FORWARD AIR CORP 10-Q

Item 1. Financial Statements (Unaudited). Forward Air Corporation Condensed Consolidated Balance Sheets (unaudited and in thousands, except share and per share amounts) March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 116,311 $ 104,903 Restricted cash and restricted cash equivalents 363 363 Accounts receivable, less allowance of $ 3,264 in 2025 and $ 3,269 in 2024 336,398 322,291 Prepaid expenses 29,398 29,053 Other current assets 10,895 15,890 Total current assets 493,365 472,500 Property and equipment, net of accumulated depreciation and amortization of $ 302,998 in 2025 and $ 292,855 in 2024 331,208 326,188 Operating lease right-of-use assets 408,642 410,084 Goodwill 522,712 522,712 Other acquired intangibles, net of accumulated amortization of $ 235,999 in 2025 and $ 212,905 in 2024 976,122 999,216 Other long term assets 71,793 71,941 Total assets $ 2,803,842 $ 2,802,641 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 111,510 $ 105,692 Accrued expenses 143,533 119,836 Other current liabilities 68,197 45,148 Current portion of debt and finance lease obligations 17,446 16,930 Current portion of operating lease liabilities 97,578 96,440 Total current liabilities 438,264 384,046 Finance lease obligations, less current portion 34,332 30,858 Long-term debt, less current portion 1,678,647 1,675,930 Liabilities under tax receivable agreement 13,295 13,295 Operating lease liabilities, less current portion 324,957 325,640 Other long-term liabilities 52,164 48,835 Deferred income taxes 35,177 38,169 Shareholders' equity: Preferred stock, $ 0.01 par value: Authorized shares - 5,000,000 ; no shares issued or outstanding in 2025 and 2024 — — Preferred stock, Class B, $ 0.01 par value: Authorized shares - 15,000 ; issued and outstanding shares - 9,511 in 2025 and 10,088 in 2024 — — Common stock, $ 0.01 par value: Authorized shares - 50,699,707 ; issued and outstanding shares - 30,413,067 in 2025 and 29,761,197 in 2024 304 298 Additional paid-in capital 546,556 542,392 Accumulated deficit ( 389,759 ) ( 338,230 ) Accumulated other comprehensive loss ( 2,467 ) ( 2,732 ) Total Forward Air shareholders' equity 154,634 201,728 Noncontrolling interest 72,372 84,140 Total shareholders' equity 227,006 285,868 Total liabilities and shareholders' equity $ 2,803,842 $ 2,802,641 The accompanying notes are an integral part of the condensed consolidated financial statements. 3 Table of Contents Forward Air Corporation Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited and in thousands, except per share amounts) Three Months Ended March 31, 2025 March 31, 2024 Operating revenue $ 613,281 $ 541,813 Operating expenses: Purchased transportation 304,262 277,015 Salaries, wages and employee benefits 141,915 128,867 Operating leases 48,792 38,803 Depreciation and amortization 37,360 31,786 Insurance and claims 15,007 12,881 Fuel expense 5,649 5,246 Other operating expenses 55,533 112,947 Total operating expenses 608,518 607,545 Income (loss) from operations 4,763 ( 65,732 ) Other income and expenses: Interest expense, net ( 45,547 ) ( 40,753 ) Foreign exchange loss ( 922 ) ( 668 ) Other income, net 104 9 Total other expense ( 46,365 ) ( 41,412 ) Net loss before income taxes ( 41,602 ) ( 107,144 ) Income tax (benefit) expense 19,589 ( 18,350 ) Net loss ( 61,191 ) ( 88,794 ) Net loss attributable to non-controlling interest ( 10,554 ) ( 27,082 ) Net loss attributable to Forward Air $ ( 50,637 ) $ ( 61,712 ) Basic and diluted loss per share attributable to Forward Air $ ( 1.68 ) $ ( 2.81 ) Net loss $ ( 61,191 ) $ ( 88,794 ) Other comprehensive income (loss): Foreign currency translation adjustments 265 ( 151 ) Comprehensive loss ( 60,926 ) ( 88,945 ) Comprehensive loss attributable to non-controlling interest ( 10,554 ) ( 27,082 ) Comprehensive loss attributable to Forward Air $ ( 50,372 ) $ ( 61,863 ) The accompanying notes are an integral part of the condensed consolidated financial statements. 