 for the three months ended September 30, 2024 from $18,945 for the three months ended September 30, 2023.

Purchased transportation was 31.9% of Intermodal operating revenues for the three months ended September 30, 2024 compared to 30.5% for the same period in 2023.

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

The increase in purchased transportation was primarily due to the change in the mix of freight capacity purchased from Leased Capacity Providers, third-party motor carriers and Company-employed drivers compared to the same period in 2023.

Salaries, Wages and Employee Benefits

Intermodal salaries, wages and employee benefits decreased $1,612, or 10.0%, to $14,506 for the three months ended September 30, 2024 compared to $16,118 for the three months ended September 30, 2023.

Salaries, wages and employee benefits were 25.3% of Intermodal operating revenues for the three months ended September 30, 2024 compared to 25.9% for the same period in 2023.

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

Operating Leases

Intermodal operating leases increased $524, or 10.2%, to $5,668 for the three months ended September 30, 2024 compared to $5,144 for the three months ended September 30, 2023.

Operating leases were 9.9% of Intermodal operating revenues for the three months ended September 30, 2024 compared to 8.3% for the same period in 2023.

The increase in operating lease expense was primarily due to higher leasing costs associated lease renewals in the third quarter of 2024 as compared to the same period in 2023.

Depreciation and Amortization

Intermodal depreciation and amortization decreased $605, or 11.7%, to $4,582 for the three months ended September 30, 2024 from $5,187 for the three months ended September 30, 2023.

Depreciation and amortization was 8.0% of Intermodal operating revenues for the three months ended September 30, 2024 compared to 8.3% for the same period in 2023 .

The decrease in depreciation and amortization expense was primarily due to the lower amount of depreciable equipment.

Intermodal fuel expense decreased $950, or 32.8%, to $1,942 for the three months ended September 30, 2024 from $2,892 for the three months ended September 30, 2023.

Fuel expense was 3.4% of Intermodal operating revenues for the three months ended September 30, 2024 compared to 4.7% for the same period in 2023.

Intermodal fuel expense decreased due to lower volumes and a decrease in the average price of fuel as compared to the same period in 2023.

Other Operating Expenses

Intermodal other operating expenses decreased $600, or 9.4%, to $5,795 for the three months ended September 30, 2024 from $6,395 for the three months ended September 30, 2023.

Other operating expenses were 10.0% of Intermodal operating revenues for the three months ended September 30, 2024 compared to 10.3% for the same period in 2023.

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 primarily due to lower accessorial storage costs incurred as a result of decreased accessorial revenues in the third quarter of 2024 compared to the same period in 2023.

Income from Operations

Intermodal income from operations decreased $653, or 13.8%, to $4,091 for the three months ended September 30, 2024 compared to $4,744 for the three months ended September 30, 2023.

Income from operations was 7.1% of Intermodal operating revenues for the three months ended September 30, 2024 compared to 7.6% for the same period in 2023.

The decrease in income from operations as a percentage of operating revenues was primarily due to higher rents as compared to revenues.

Other Operations - Three Months Ended September 30, 2024 compared to Three Months Ended September 30, 2023

Other operations included a $1,799 operating loss during the three months ended September 30, 2024 compared to $25,602 of operating loss during the three months ended September 30, 2023.

The change in the operating loss was primarily due to $549 of professional fees incurred for transaction and integration costs in the third quarter of 2024 as compared to $22,371 in the third quarter of 2023 which included costs in connection with the Omni Acquisition, higher group health insurance claims, and higher reserves for vehicle liability claims.

Results from Operations

The following table sets forth our consolidated financial data for the nine months ended September 30, 2024 and 2023 (unaudited and in thousands):

Nine Months Ended

September 30, 2024 September 30, 2023 Change Percent Change

Operating revenues:

Expedited Freight $ 849,284 $ 817,888 $ 31,396 3.8 %

Intermodal 173,003 214,603 (41,600) (19.4)

Omni Logistics 871,232 — 871,232 —

Eliminations and other operations (52,103) (184) (51,919) NM

Operating revenues 1,841,416 1,032,307 809,109 78.4

March 31, 2025 Percent of Revenue March 31, 2024 Percent of Revenue Change Percent Change

Operating revenue $ 323,470 100.0 % $ 224,838 100.0 % 98,632 43.9 %

Operating expenses:

6 unchanged sentences

Other operating expenses 24,626 7.6 21,871 9.8 2,755 12.6

Impairment of goodwill 1,107,465 — 1,107,465 —

Total operating expenses 320,095 99.0 253,423 112.7 66,672 26.3

Income (loss) from operations 3,375 1.0 % (28,585) (12.7) % 31,960 111.8 %

Expedited Freight 60,713 89,295 (28,582) (32.0)

