Forward Air (FWRD) Increases EBITDA and Lowers Leverage Ratio

Forward Air Corporation has announced updates to its non-GAAP financial measures for the twelve months ended March 31, 2024. The company's Consolidated EBITDA has increased from $300 million to approximately $324 million following the addition of allowable addbacks. This adjustment has resulted in a revised Consolidated First Lien Net Leverage Ratio of 5.1x for the quarter ended March 31, 2024, compared to the previously reported 5.5x.

The company has also stated that it is required to comply with a financial performance covenant under the credit agreement, setting a maximum Consolidated First Lien Net Leverage Ratio of 6.0x beginning with the fiscal quarter ending June 30, 2024. Additionally, Forward Air Corporation has implemented further cost reduction actions that are anticipated to add approximately $20 million of incremental Consolidated EBITDA to the company's second quarter results.

CEO Shawn Stewart emphasized the company's commitment to increased transparency and its aggressive actions to improve profitability, maximize synergy capture, and drive leadership in global supply chain and domestic transportation services. The company is focused on execution and remains optimistic about the opportunities ahead and its long-term growth trajectory.

In terms of financial metrics, the company's LTM Net Income was reported at ($216) million, with Business Dispositions (Final Mile) at ($122) million and Omni Merger Transaction Costs at $199 million. Other factors such as severance, retention, change in fair value, and more contributed $44 million. The Consolidated Net Income was reported at ($95) million, while net interest expense stood at $210 million, taxes at ($2) million, and depreciation and amortization at $111 million. Transaction Expenses, Integration Costs, and Other Normalizing Adjustments added up to $34 million, while cost synergies amounted to $67 million, resulting in the Consolidated EBITDA of $324 million.

As a leading asset-light provider of transportation services across the United States, Canada, and Mexico, Forward Air Corporation offers expedited less-than-truckload services, truckload brokerage services, intermodal services, and a full portfolio of multimodal solutions. Through its subsidiary Omni Logistics, the company provides air, ocean, and ground services for mission-critical freight, positioning itself as more than just a transportation company.

While the press release contained forward-looking statements regarding the company's performance for the second quarter of 2024 and the performance of its initiatives, it also noted that actual events may differ from these expectations as a result of identified risks and uncertainties. The company stated that it assumes no duty to update these statements as of any future date. Today the company's shares have moved -4.8% to a price of $18.92. For the full picture, make sure to review Forward Air's 8-K report.

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