4 Table of Contents Forward Air Corporation Condensed Consolidated Statements of Cash Flows (unaudited and in thousands) Three Months Ended March 31, 2025 March 31, 2024 Operating activities: Net loss $ ( 61,191 ) $ ( 88,794 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 37,360 31,786 Share-based compensation expense 2,958 1,567 Provision for revenue adjustments 647 1,038 Deferred income tax expense (benefit) ( 2,792 ) 2,945 Other 3,799 4,169 Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses: Accounts receivable ( 21,145 ) ( 20,495 ) Other receivables ( 434 ) 5,367 Other current and noncurrent assets 767 ( 7,104 ) Accounts payable and accrued expenses 67,646 17,802 Net cash provided by (used in) operating activities 27,615 ( 51,719 ) Investing activities: Proceeds from sale of property and equipment 691 849 Purchases of property and equipment ( 11,906 ) ( 4,970 ) Purchase of a business, net of cash acquired — ( 1,565,242 ) Other ( 24 ) ( 89 ) Net cash used in investing activities ( 11,239 ) ( 1,569,452 ) Financing activities: Repayments of finance lease obligations ( 4,431 ) ( 4,562 ) Proceeds from credit facility 25,000 — Payments on credit facility ( 25,000 ) ( 80,000 ) Payment of debt issuance costs — ( 60,591 ) Payment of earn-out liability — ( 12,247 ) Payment of minimum tax withholdings on share-based awards ( 894 ) ( 1,326 ) Net cash used in financing activities ( 5,325 ) ( 158,726 ) Effect of exchange rate changes on cash 357 94 Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 11,408 ( 1,779,803 ) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 105,266 1,952,073 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 116,674 $ 172,270 5 Table of Contents Forward Air Corporation Consolidated Statements of Cash Flows (unaudited and in thousands) Three Months Ended March 31, 2025 March 31, 2024 Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents: Cash and cash equivalents $ 116,311 $ 152,042 Restricted cash and restricted cash equivalents 363 20,228 Total cash, cash equivalents, restricted cash and restricted cash equivalents shown in the statement of cash flow: $ 116,674 $ 172,270 The accompanying notes are an integral part of the condensed consolidated financial statements. 6 Table of Contents Forward Air Corporation Condensed Consolidated Statements of Shareholders' Equity (unaudited and in thousands) Common Stock Preferred Stock - Class B Amount Preferred Stock - Class C Amount Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Noncontrolling Interest Total Shareholders' Equity Shares Amount Shares Amount Shares Amount Balance at December 31, 2024 29,761 $ 298 10 $ — — $ — $ 542,390 $ ( 2,732 ) $ ( 338,228 ) $ 84,140 $ 285,868 Net loss — — — — — — — — ( 50,637 ) ( 10,554 ) ( 61,191 ) Foreign currency translation adjustments — — — — — — — 265 — — 265 Issuance of share-based awards 97 — — — — — — — — — — Payment of minimum tax withholdings on share-based awards ( 30 ) — — — — — — — ( 894 ) — ( 894 ) Series B - Conversions 585 6 ( 1 ) — 1,208 ( 1,214 ) — Share-based compensation expense — — — — — — 2,958 — — — 2,958 Balance at March 31, 2025 30,413 $ 304 9 $ — — $ — $ 546,556 $ ( 2,467 ) $ ( 389,759 ) $ 72,372 $ 227,006 Common Stock Preferred Stock - Class B Amount Preferred Stock - Class C Amount Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Noncontrolling Interest Total Shareholders' Equity Shares Amount Shares Amount Shares Amount Balance at December 31, 2023 25,671 257 — — — — 283,684 — 480,320 — 764,261 Net loss — — — — — — — — ( 61,712 ) ( 27,082 ) ( 88,794 ) Foreign currency translation adjustments — — — — — — — ( 151 ) — — ( 151 ) Shares issued - acquisition 700 7 4 — 1 — 223,425 — — 433,449 656,881 Share-based compensation expense — — — — — — 1,567 — — — 1,567 Payment of minimum tax withholdings on share-based awards ( 33 ) — — — — — — — ( 1,326 ) — ( 1,326 ) Issuance of share-based awards 100 1 — — — — ( 1 ) — — — — Balance at March 31, 2024 26,438 $ 265 4 $ — 1 $ — $ 508,675 $ ( 151 ) $ 417,282 $ 406,367 $ 1,332,438 The accompanying notes are an integral part of the condensed consolidated financial statements. 7 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 1. Basis of Presentation Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature necessary to present fairly the Company’s financial position, results of operations, and cash flows for the periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Results for interim periods are not necessarily indicative of the results for the year. Recent Issued Accounting Standards Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance in this ASU expands the disclosure requirements for income taxes by requiring greater disaggregation of information in the income tax rate reconciliation and disaggregation of income taxes paid by jurisdiction. The guidance in this ASU is effective for all public entities for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the effects adoption of this guidance will have on our consolidated financial statements. 