Intermodal 12,994 20,259 (7,265) (35.9)

Omni Logistics (1,133,323) — (1,133,323) —

Other Operations (79,175) (24,344) (54,831) NM

(Loss) income from operations (1,138,791) 85,210 (1,224,001) NM

Other expense:

Interest expense, net (140,788) (7,595) (133,193) 1,753.7

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

Other income, net 38 — 38 —

Total other expense (142,662) (7,595) (135,067) 1,778.4

(Loss) income from operations before income taxes (1,281,453) 77,615 (1,359,068) (1,751.0)

Income tax (benefit) expense (191,990) 20,091 (212,081) (1,055.6)

Net income from continuing operations (1,089,463) 57,524 (1,146,987) (1,993.9)

(Loss) income from discontinued operation, net of tax (6,013) 8,083 (14,096) (174.4)

Net (loss) income (1,095,476) 65,607 (1,161,083) (1,769.8)

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

Net (loss) income attributable to Forward Air $ (780,553) $ 65,607 $ (846,160) (1,289.7) %

NM=Not Meaningful

Operating Revenues

Operating revenues increased $809,109, or 78.4% to $1,841,416 for the nine months ended September 30, 2024 compared to $1,032,307 for the nine months ended September 30, 2023.

The increase was primarily due to the inclusion of $871,232 from the Omni Logistics segment and an increase in our Expedited Freight segment revenue of $31,396 due to increased Network revenue, offset by a decrease from our Intermodal segment of $41,600, The results for our reportable segments are discussed in detail in the following sections.

Operating Expenses

Operating expenses increased $2,033,110, or 214.7%, to $2,980,207 for the nine months ended September 30, 2024 compared to $947,097 for the nine months ended September 30, 2023.

The increase was primarily due to the inclusion of the $2,004,555 of operating expenses from the Omni Logistics segment which includes a goodwill impairment charge of $1,107,465 and a $59,978 increase in operating expenses from the Expedited Freight segment, partially offset by a $34,335 decrease in operating expenses from the Intermodal segment.

Loss from Operations and Segment Operations

Loss from operations changed by $1,224,001, to $1,138,791 for the nine months ended September 30, 2024 compared to income of $85,210 for the nine months ended September 30, 2023.

The loss was primarily driven by Omni Logistics segment of $1,133,323 as a result of a goodwill impairment charge of $1,107,465, Other Operations of $54,831, Expedited Freight segment of $28,582, and our Intermodal segment of $7,265.

Interest Expense, net

Interest expense, net was $140,788 for the nine months ended September 30, 2024 compared to $7,595 for the nine months ended September 30, 2023.

The increase in interest expense was due to higher variable interest rates during the nine months ended September 30, 2024 on outstanding debt balances as compared to the same period in 2023.

The weighted-average interest rate on the borrowings under the Revolving Credit Facility was 9.56% and 6.24% during the nine months ended September 30, 2024 and 2023, respectively.

Income Taxes on a Continuing basis

The effective tax rate for the nine months ended September 30, 2024 was 15.0% compared to a rate of 25.9% for the nine months ended September 30, 2023.

The effective tax rate for the current nine months is much lower than historical rate due to the goodwill impairment charge in the current year.

(Loss) Income from Discontinued Operations, net of Tax

Loss from discontinued operations of $6,013, net of tax increased, resulted in an unfavorable change of $14,096 or 174% for the nine months ended September 30, 2024 compared to income of $8,083 during the same period in 2023.

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

Net (Loss) Income

As a result of the foregoing factors, net income decreased $1,161,083, or 1,769.8%, to a loss of $1,095,476 for the nine months ended September 30, 2024 compared to $65,607 income for the nine months ended September 30, 2023.

Expedited Freight - Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023

The following table sets forth the financial data of our Expedited Freight segment for the nine months ended September 30, 2024 and 2023:

Expedited Freight Segment Information

(unaudited and in thousands)

Nine Months Ended

September 30, 2024 Percent of Revenue September 30, 2023 Percent of Revenue Change Percent Change

Operating revenues:

$ 655,116 77.1 % $ 628,670 76.9 % $ 26,446 4.2 %

Truckload 125,368 14.8 120,976 14.8 4,392 3.6

Other 68,800 8.1 68,242 8.3 558 0.8

Total operating revenues 849,284 100.0 817,888 100.0 31,396 3.8

Operating expenses:

Operating revenues increased $98,632, or 43.9%, to $323,470 for the three months ended March 31, 2025 from $224,838 for the three months ended March 31, 2024 mainly due to the increase in ownership days during the current year period, but revenues per day increased during 2025 due to increased demand for our services, specifically increases in contract logistics.

