Forward Air Corporation Q1 FY2026 earnings call

1. Customer transition: In discussions with a large customer to transition a significant portion of business, majority to start in early 2027. 2. Strategic review: Board initiated strategic alternatives review, now pivoting to sell non-core assets including intermodal segment and two smaller legacy Omni businesses totaling ~$394 million of 2025 revenue. 3. Quarterly results: Operating income $20 million in first quarter 2026 compared to $5 million last year; consolidated EBITDA $70 million compared to $73 million a year ago. 4. Logistics market: Domestic transportation supply tightened, early indicators suggest industrial economy may be approaching inflection point, truckload spot rates and tender rejection rates increased, but macroeconomic risks remain. 5. Awards: Forward Air named 2026 Surface Carrier of the Year by Air Forwarders Association and to Newsweek's list of most trustworthy companies in America 2026.

Expedited Freight: reported EBITDA improved to $28 million compared to $26 million a year ago with a margin of 10.4%; sequentially improved from $25 million in the fourth quarter of 2025. Omni Logistics: reported EBITDA of $25 million in the first quarter of 2026, in line with $26 million a year ago; margin improved from 8.3% to 7.9% due to increase in contract logistics volume. Intermodal: reported EBITDA and margin were $5 million and 10.1% respectively in the first quarter of 2026, compared to $10 million and 16.4% a year ago; facing challenging market with reduced port activities and international trade-related softness.

1. Regarding customer transition: Majority of business transition to start in early 2027 and take place throughout the balance of the year. 2. Regarding strategic review: Anticipate to close sale of two smaller legacy Omni businesses in next 60 - 90 days, and sell intermodal business by end of the year. 3. On freight demand: Cautiously optimistic about improvements, but need to see if improvement is sustainable with various cross-currents.

1. Customer transition: Uncertainty regarding amount and timing of business transition, and potential impact on the company. 2. Market: Macroeconomic risks such as ongoing geopolitical tensions in the Middle East leading to rise in fuel prices, which could pressure manufacturers and consumers, compressing margins and dampening demand. 3. Strategic review: Uncertainty regarding success of selling non-core assets and impact on shareholder value.

Q: Touch on customer loss or transition, details on segment, margin profile, fixed costs and flexing down.

A: Sean and Jamie state it's diverse, in contract logistics and transportation, margins different, still in conversation, fluid.

Q: Strategic review timeline and details.

A: Jamie says small proceeds from two smaller legacy Omni businesses in 60 - 90 days, intermodal by end of year.

Q: Customer transition timing and retention.

A: Jamie says dialogue active, constructive, no impact in 2026, until early 2027.

Q: Ongoing pricing environment.

A: Sean says confident in pricing, strong in revenue strains.

Q: Business trends, tonnage, yields.

A: Jamie says saw strong volume environment last couple of weeks of the quarter.

Q: Customer loss, profitability of sold businesses, intermodal business details.

A: Jamie says sold business is $390 million, two smaller Omni businesses confidential, intermodal is port and railhead drayage with owner-operators and owned/leased chassis.

Q: Customer loss and leverage metrics.

A: Jamie says ended quarter with $40 million cushion and over $400 million in liquidity.

Q: Customer loss, Amazon announcement relation, pricing for retained business.

A: Sean says no correlation with Amazon, will price strategically in given customer or origin destination pair.

Q: Customer loss details, margin profile if lost, truckload to LTL conversions.

A: Chris is told customer loss is 2025 total revenue of $250 million, not losing all, no info on margin profile if lost, and heard of truckload to LPL conversions but no enough info to confirm