2. Acquisitions Acquisition of Omni On January 25, 2024, (the “Closing”) the Company completed the acquisition of Omni Newco, LLC ("Omni" and the acquisition of Omni, the "Omni Acquisition") pursuant to the Agreement and Plan of Merger, dated as of August 10, 2023 (the “Merger Agreement”, and amended by Amendment No. 1, dated as of January 22, 2024, the “Amended Merger Agreement”). Omni, headquartered near Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with customer relationships in high-growth end markets. Omni delivers domestic and international freight forwarding, fulfillment services, customs brokerage, distribution, and value-added services for time-sensitive freight to U.S.-based customers operating both domestically and internationally. Pursuant to the Amended Merger Agreement, through a series of transactions involving the Company’s direct and indirect subsidiaries (collectively, with the other transactions contemplated by the Amended Merger Agreement and the other Transaction Agreements referred to therein, the “Transactions”), the Company acquired Omni for a combination of (a) $ 100,499 in cash (which includes pre-acquisition Omni costs of approximately $ 80 million) and (b) 14,015 shares of the Company’s outstanding common stock, on an as-converted and as-exchanged basis (the “Equity Consideration”) consisting of: (i) 1,910 shares of common stock (of which 1,210 were issued upon conversion of the Series C Preferred Units upon approval of the Company’s shareholders at the 2024 Annual Shareholders Meeting held on June 3, 2024 (the “Conversion Approval”)) and (ii) 12,105 Opco Class B Units 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). At the date of acquisition, the Equity Consideration represented 35 % of the Company’s outstanding common stock on a fully-diluted and as-exchanged basis. Prior to the consummation of the Transactions, the Company completed a restructuring, pursuant to which, among other things, the Company contributed all of its operating assets to Clue Opco LLC, a newly formed subsidiary of the Company (“Opco”). Opco has been structured as an umbrella partnership C corporation through which the existing direct and certain indirect equity holders of Omni (“Omni Holders”) hold a portion of the Equity Consideration in the form of units of Opco designated as “Class B Units” (“Opco Class B Units”) and corresponding Series B Preferred Units. Effective as of the Closing, the Company operates its business through Opco, which indirectly holds all of the assets and operations of the Company and Omni. Opco is governed by an amended and restated limited liability company agreement of Opco that became effective at the Closing (“Opco LLCA”). 8 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 At the Closing, the Company, Opco, Omni Holders and certain other parties entered into a tax receivable agreement (the “Tax Receivable Agreement”), which sets forth the agreement among the parties regarding the sharing of certain tax benefits realized by the Company as a result of the Transactions. Pursuant to the Tax Receivable Agreement, the Company is generally obligated to pay certain Omni Holders 83.5 % of (a) the total tax benefit that the Company realizes as a result of increases in tax basis in Opco’s assets resulting from certain actual or deemed distributions and the future exchange of units of Opco for securities of the Company (or cash) pursuant to the Opco LLCA, (b) certain pre-existing tax attributes of certain Omni Holders that are corporate entities for tax purposes, (c) the tax benefits that the Company realizes from certain tax allocations that correspond to items of income or gain required to be recognized by certain Omni Holders, and (d) other tax benefits attributable to payments under the Tax Receivable Agreement. The Omni Acquisition enables the Company to provide a differentiated service offering and expanded geographic footprint to customers. In addition, the combination of these complementary businesses positions the Company to deliver integrated global supply chain solutions for customers’ most service-sensitive logistics needs. Goodwill recognized related to the purchase represents planned operational synergies, expanded geographic reach of our services, and strategic market positioning. The results of Omni have been included in the Condensed Consolidated Financial Statements as of and from the date of acquisition. The associated goodwill has been included in the Omni Logistics operating segment and reporting unit and is not expected to be deductible for tax purposes. 