Purchased Transportation

Purchased transportation increased $41,310, or 28.6%, to $185,734 for the three months ended March 31, 2025 from $144,424 for the three months ended March 31, 2024.

Purchased transportation was 57.4% of operating revenues for the three months ended March 31, 2025 compared to 64.2% for the same period in 2024.

Purchased transportation primarily increased mainly due to the increase in ownership days during the current year period, but decreased as a percentage of revenue due to a shift in product mix, which shift in product mix consisted of an increase in contract logistics and value-added services that require lower purchase transportation levels as compared to ground, air and ocean services.

Salaries, Wages and Employee Benefits

Operating leases 45,268 5.3 46,331 5.7 (1,063) (2.3)

Depreciation and amortization 31,463 3.7 25,087 3.1 6,376 25.4

Insurance and claims 33,293 3.9 28,856 3.5 4,437 15.4

Fuel expense 7,128 0.8 7,978 1.0 (850) (10.7)

Salaries, wages and employee benefits increased $8,008 or 16.4%, to $56,783 for the three months ended March 31, 2025 from $48,775 for the three months ended March 31, 2024.

Salaries, wages and employee benefits were 17.6% of operating revenues for the three months ended March 31, 2025 compared to 21.7% for the same period in 2024.

While salaries, wages and employee benefits increased mainly due to the increase in ownership days during the current year period, the rate of increase was lower than the revenue increases at Omni Logistics due to reduced headcount as a result of acquisition integration synergies.

Other Operating Expenses

Total operating expenses 788,571 92.9 728,593 89.1 59,978 8.2

Other operating expenses increased $2,755, or 12.6%, to $24,626 for the three months ended March 31, 2025 from $21,871 for the three months ended March 31, 2024.

Other operating expenses were 7.6% of operating revenues for the three months ended March 31, 2025 compared to 9.8% for the same period in 2024.

While other operating expenses increased mainly due to the increase in ownership days during the current year period, the rate of increase was lower than the revenue increases at Omni Logistics due to acquisition integration synergies.

Income from Operations

1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue.

Expedited Freight Operating Statistics

Nine Months Ended

September 30, 2024 September 30, 2023 Percent Change

Business days 192 191 0.5 %

Total pounds 2,112,126 1,988,713 6.2

Pounds per day 11,001 10,412 5.7

Shipments 1,2

Total shipments 2,529 2,494 1.4

Shipments per day 13.2 13.1 0.8

Weight per shipment 835 798 4.6

Revenue per hundredweight 3

$ 31.03 $ 31.90 (2.7)

Revenue per hundredweight, ex fuel 3

$ 24.21 $ 24.65 (1.8)

Revenue per shipment 3

$ 259.13 $ 254.42 1.9

Revenue per shipment, ex fuel 3

$ 202.16 $ 196.58 2.8

1 In thousands

2 Excludes accessorial and Truckload products

3 Includes intercompany revenue between the Network and Truckload revenue streams

Income from operations increased $31,960 or 111.8%, to $3,375 for the three months ended March 31, 2025 compared to $28,585 of loss for the three months ended March 31, 2024.

The increase in income from operations was mainly due to the increase in ownership days during the current year period and operating expenses having a lower rate of increase relative to the increase in operating revenues due to acquisition integration synergies.

Intermodal - Three Months Ended March 31, 2025 compared to Three Months Ended March 31, 2024

The following table sets forth the financial data of our Intermodal segment for the three months ended March 31, 2025 and 2024 (unaudited and in thousands):

Three Months Ended

March 31, 2025 Percent of Revenue March 31, 2024 Percent of Revenue Change Percent Change

Operating revenues $ 62,492 100.0 % $ 56,292 100.0 % $ 6,200 11.0 %

Expedited Freight operating revenues increased $31,396, or 3.8%, to $849,284 for the nine months ended September 30, 2024 from $817,888 for the nine months ended September 30, 2023.

The increase was driven by increased Network revenue and Truckload revenue.

Network revenue increased due to a 6.2% increase in tonnage, offset by a 1.8% 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 4.6% on 1.4% more shipments.

The increase in shipments is due to higher demand for our services 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.

Truckload revenue increased $4,392, primarily due to increased customer demand for our services as compared to the same period in 2023.

Higher tonnage, higher shipment count, and higher revenue per shipment contributed to the overall increase in operating revenues for the Expedited Freight segment.

Purchased Transportation

Expedited Freight purchased transportation increased $31,141, or 8.2%, to $410,307 for the nine months ended September 30, 2024 from $379,166 for the nine months ended September 30, 2023.

Purchased transportation was 48.3% of Expedited Freight operating revenue for the nine months ended September 30, 2024 compared to 46.4% for the same period in 2023.

