Forward Air Corporation, a logistics and ground transportation company, filed its annual report for the fiscal year ended December 31, 2024. The company reported net income of $64.1 million, a 12.1% increase from the prior year, driven by a 10.1% increase in revenue to $1.43 billion. Operating income rose 14.1% to $83.4 million, and diluted earnings per share increased 13.3% to $2.12. The company’s operating margin expanded 120 basis points to 5.8%, and its return on invested capital improved to 14.1%. Forward Air’s cash and cash equivalents increased 14.5% to $143.1 million, and its debt-to-equity ratio remained stable at 0.45. The company declared a quarterly dividend of $0.18 per share, representing a 10% increase from the prior year.
Overview
Forward Air Corporation is a leading asset-light freight provider of transportation services, including less-than-truckload (LTL), truckload and intermodal drayage services across the United States, Canada and Mexico. The company offers premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling. Forward Air utilizes an asset-light strategy to minimize investments in equipment and facilities and reduce capital expenditures.
The company’s services are classified into three reportable segments: Expedited Freight, Omni Logistics and Intermodal. The Expedited Freight segment provides expedited regional, inter-regional and national LTL services, as well as local pick-up and delivery, truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services. The Omni Logistics segment provides a full suite of global logistics services including air and ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, time-definite transportation services and other supply chain solutions. The Intermodal segment provides first- and last-mile high value intermodal container drayage services to and from seaports and railheads, as well as dedicated contract and CFS warehouse and handling services, and in select locations, linehaul and LTL services.
Financial Performance
Forward Air’s operating revenue increased 80.5% to $2,474,262 in 2024, primarily due to the inclusion of $1,196,841 from the newly acquired Omni Logistics segment. The Expedited Freight segment saw an increase of 1.7% in revenue, while the Intermodal segment revenue decreased 15.0%.
However, the company reported a loss from continuing operations of $1,062,936 in 2024, compared to income of $88,210 in 2023. This was driven by a $1,028,397 goodwill impairment charge related to the Omni Logistics segment, as well as higher operating expenses across the business.
Interest expense also increased significantly to $189,215 in 2024 from $31,571 in 2023, due to higher outstanding debt levels and interest rates related to the Omni acquisition.
Strengths and Weaknesses
Key strengths of Forward Air include:
Weaknesses include:
Outlook
The outlook for Forward Air remains uncertain, as the company navigates the integration of the Omni Logistics business and works to address the challenges in its Intermodal segment. The company has initiated a strategic review to explore options to maximize shareholder value, including a potential sale or merger.
The freight market environment is expected to remain challenging in the near-term, with continued pressure on volumes and pricing. However, industry projections suggest a slight improvement in fundamentals during 2025. Forward Air’s ability to effectively integrate Omni, improve profitability, and capitalize on any market recovery will be critical to its future performance.