9 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 Business Combination Accounting - Omni Logistics Assets acquired and liabilities assumed as of the acquisition date are presented in the following table: January 26, 2024 Opening Balance Sheet as Reported at March 31, 2024 Adjustments January 26, 2024 Opening Balance Sheet as Reported at December 31, 2024 Consideration Transferred Cash consideration paid $ 100,499 $ — $ 100,499 Liabilities under tax receivable agreement 13,270 — 13,270 Common shares 32,795 ( 1,967 ) 30,828 Series B preferred shares 207,880 ( 12,473 ) 195,407 Series C preferred shares 56,713 ( 3,403 ) 53,310 Opco C-2 preferred units 359,493 ( 21,570 ) 337,923 Extinguishment of Omni's indebtedness 1,543,003 — 1,543,003 Total purchase price (fair value of consideration) 2,313,653 ( 39,413 ) 2,274,240 Fair Value of Assets Acquired and Liabilities Assumed Cash and cash equivalents acquired 78,260 ( 10,977 ) 67,283 Accounts receivable 181,570 10,441 192,011 Property and equipment 75,292 14,082 89,374 Other assets 35,639 ( 3,084 ) 32,555 Operating lease right-of-use assets 234,025 13,665 247,690 Customer relationships 1,062,729 ( 158,929 ) 903,800 Non-compete agreements 42,509 ( 19,109 ) 23,400 Trademarks and other 42,510 ( 19,410 ) 23,100 Total assets acquired 1,752,534 ( 173,321 ) 1,579,213 Current liabilities 156,408 ( 368 ) 156,040 Finance lease obligations 14,606 2,977 17,583 Operating lease liabilities 234,025 13,844 247,869 Other liabilities 643 ( 559 ) 84 Deferred income taxes 133,673 22,127 155,800 Total liabilities assumed 539,355 38,021 577,376 Goodwill $ 1,100,474 $ 171,929 $ 1,272,403 For the three months ended March 31, 2025 and 2024 , the Co mpany recorded $ 13,926 and $ 61,924 of trans actions and integration costs incurred in connection with the Omni Acquisition, respectively. The transaction and integration costs were recorded in “Other operating expenses” in the Condensed Consolidated Statements of Operations. The weighted average useful life of acquired intangible assets as of the acquisition date are summarized in the following table: (weighted average years) Omni Customer relationships 14 years Non-compete agreements 4 years Trademarks and other 5 years 10 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 Supplemental Pro Forma Information The following table represents the pro forma financial information as if Omni had been included in the consolidated results of the Company since January 1, 2024 (unaudited and in thousands) : March 31, 2024 Pro forma revenue $ 623,813 Pro forma net loss ( 154,345 ) The pro forma financial information adjusts the net loss for amortization of the intangible assets and the fair value adjustments of the assets acquired in connection with the Omni Acquisition as if the closing had occurred on January 1, 2024. 3. Indebtedness Long-term debt consisted of the following as of March 31, 2025 and December 31, 2024: March 31, 2025 December 31, 2024 Term Loan, expiring 2030 $ 1,045,000 $ 1,045,000 Senior Secured Notes, maturing 2031 725,000 725,000 Debt issuance discount ( 52,483 ) ( 54,067 ) Debt issuance costs ( 38,870 ) ( 40,003 ) Total long-term debt $ 1,678,647 $ 1,675,930 The Term Loan is part of our Credit Agreement that includes a revolving credit facility. At the end of March 31, 2025 and December 31, 2024, the revolving credit facility has $ 277 million of borrowings available and no borrowings outstanding. 4. Net Loss Per Share Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during each period. Restricted shares have non-forfeitable rights to dividends and as a result, are considered participating securities for purposes of computing net income per common share pursuant to the two-class method. Diluted net loss per common share assumes the exercise of outstanding stock options and the vesting of performance share awards using the treasury stock method when the effects of such assumptions are dilutive. 