The increase in purchased transportation was primarily due to higher volumes in the Network and the change in 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 services.

For the nine months ended September 30, 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 65.1%, 30.1% and 4.8% in the same period in 2023.

Salaries, Wages, and Employee Benefits

Expedited Freight salaries, wages and employee benefits increased $15,587, or 9.2%, to $185,824 for the nine months ended September 30, 2024 from $170,237 for the nine months ended September 30, 2023.

Salaries, wages and employee benefits were 21.9% of Expedited Freight operating revenues for the nine months ended September 30, 2024 compared to 20.8% for the same period in 2023.

The increase in salaries, wages and employee benefits expense was primarily due to higher Company-employed driver count in response to the higher volumes and an increase in salaries and wage rates compared to the same period in 2023.

Operating Leases

Expedited Freight operating leases decreased $1,063, or 2.3%, to $45,268 for the nine months ended September 30, 2024 from $46,331 for the nine months ended September 30, 2023.

Operating leases were 5.3% of Expedited Freight operating revenues for the nine months ended September 30, 2024 compared to 5.7% for the same period in 2023.

The decrease in operating leases expense was primarily due to fewer equipment leases for the nine months ended September 30, 2024, as compared to the same period in 2023.

Depreciation and Amortization

Expedited Freight depreciation and amortization increased $6,376, or 25.4%, to $31,463 for the nine months ended September 30, 2024 from $25,087 for the nine months ended September 30, 2023.

Depreciation and amortization was 3.7% of Expedited Freight operating revenues for the nine months ended September 30, 2024 compared to 3.1% for the same period 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

Expedited Freight insurance and claims increased $4,437, or 15.4%, to $33,293 for the nine months ended September 30, 2024 from $28,856 for the nine months ended September 30, 2023.

Insurance and claims were 3.9% of Expedited Freight operating revenues for the nine months ended September 30, 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, vehicle liability and cargo claims, and insurance premiums, for the nine months ended September 30, 2024 as compared to the same period in 2023.

Other Operating Expenses

Expedited Freight other operating expenses increased $4,350, or 6.1%, to $75,288 for the nine months ended September 30, 2024 from $70,938 for the nine months ended September 30, 2023.

Other operating expenses were 9.0% of Expedited Freight operating revenues for the nine months ended September 30, 2024 compared to 8.6% for the same period in 2023.

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 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 nine months ended September 30, 2024 as compared to the same period in 2023.

Income from Operations

Expedited Freight income from operations decreased $28,582, or 32.0%, to $60,713 for the nine months ended September 30, 2024 compared to $89,295 for the nine months ended September 30, 2023.

Income from operations was 7.1% of Expedited Freight operating revenues for nine months ended September 30, 2024 compared to 10.9% for the same period in 2023.

The decrease in income was primarily a result of 8.2% higher purchased transportation and wage and benefits expenses without sufficient increase in total operating revenue of 3.8% growth.

Intermodal - Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023

The following table sets forth the financial data of our Intermodal segment for the nine months ended September 30, 2024 and 2023:

Intermodal Segment Information

(unaudited and in thousands)

Nine Months Ended

September 30, 2024 Percent of Revenue September 30, 2023 Percent of Revenue Change Percent Change

Operating revenue $ 173,003 100.0 % $ 214,603 100.0 % $ (41,600) (19.4) %

Operating expenses:

9 unchanged sentences

Intermodal Operating Statistics

Nine Months Ended

September 30, 2024 September 30, 2023 Percent Change

Three Months Ended

March 31, 2025 March 31, 2024 Percent Change

Drayage shipments 64,449 62,659 2.9 %

1 unchanged sentence

Operating Revenues

Intermodal operating revenues decreased $41,600, or 19.4%, to $173,003 for the nine months ended September 30, 2024 from $214,603 for the nine months ended September 30, 2023.

The decrease in operating revenues was primarily due to a 9.1% decrease in drayage shipments and a decrease in drayage revenue per shipment of 12.4% as compared to the same period in 2023.

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 nine months ended September 30, 2024 as compared to the same period in 2023.

Operating revenues increased $6,200, or 11.0%, to $62,492 for the three months ended March 31, 2025 from $56,292 for the three months ended March 31, 2024.

The increase in operating revenues was primarily due to a 2.9% increase in drayage shipments and drayage revenue per shipment of 7.4% as compared to the same period in 2024.

The increase also includes higher intermodal yard storage and chassis rental revenues.

Purchased Transportation

Intermodal purchased transportation decreased $1,952, or 3.4%, to $54,916 for the nine months ended September 30, 2024 from $56,868 for the nine months ended September 30, 2023.

