Forward Air missed fourth-quarter expectations Wednesday after the market closed, nonetheless, investors and analysts are likely more interested to listen to updates on financial targets and the brand new management structure following the closing of a messy merger with Omni Logistics.
Forward (NASDAQ: FWRD) finally closed on the acquisition of Omni Logistics last month after it attempted to terminate the deal following legal challenges from shareholders. Because it sought out of the transaction, Forward alleged Omni withheld data and provided unreliable financial projections while Omni maintained it acted in good faith and asked a Delaware court to force the deal to shut. Shortly before the matter was to be settled at trial, the parties reached an agreement.
After the dust settled, the CEOs of each corporations and several other executives from Omni aren’t any longer with the combined entity.
Forward reported adjusted earnings per share of 81 cents for the fourth quarter, which was 70 cents lower 12 months over 12 months (y/y) and 17 cents below the consensus estimate. A headline net loss from continuing operations of $14.7 million included deal-related costs and excluded results from Forward’s final-mile segment, which was sold to Hub Group (NASDAQ: HUBG) in December.
Some earnings forecasts from analysts, nonetheless, may not have considered the corporate’s lowered guidance range of 78 cents to 80 cents.
Consolidated revenue of $338 million was 16% lower y/y. Revenue from its expedited segment, which incorporates less-than-truckload operations, fell 5% to $279 million. Tonnage within the expedited segment increased 6% y/y as shipments fell 4% and weight per shipment was up 11%. Revenue per hundredweight, or yield, was down 8% y/y excluding fuel surcharges.
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A priority with the merger was that the addition of freight forwarder Omni would force a few of Forward’s other forwarding customers, that are competitors to Omni, to hunt capability elsewhere. Nonetheless, Forward interim CEO Michael Hance said in a news release that “volumes from that channel remain strong.”
Hance can also be the corporate’s chief legal officer and secretary. A search committee was formed to search out a brand new CEO after former CEO Tom Schmitt’s departure earlier this month.
Few details were provided regarding the combination in the discharge but the corporate said it has already folded Omni’s linehaul operations into the Forward network.
“On January 25, 2024, we closed on the acquisition of Omni Logistics, positioning the combined entity to be the premier provider of selection for mission-critical freight transportation to a bigger customer base with an expanded footprint,” Hance said. “As I actually have gotten to know our recent teammates from Omni Logistics, it is evident to me that Forward and Omni share a typical DNA focused on the delivery of wonderful customer experience.”
Forward said it was temporarily discontinuing earnings guidance “on account of the on-going integration of Omni Logistics, which we began executing on three weeks ago,” Forward Chief Financial Officer Rebecca Garbrick stated.
The corporate also suspended its 24-cent quarterly dividend while it attempts to lower leverage after issuing $1.8 billion in debt to fund the transaction.
Shares of FWRD were off 10.6% in after-hours trading Wednesday.
Forward will hold a call at 9 a.m. EST Thursday to debate results with analysts.
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