Forward Air Corporation Q3 FY2025 earnings call

Strategic Alternatives Review: The strategic alternatives review process is ongoing, thorough, and inclusive, with discussions continuing with multiple interested parties. The Board is being methodical to ensure the best outcome for the company. ### Transformation Journey: Unified the One Ground Network, rationalized the tech stack, and is upgrading the ERP system with a phased rollout expected by the end of next year. ### Financial Results: Consolidated EBITDA was $78 million in the third quarter, in line with the second quarter; cost reduction initiatives, annualized at ~$12 million, contributed to the results.

Expedited Freight: Third quarter reported EBITDA was $30 million with a margin of 11.5%. Omni Logistics: Third quarter revenue increased to $340 million, reported EBITDA rose to $33 million with a margin of 9.6%; year-over-year, reported EBITDA increased 22% with a margin improvement of 160 basis points. Intermodal segment reported EBITDA of $8 million in the third quarter, in line with prior quarters. Consolidated LTM EBITDA was $299 million.

Management is optimistic that market conditions will rebound and focuses on maintaining the progress made over the past year and keeping momentum long-term. Continues to focus on transformation and cost management efforts.

Macro-economic uncertainties, potential further deterioration in market conditions which could impact results.

Q: Bruce Chan asked about Omni's longer-term margin targets and Q4 seasonality.

A: Shawn and Jamie discussed Omni being at the upper end of margins among comps and Omni not being highly seasonal.

Q: Stephanie Moore inquired about progress on realigning LTL costs.

A: Shawn and Jamie talked about LTL being a variable cost network, moving drivers from LTL to Truckload, and internal productivity initiatives.

Q: Scott Group asked about the process duration and Truckload/LTL trends.

A: Shawn discussed the ongoing process with interested parties coming in at different times, and Shawn and Jamie commented on Truckload booming and LTL being stable.

Q: Christopher Kuhn asked about combined company benefits and LTL-TL conversion.

A: Shawn talked about combined company benefits and LTL-TL conversion being dependent on spot rates.

Q: Bascome Majors asked about Omni mix and risks.

A: Jamie discussed upside potential in Expedited and risk of further macro deterioration.