Purchased transportation was 31.7% of Intermodal operating revenues for the nine months ended September 30, 2024 compared to 26.5% for the same period in 2023.

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

The decrease in purchased transportation was primarily due to fewer drayage shipments and the change in the mix of freight capacity purchased from Lease Capacity Providers, third-party motor carriers and Company-employed drivers compared to the same period in 2023.

Purchased transportation increased $2,733, or 15.7%, to $20,176 for the three months ended March 31, 2025 from $17,443 for the three months ended March 31, 2024.

Purchased transportation was 32.3% of operating revenues for the three months ended March 31, 2025 compared to 31.0% for the same period in 2024.

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

Purchased transportation expenses increased due to the rise in drayage shipment orders for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Salaries, Wages and Employee Benefits

Intermodal salaries, wages and employee benefits decreased $7,195, or 13.9%, to $44,487 for the nine months ended September 30, 2024 compared to $51,682 for the nine months ended September 30, 2023.

Salaries, wages and employee benefits were 25.7% of Intermodal operating revenues for the nine months ended September 30, 2024 compared to 24.1% for the same period in 2023.

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.

Salaries, wages and employee benefits increased $849, or 5.6%, to $15,931 for the three months ended March 31, 2025 compared to $15,082 for the three months ended March 31, 2024.

Salaries, wages and employee benefits were 25.5% of operating revenues for the three months ended March 31, 2025 compared to 26.8% for the same period in 2024.

The increase in salaries, wages and employee benefits exists primarily due to the increased shipping volume for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Operating Leases

Intermodal operating leases decreased $5,038, or 25.0%, to $15,136 for the nine months ended September 30, 2024 from $20,174 for the nine months ended September 30, 2023.

Operating leases were 8.7% of Intermodal operating revenues for the nine months ended September 30, 2024 compared to 9.4% for the same period in 2023.

The decrease in operating leases expense was primarily due to decreased equipment rental expense incurred to support the decreased accessorial revenues for the nine months ended September 30, 2024 as compared to the same period in 2023.

Depreciation and Amortization

Intermodal depreciation and amortization decreased $818, or 5.5%, to $13,921 for the nine months ended September 30, 2024 from $14,739 for the nine months ended September 30, 2023.

Depreciation and amortization was 8.0% of Intermodal operating revenues for the nine months ended September 30, 2023 compared to 6.9% for the same period in 2023 .

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 $2,210, or 25.2%, to $6,546 for the nine months ended September 30, 2024 from $8,756 for the nine months ended September 30, 2023.

Fuel expense was 3.8% of Intermodal operating revenues for the nine months ended September 30, 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 a decrease in the average price of fuel for the nine months ended September 30, 2024 as compared to the same period in 2023.

Operating leases increased $1,086, or 23.1%, to $5,778 for the three months ended March 31, 2025 compared to $4,692 for the three months ended March 31, 2024.

Operating leases were 9.2% of operating revenues for the three months ended March 31, 2025 compared to 8.3% for the same period in 2024.

The increase in operating leases expense was primarily due to higher real estate lease costs for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Other Operating Expenses

Intermodal other operating expenses decreased $16,953, or 49.6%, to $17,250 for the nine months ended September 30, 2024 compared to $34,203 for the nine months ended September 30, 2023.

Other operating expenses were 10.1% of Intermodal operating revenues for the nine months ended September 30, 2024 compared to 15.9% for the same period in 2023.

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 primarily driven by lower accessorial storage costs incurred to support the decreased accessorial revenues for the nine months ended September 30, 2024 as compared to the same period in 2023.

Other operating expenses decreased $496, or 8.4%, to $5,399 for the three months ended March 31, 2025 from $5,895 for the three months ended March 31, 2024.

Other operating expenses were 8.6% of operating revenues for the three months ended March 31, 2025 compared to 10.5% for the same period in 2024.

The decrease in other operating expenses as a percentage of revenue was primarily due to improved overall spend management for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Income from Operations

Intermodal income from operations decreased by $7,265, or 35.9%, to $12,994 for the nine months ended September 30, 2024 compared to $20,259 for the nine months ended September 30, 2023.

Income from operations was 7.5% of Intermodal operating revenue for the nine months ended September 30, 2024 compared to 9.4% for the same period in 2023.

The decrease in income from operations as a percentage of operating revenues was driven by 12.4% lower drayage revenue per shipment on 9.1% fewer drayage shipments and 1.90% higher overall operating expenses as a percentage of revenue for the nine month period ended September 30, 2024 as compared to the same period in 2023.

Other Operations - Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023

Other operations included a $79,175 operating loss during the nine months ended September 30, 2024 compared to a $24,344 operating loss during the nine months ended September 30, 2023.