11 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 A reconciliation of net loss attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net loss per share during the three months ended March 31, 2025 and 2024 is as follows: Three Months Ended March 31, 2025 March 31, 2024 Numerator: Net loss $ ( 61,191 ) $ ( 88,794 ) Less, net loss attributable to noncontrolling interest ( 10,554 ) ( 27,082 ) Net loss attributable to Forward Air ( 50,637 ) ( 61,712 ) Dividends allocated to Opco C-2 Preferred Units — ( 11,867 ) Numerator for basic and diluted net loss per share $ ( 50,637 ) $ ( 73,579 ) Denominator: Denominator for basic and diluted net loss per share - weighted-average number of common shares outstanding 30,193 26,217 Basic and diluted net loss per share attributable to Forward Air: Net loss per basic and diluted share 1 $ ( 1.68 ) $ ( 2.81 ) 1 Rounding may impact summation of amounts. The number of shares that were not included in the calculation of net loss per diluted share because to do so would have been anti-dilutive for the three months ended March 31, 2025 and 2024 are as follows: Three Months Ended March 31, 2025 March 31, 2024 Anti-dilutive stock options 247 287 Anti-dilutive performance shares 55 12 Anti-dilutive restricted shares and deferred stock units 293 181 Total anti-dilutive shares 595 480 5. Income Taxes The Company is taxed as a C corporation and is subject to federal and state income taxes. The Company’s sole material asset is Opco, which is a limited liability company that is taxed as a partnership for federal and certain state and local income tax purposes. Opco’s net taxable income and related tax credits, if any, are passed through to its partners and included in the partner’s tax returns. The income tax burden on the earnings or losses taxed to the noncontrolling interest holders is not reported by the Company in its condensed consolidated financial statements. As a result, the Company’s effective tax rate differs materially from the statutory rate. For the three months ended March 31, 2025 and 2024, the Company recorded an income tax expense of $ 19,589 and income tax benefit of $ 18,350 , respectively. The effective tax rate of ( 47.1 )% 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 of 17.1 % 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. 12 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 The Company recognizes income tax benefits from uncertain tax positions where the realization of the ultimate benefit is uncertain. As of March 31, 2025 and December 31, 2024, the Company had $ 7,392 and $ 2,131 of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized. At March 31, 2025 and December 31, 2024, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 431 and $ 394 . With a few exceptions, the Company is no longer subject to U.S. federal, state and local, or Canadian examinations by tax authorities for years before 2018. The Company maintains a full valuation allowance against its net deferred tax assets, which are primarily related to interest expense carryforwards. The Company assessed the likelihood that its deferred tax assets would be recovered from estimated future taxable income and available tax planning strategies. In making this assessment, all available evidence was considered including economic climate, as well as reasonable tax planning strategies. The Organization for Economic Co-operation and Development (“OECD”), continues to put forth various initiatives, including Pillar Two rules which include the introduction of a global minimum tax at a rate of 15%. European Union member states agreed to implement the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025, for different aspects of the directive and most have already enacted legislation. A number of other countries are also implementing similar legislation. As of March 31, 2025, based on the countries in which we do business that have enacted legislation effective January 1, 2025, the impact of these rules to our financial statements was not material. This may change as other countries enact similar legislation and further guidance is released. We continue to closely monitor regulatory developments to assess potential impacts. In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of March 31, 2025, the Company has not recorded a provision for U.S. or additional foreign withholding taxes on investments in foreign subsidiaries that are indefinitely reinvested. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. 6. Fair Value of Financial Instruments The Company categorizes its assets and liabilities into one of three levels based on the assumptions used in valuing the asset or liability. Estimates of fair value financial assets and liabilities are based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Model-derived valuations in which one or more significant inputs are unobservable. Assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 are summarized below: 13 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 As of March 31, 2025 Level 1 Level 2 Level 3 Total Liabilities under tax receivable agreement $ — $ — $ 13,295 $ 13,295 As of December 31, 2024 Level 1 Level 2 Level 3 Total Liabilities under tax receivable agreement $ — $ — $ 13,295 $ 13,295 Cash, cash equivalents and restricted cash, accounts receivable, other receivables and accounts payable are valued at their carrying amounts in the Company’s Condensed Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial instruments. The carrying value of the long-term debt at March 31, 2025 and December 31, 2024 approximates fair value based on the borrowing rates currently available for a loan with similar terms and average maturity. 7. Commitments and Contingencies Contingencies On September 26, 2023, Rodney Bell, Michael A. Roberts and Theresa Woods (collectively, the "Plaintiffs"), three of our shareholders, filed a complaint against the Company and certain of its directors and officers in the Third District Chancery Court sitting in Greeneville, Tennessee (the "Shareholder Complaint"). The Shareholder Complaint alleges, among other things, that the Company’s shareholders had the right to vote on certain transactions contemplated by the Merger Agreement and sought an injunction against the consummation of the transaction until a shareholder vote was held. The court initially granted a temporary restraining order enjoining the transactions contemplated by the Merger Agreement but later dissolved it on October 25, 2023. Thereafter, the parties to the Amended Merger Agreement completed the Omni Acquisition. On May 2, 2024, Plaintiff Michael Roberts, together with the Cambria County Employees Retirement System filed a stipulation and proposed order seeking leave of court to file an amended class action complaint seeking damages, among other forms of relief. Upon receiving leave of the court, on May 15, 2024, the Plaintiffs filed the amended complaint (“Second Amended Complaint”). Like the earlier complaints, the Second Amended Complaint challenges the directors’ determination not to subject the Omni Acquisition to a shareholder vote and alleges that, in so doing, the Company and certain of its current and former directors violated Tennessee corporate law. The Second Amended Complaint further alleges that certain of the Company’s current and former directors breached their fiduciary duties to shareholders by depriving them of the right to vote on the Omni Acquisition. Thereafter, on June 14, 2024, defendants removed the case to the United States District Court for the Eastern District of Tennessee, Greeneville Division. Plaintiffs filed a motion to remand the case to the Third District Chancery Court, and on March 31, 2025, the federal court granted the motion and remanded the case back to the Third District Chancery Court. Defendants contest the merits of the Second Amended Complaint and are in the process of defending the matter. The Company is party to various legal claims and actions incidental to its business, including claims related to vehicle liability, workers’ compensation, property damage and employee medical benefits. The Company accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Based on the knowledge of the facts, the Company believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on the condensed consolidated financial statements. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and related events unfold. 14 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 8. Segment Reporting Our chief operating decision-maker, who is our Chief Executive Officer, analyzes the results of our business through the following reportable segments: Expedited Freight, Omni Logistics, and Intermodal. Our chief operating decision-maker evaluates the operating results and performance of our segments through segment profit. These financial metrics are used to view operating trends, perform analytical comparisons and benchmark performance between periods and to monitor budget-to-actual variances on a monthly basis. To manage operations and make decisions regarding resource allocations, our chief operating decision-maker is regularly provided and reviews information necessary to make decisions to meet customer demand for our services. The accounting policies applied to each segment are the same as those described in the Operations and Summary of Significant Accounting Policies as disclosed in Note 1 to the Annual Report on Form 10-K for the year ended December 31, 2024, except for certain self-insurance loss reserves related to vehicle liability and workers’ compensation. Each segment is allocated an insurance premium and deductible that corresponds to the self-insured retention limit for that particular segment. Any self-insurance loss exposure beyond the deductible allocated to each segment is recorded in Corporate. Segment results from operations for the three months ended March 31, 2025 and 2024 are as follows: For the Three Months Ended March 31, 2025 Expedited Freight Omni Logistics Intermodal Corporate Consolidated External revenues $ 227,196 $ 323,470 $ 62,473 $ 142 $ 613,281 Intersegment revenues 22,185 — 19 — 22,204 249,381 323,470 62,492 142 635,485 Reconciliation of revenue Elimination of intersegmental revenues ( 22,204 ) Total consolidated revenues $ 613,281 Less: Purchase transportation 120,680 185,734 20,176 ( 124 ) Salaries, wages and employee benefits 52,577 56,783 15,931 16,624 Operating leases 15,433 27,090 5,778 491 Depreciation and amortization 10,379 22,230 4,720 31 Insurance and claims 10,308 2,615 2,791 ( 707 ) Fuel expense 2,471 1,017 2,155 6 Other operating expenses 21,899 24,626 5,399 3,609 Segment profit (loss) 15,634 3,375 5,542 ( 19,788 ) 4,763 Reconciliation of segment profit or loss Interest expense, net 45,547 Foreign exchange loss (gain) 922 Other operations ( 104 ) Loss before income taxes $ ( 41,602 ) 15 Table of Contents Forward Air Corporation Notes to Condensed Consolidated Financial Statements (unaudited and in thousands, except per share data) March 31, 2025 For the Three Months Ended March 31, 2024 Expedited Freight Omni Logistics Intermodal Corporate Consolidated External revenues $ 260,753 $ 224,838 $ 56,222 $ — $ 541,813 Intersegment revenues 12,542 — 70 — 12,612 273,295 224,838 56,292 — 554,425 Reconciliation of revenue Elimination of intersegmental revenues ( 12,612 ) Total consolidated revenues $ 541,813 Less: Purchase transportation 127,760 144,424 17,443 — Salaries, wages and employee benefits 62,553 48,775 15,082 2,457 Operating leases 14,982 19,127 4,692 2 Depreciation and amortization 10,290 16,869 4,627 — Insurance and claims 10,652 2,053 2,606 ( 2,430 ) Fuel expense 2,581 304 2,361 — Other operating expenses 24,979 21,871 5,895 60,202 Segment profit (loss) 19,498 ( 28,585 ) 3,586 ( 60,231 ) ( 65,732 ) Reconciliation of segment profit or loss Interest expense, net 40,753 Foreign exchange loss (gain) 668 Other operations ( 9 ) Elimination of intersegment profits — Loss before income taxes $ ( 107,144 ) Omni Logistics revenues and segment loss in the above table represents the period from January 25, 2024 (the date of acquisition) through March 31, 2024. Revenue from the individual services within the Expedited Freight segment for the three months ended March 31, 2025 and 2024 are as follows: Three Months Ended March 31, 2025 March 31, 2024 Expedited Freight revenues: Network $ 190,162 $ 214,493 Truckload 39,255 37,055 Other 19,964 21,747 Total $ 249,381 $ 273,295 Total Assets Expedited Freight Intermodal Omni Logistics Corporate Consolidated As of March 31, 2025 $ 688,846 $ 258,905 $ 1,733,307 $ 122,784 $ 2,803,842 As of December 31, 2024 691,369 257,323 1,726,088 127,861 2,802,641 16