Shares of Forward Air were off over 40% in early trading on Friday after the company said it was potentially losing a large customer. It also said a strategic review concluded with “no actionable proposals” being received and that it will now look to only sell parts of the enterprise.
Forward (NASDAQ: FWRD) reported a $34 million net loss (“attributable to Forward Air”), or $1.09 per share, for the first quarter. Consolidated revenue of $582 million was down 5% year over year.
Consolidated adjusted EBITDA of $70 million was 4% lower y/y. Trailing 12 months’ EBITDA totaled $304 million.
During an analyst call on Thursday evening, management revealed that a contract logistics customer representing approximately 10% of Forward’s $2.5 billion annual revenue intends to diversify its logistics partners. The customer indicated the move is part of a broader internal strategy focused on risk management. While Forward has not received formal notice that a wind down will occur, it said any transition wouldn’t happen until next year.
“We believe the customer’s decision is entirely related to their own operation and supplier diversification initiatives and has nothing to do with the exceptional service we provide them during our long-term partnership,” said Shawn Stewart, Forward president and CEO.
The potential customer loss and other factors kept Forward from receiving a reasonable take-private offer. The company announced a strategic review at the beginning of 2025 as pressure from investors mounted following its contested merger with Omni Logistics. Potential outcomes under the initial plan called for the sale of part or all of the enterprise.
It will now look to sell its intermodal unit and two smaller legacy Omni businesses. The segments combined for $394 million in revenue last year. Management said the Omni units could be sold within the next 60 to 90 days, with the intermodal business hopefully being sold by the end of the year. Proceeds from the sales will be used to delever balance sheet.
Q1 by the numbers
The company’s expedited segment, which includes less-than-truckload operations, reported $273 million in revenue, a 9% y/y increase. Tonnage was down 2% as shipments fell 4% and weight per shipment increased 3%. Yield (revenue per hundredweight) dipped 1% y/y, excluding fuel surcharges. The increase in weight was a drag on the yield metric. Revenue per shipment (excluding fuel) was up 2% y/y.
The unit posted a 7.4% operating margin, which was 110 basis points better y/y. A 10.4% EBITDA margin was flat y/y. Purchased transportation expenses (as a percentage of revenue) increased 360 bps y/y.
Omni reported revenue of $302 million, a 7% y/y decline. Adjusted EBITDA of $25 million was 2% lower y/y. The adjusted EBITDA margin improved 40 bps to 8.3%.
Intermodal revenue fell 15% y/y due to a decline in port activity (drayage shipments down 20%). The unit reported a 10.1% EBITDA margin, which was 630 bps lower y/y.
Operating cash flow of $58 million in the first quarter improved by $12 million y/y. Liquidity increased to $402 million, up from $367 million at the end of 2025.
Net debt of $1.65 billion stood at 5.4 times last 12 months’ adjusted EBITDA. The company’s debt leverage covenant steps down 25 bps each quarter to 5.5 times by the fourth quarter.
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