The change in the operating loss was primarily driven by $71,393 of post-acquisition transaction and integration costs incurred in connection with the Omni Acquisition.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in conformity with GAAP.

The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and expenses during the reporting period.

On an ongoing basis, management evaluates estimates, including those related to allowance for doubtful accounts and revenue adjustments, deferred income taxes and uncertain tax positions, goodwill, other intangible and long-lived assets, and self-insurance loss reserves.

Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.

Actual results may differ from those estimates under different assumptions or conditions.

A description of critical accounting policies and related judgments and estimates that affect the preparation of the Condensed Consolidated Financial Statements is set forth in the Annual Report on Form 10-K for the year-ended December 31, 2023.

The following supplements the 2023 Annual Form 10-K.

We test goodwill at the reporting unit level for impairment annually as of June 30 and on an interim basis when events occur or circumstances exist that carrying value may not be recoverable.

We estimate the fair value of a reporting unit using a discounted cash flow (DCF), or as appropriate, a combination of the DCF and market approach known as the guideline public company approach.

Under the DCF model, we calculate the fair value of a reporting unit under the present value of estimated cash flows.

The significant assumptions in the DCF model primarily include, but are not limited to, forecast of annual revenue growth rates, annual operating income margin, and the terminal growth rate and the discount rate used to present value the cash flow projections.

When determining these assumptions and preparing these estimates, we consider historical performance trends, and the reporting units underlying business and other market trends that may affect the reporting unit.

The discount rate is based on the estimated weighted average cost of capital as of the test date of market participants in the industry in which the reporting unit operates.

Under the guideline public company method, we estimate the fair value based upon market multiples of revenue and earnings derived from publicly traded companies with similar operating and investment characteristics as the reporting unit.

Estimating the fair value of a reporting unit involves uncertainties because it requires management to develop numerous assumptions, including assumptions about the future growth and potential volatility in revenues and costs, capital expenditures, industry economic factors and future business strategy.

Changes in projected revenue growth rates, projected operating income margins or estimated discount rates due to uncertain market conditions, loss of one or more key customers, changes in our strategy, changes in technology or other factors could negatively affect the fair value in one or more of our reporting units and result in a material impairment charge in the future.

To assess the reasonableness of the calculated fair values of our reporting units, we also compare the sum of the reporting units’ fair values to our market capitalization and calculate an implied control premium.

2024 Annual Goodwill Analysis

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

To complete the Omni Logistics 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.

As a result of the annual test, we recorded goodwill impairment charges totaling $1,092,714 million which all related to our Omni Logistics 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 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 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.

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

Purchase price allocation of Omni Logistics 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 nine months ended September 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.

Income from operations increased $1,956, or 54.5%, to $5,542 for the three months ended March 31, 2025 compared to $3,586 for the three months ended March 31, 2024.

Income from operations was 8.9% of operating revenues for the three months ended March 31, 2025 compared to 6.4% for the same period in 2024.

The increase in income from operations as a percentage of operating revenues was primarily due to an increase in the volume of drayage shipments as well as higher revenue per shipment for the three months ended March 31, 2025 as compared to three months ended March 31, 2024.

Corporate - Three Months Ended March 31, 2025 compared to Three Months Ended March 31, 2024

Corporate included $19,788 of operating loss during the three months ended March 31, 2025 compared to $60,231 of operating loss during the three months ended March 31, 2024.

The decrease in the operating loss was primarily due to $13,926 of professional fees incurred in 2025 for transaction and integration costs in connection with the Omni Acquisition as compared to $61,924 in 2024.

Liquidity and Capital Resources

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

In the first quarter of 2024, our then existing credit facility was repaid and extinguished in tandem with the Omni Acquisition.

We believe that availability of borrowings under the Revolving Credit Facility and our New Term Loans, together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements over the next twelve months.

As previously disclosed and more fully described below and in Note 4, Acquisitions, to the Condensed Consolidated Financial Statements, we incurred significant indebtedness in connection with the Omni Acquisition.

We have historically financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under the revolving credit portion of our Credit Agreement.

We believe that availability of borrowings under our Credit Agreement together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements over the next twelve months.

As previously disclosed and more fully described above and in Note 2, Acquisitions, to the Condensed 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 the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2024, Item 1A, “Risk Factors” - “Risks Relating to our Indebtedness”.

In addition, we frequently utilize operating leases to acquire revenue equipment.

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” and consolidated VIE at December 31, 2023) launched a private offering of $725,000 aggregate principal amount of 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.

The Notes bear interest at a rate of 9.5% per annum, payable semiannually in cash in arrears on April 15 and October 15 of each year, commencing April 15, 2024.

