Forward Air saw modest improvements on some financial metrics during the first quarter, but pressure from investors is mounting for the company to complete a strategic review of potential options for its business following a controversial merger with Omni Logistics.
Activist investor Ancora Holdings Group, which holds a 4.1% equity stake in the Greeneville, Tennessee-based company, advised shareholders on Wednesday to vote against three of Forward’s directors at the upcoming annual meeting.
A letter said that while both the board and the management team have been somewhat refreshed following the deal’s January 2024 closing, the targeted board members’ “egregious M&A records” and “histories of presiding over massive value destruction” warrant their removal. The letter also said the board had moved “alarmingly slowly” on its review of strategic alternatives, and it questioned the ultimate motives of the process.
Management from the company didn’t provide an update on the review other than to say the process continues and that it has had discussions with interested parties.
“The board and management team are entirely focused on taking deliberate actions to maximize shareholder value,” said Forward CEO Shawn Stewart on a Wednesday evening call with analysts. … “We firmly believe that all of our directors are vital to these efforts.”
Forward (NASDAQ: FWRD) reported a first-quarter net loss from continuing operations of $61 million ($51 million attributable to Forward Air, or $1.68 per share) Wednesday after the market closed. The result included $28 million in one-off expenses related to the merger.
Consolidated revenue of $613 million was up 13% year over year, but the prior-year period didn’t include a full three-month contribution from Omni. (Revenue was off approximately 2% y/y on a pro forma comparison.)
Forward said it plans to start reporting results by mode – ground transportation, air and ocean forwarding, intermodal drayage, and warehousing and value-added services – in the future. It also said it sees a path to double annual revenue to $5 billion over the next five years.
The company previously flagged 10% to 15% of last year’s revenue as being impacted by recent tariff announcements. However, it said on the call that the number is likely under 10% and that the provided range offers a bit of a buffer.
The expedited segment, which includes less-than-truckload operations, reported a 9% y/y revenue decline to $249 million. Tonnage was down 9% while revenue per hundredweight, or yield, increased 2.5% y/y excluding fuel surcharges (up 4% from the fourth quarter). Forward has been focused on increasing shipment weights (up 2% y/y in the quarter) and implementing corrective price actions.
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