The Notes were issued at 98.0% of the face amount and will mature on October 15, 2031.

The Notes were issued pursuant to an indenture, dated as of October 2, 2023, between the Escrow Issuer and U.S.

Bank Trust Company, National Association, as trustee and notes collateral agent.

The Notes are guaranteed on a senior secured basis in an aggregate principal amount in excess of $100,000.

Prior to October 15, 2026, Opco may redeem some or all of the Notes at any time and from time to time at a redemption price equal to 100.000% of the principal amount thereof plus the applicable “make-whole” premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

On or after October 15, 2026, Opco may redeem some or all of the Notes at the following prices (expressed as a percentage of principal), plus in each case accrued and unpaid interest, if any, to, but excluding, the redemption date:

(a) in the case of a redemption occurring during the 12-month period commencing October 15, 2026, at a redemption price of 104.750%;

(b) in the case of a redemption occurring during the 12-month period commencing on October 15, 2027, at a redemption price of 102.375%;

and (c) in the case of a redemption occurring on or after October 15, 2028, at a redemption price of 100.000%.

In addition, at any time prior to October 15, 2026, Opco may redeem up to 40.000% of the original aggregate principal amount of the Notes in an amount not to exceed the amount of net cash proceeds from one or more equity offerings at a redemption price equal to 109.5 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Upon the occurrence of a “change of control”, Opco will be required to offer to repurchase all of the outstanding principal amount of the Notes at a purchase price of 101.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

Senior Secured Term Loan Facility

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” and consolidated VIE at December 31, 2023), entered into the Credit Agreement.

Pursuant to the Credit Agreement, the Escrow Loan Borrower obtained the New Term Loans and the ability to draw down up to $400,000 under 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.

The base rate is equal the highest of the following:

(i) the prime rate;

(ii) 0.50% above the overnight federal funds rate;

and (iii) the one-month SOFR plus 1.00%.

The applicable margin for SOFR loans is 4.50% and the applicable margin for base rate loans is 3.50%.

The New Term Loans are subject to customary amortization of 1.00% per year.

The New Term Loans were issued at 96.0% of the face amount and will mature on December 19, 2030.

No borrowings under the Revolving Credit Facility were made in connection with the Omni Acquisition.

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.

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.

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.

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.

2 to the Credit Agreement, which (a) modifies the financial performance covenant in the Credit Agreement by temporarily increasing the 4.50:1.00 maximum consolidated first lien net leverage ratio permitted by the covenant to (i) 6.00:1.00 (for the second and third quarters of 2024), (ii) 5.50:1.00 (for the fourth quarter of 2024), (iii) 5.25:1.00 (for the first quarter of 2025), (iv) 5.00:1.00 (for the second quarter of 2025) and (v) 4.75:1.00 (for the third quarter of 2025) and (b) reduces the revolving credit commitments available under the Credit Agreement from an aggregate principal amount of $400,000 to an aggregate principal amount of $340,000.

Amendment No.

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

Prior to the effectiveness of Amendment No.

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.

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.

The Revolving Credit Facility’s terms also include a financial covenant which requires us to maintain a specific leverage ratio.

As of the date of this report, we were in compliance with all aforementioned covenants.

Tax Receivable Agreement

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.

Payment obligations under the Tax Receivable Agreement rank pari passu with all unsecured obligations but senior to any future tax receivable or similar agreement entered into by us.

The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless we elect to terminate the Tax Receivable Agreement early (or it is terminated early due to a change of control or insolvency event with respect to us or a material breach by us of a material obligation under the Tax Receivable Agreement).

Upon such an early termination, we will be required to make a payment equal to the present value of the anticipated future payments to be made by it under the Tax Receivable Agreement (based upon certain assumptions and deemed events set forth in the Tax Receivable Agreement).

In the event of a change of control, under certain circumstances, we may elect to pay the early termination payment over a period of 15 years, with the payments increased to reflect the time value of money.

Continuing Operations

Net cash used in operating activities of continuing operations was $45,770 for the nine months ended September 30, 2024 compared to net cash provided by operating activities of $142,120 for the nine months ended September 30, 2023.

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

Net cash used in investing activities was $1,592,878 for the nine months ended September 30, 2024 compared to $75,508 for the nine months ended September 30, 2023.

Capital expenditures for the first nine months of 2024 were $29,810, which primarily related to the purchase of technology and operating equipment.

Capital expenditures for the first nine months of 2023 were $22,080, which also primarily related to the purchase of technology and operating equipment.

Investing activities of continuing operations for the first nine months of 2024 included the Omni Acquisition for a preliminary purchase price of $2,313,653, of which $1,565,242 was cash consideration and the remainder non-cash equity shares.

Further, investing activities for the first nine months of 2023 included the acquisition of Land Air for a preliminary purchase price of $56,567.

Net cash used in financing activities of continuing operations was $169,394 for the nine months ended September 30, 2024 compared to $93,591 for the nine months ended September 30, 2023.

The change in the net cash used in financing activities of continuing operations was primarily due to the payment of debt issuance costs, payments on the New Term Loans, payment of finance lease obligations, and payment of an earn-out liability.

Discontinued Operation

Net cash used in operating activities of discontinued operation was $6,013 for the nine months ended September 30, 2024 compared to net cash provided by operating activities for discontinued operations of $17,311 for the nine months ended September 30, 2023.

The change in net cash provided by operating activities of discontinued operation was primarily related to a decrease in net income of discontinued operation after consideration of non-cash items.

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

Net cash used in investing activities of discontinued operation was $0 for the nine months ended September 30, 2024 compared to $1,338 for the nine months ended September 30, 2023.

The change in the net cash used in investing activities of discontinued operation was due to the sale of Final Mile, which was completed on December 20, 2023.

Net cash used in financing activities of discontinued operation was $0 for the nine months ended September 30, 2024 compared to $15,973 for the nine months ended September 30, 2023.

Stock Repurchase Program

During the nine months ended September 30, 2024, we did not repurchase any shares of our common stock.

During the nine months ended September 30, 2023, we repurchased 883 shares of our common stock for approximately $93,811, through open market transactions.

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 our Condensed Consolidated Balance Sheets.

Net cash provided by operating activities was $27,615 for the three months ended March 31, 2025 compared to net cash used in operating activities of $51,719 for the three months ended March 31, 2024.

The increase in net cash used in operating activities was primarily due to the change in net loss after consideration of non-cash items and an improvement of cash flow from working capital accounts.

Net cash used in investing activities was $11,239 for the three months ended March 31, 2025 compared to $1,569,452 for the three months ended March 31, 2024.

Capital expenditures for the three months ended March 31, 2025 and for the three months ended March 31, 2024 were $11,906 and $4,970, respectively, which primarily related to the purchase of technology and operating equipment.

Investing activities of operations for the three months ended Mach 31, 2024 included the Omni Acquisition for a purchase price of $2,274,240.

Net cash used in financing activities of operations was $5,325 for the three months ended March 31, 2025 compared to $158,726 for the three months ended March 31, 2024.

The change in the net cash used in financing activities for the three months ended March 31, 2025 primarily consisted of repayments on finance lease obligations, where the same period in 2024 included repayment of borrowings, payment of debt issuance costs and the payment of earn-out liabilities.

Forward-Looking Statements

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(x) intended expansion through acquisitions or greenfield startups, and the impact of any such acquisition on our business;

(xi) our ability to use key performance metrics to gauge growth strategies;

(xi) our ability to use key performance metrics and key operating statistics to gauge growth strategies;

(xii) future business, economic conditions or performance, as well as industry projections;

(xiii) competition, including our specific advantages, the capabilities of our segments, including the integration of services and our geographic location;

(xiv) expectations regarding plans, strategies, and objectives of management for future operations and (xv) any belief and any statements of assumptions underlying any of the foregoing.

(xiv) expectations regarding plans, strategies, and objectives of management for future operations;

(xv) our beliefs regarding the effect on our condensed consolidated financial statements resulting from the resolution of claims and pending litigation;

(xvi) our beliefs regarding our ability to support our working capital, capital expenditures and debt service requirements over the next twelve months;

(xvii) our beliefs regarding internal control over financial reporting and the implementation of our remediation plan to address material weaknesses;

(xviii) our beliefs regarding the potential impact of tariffs on our financial position, results of operations and/or cash flows and our reliance on any the regions that are subject to the recent tariff increases and (xix) any belief and any statements of assumptions underlying any of the foregoing.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements:

economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, the outcome and related impact of the Omni Acquisition, continued weakening of the freight environment, future debt and financing levels, the outcome of any legal proceedings related to the Omni Acquisition, our substantial indebtedness, our ability to manage our growth and ability to grow, in part, through acquisitions while being able to successfully integrate such acquisitions, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party motor carriers needed to serve our customers’ transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, changes in fuel prices, loss of a major customer, increasing competition and pricing pressure, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws, the cost of new equipment, the impact and efficacy of our disclosure controls and procedures, and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2023.

of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, changes in fuel prices, loss of a major customer, increasing competition and pricing pressure, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws, the cost of new equipment, the impact and efficacy of our disclosure controls and procedures, and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2024.

As a result of the foregoing, no assurance can be given as to future financial condition, cash flows or results of operations.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis