Forward Air Corporation

Please stand by, we're about to begin. Ladies and gentlemen, thank you for standing by and welcome to the Forward Air second quarter 2024 earnings conference call. At this time, all participants have been placed on a listen only mode and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. So others can hear your questions clearly, we ask that you please pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Mr. Tony Carreno, Senior Vice President of Treasury and Investor Relations. Mr. Carreno, please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Welcome to Florida Air's second quarter 2024 earnings conference call. Before we begin, I'd like to point out that both the press release and webcast presentation for this call are accessible on the investor relations section of Forward Air's website at forwardair.com. With us this afternoon are Shawn Stewart, Chief Executive Officer, and Jamie Pierson, Chief Financial Officer. By now, you should have received the press release announcing Forward Air's second quarter 2024 results, which was also furnished to the SEC on Form 8K. We have also filed a slide presentation outlining the second quarter 2024 earnings highlights and a business update. Please be aware that certain statements in the company's earnings release announcement and on this conference call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes statements which are based on expectations, intentions, and projections regarding the company's future performance, anticipated events or trends in other matters that are not historical facts, including statements regarding our fiscal year 2024. These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information concerning these risks and factors, please refer to our filings with the Securities and Exchange Commission and the press release and webcast presentation relating to this earnings call. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this call. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. During the call, there may also be a discussion of financial metrics that do not conform to U.S. generally accepted accounting principles or GAAP. Management uses non-GAAP measures internally to understand, manage, and evaluate our business and make operating decisions. Definitions and reconciliations of these non-GAAP measures to their most direct comparable GAAP measures are included in today's press release and webcast presentation. I will now turn the call over to Shawn.

Thank you, Tony, and good afternoon, everyone. Thank you for joining the call today. I would like to start by reiterating my excitement about the opportunity that lies ahead of us. We are in the nascent stages of taking two good companies and making them great as a single unified global logistics enterprise. We are building on their individual strengths and leveraging our global freight forwarding capabilities of the legacy Omni entities while continuing our best-in-class domestic expedited LTL truckload and intermodal offerings. Those legacy strengths are many. and I am proud to share that we are being recognized by objective third parties. For the fourth consecutive year, Ford has been recognized by Inbound Logistics Magazine as a top 100 third party logistics provider and our Omni team in Asia was honored with an award from Serious Logic in recognition of the longstanding partnership, best in class customer service and impeccable inventory accuracy we provide. I'm incredibly proud of our associates who make our customers their first priority and treat them as an extension of our own family. It is because of them that we are able to receive such awards and retain and grow our customer base. Shifting gears for a second, I wanted to address some more holistic and strategic items before turning the call over to Jamie to report on the quarter's results. First of all, The integration is progressing as planned and delivering the synergies and the cost savings as originally anticipated. The transaction closed a little over six months ago and since that time we have actioned certain initiatives. We expect these initiatives will reduce our operating expenses as well as reduce our real estate footprint and employee headcount. thus improving our operating leverage which is expected to position us very well when the freight market returns to normal or improves from the current levels. In terms of timing, we have already actioned all vital activities and expect to be at a full run rate savings basis by the end of the first quarter 2025. Secondly, I want to discuss the undue concern over customer attrition. Did we lose some volume prior to and immediately after the transaction closed? Yes, we did. Very few, if any, companies in the world can go through a complex integration like the one we did and not experience some disruption. However, we have spoken to many of these customers and clarified our continued commitment to them which aligns with our strategy. We have seen some of those volumes already return. We believe the service we provide will be the ultimate driver of customer retention and growth. And everyone on this call, as well as our customers, are aware of the level of service this company has and continues to provide. To that end, we are starting to see the power of the synergy of our combined capabilities. Customers continue to see the value in the combination of our air import service paired with our LTL network. We mentioned this last quarter. Another recent customer win stemmed from our ability to offer contract logistics warehousing LTL truckload service in combination. We do not believe that this would have been possible prior to the OMNI acquisition. Thirdly, going forward, We will be transforming from two separate companies to a product-focused and operations-driven company. We will be going to market on an incredibly focused vertical basis in ground, air, ocean, contract logistics, and customs brokerage services. Transforming two multi-billion dollar companies with almost 7,000 employees does not occur overnight. but my years of experience in this industry leads me to believe that building trustworthy relationships, customizing best-in-class solutions and offering competitive pricing with great on-time service is what customer wants and that's what we intend to give them. We expect to enter 2025 as one unified company having actioned all necessary activities to take advantage of the combined company strength and having harmonized the cultures of two very successful and proud companies. Going forward, we will share the same goals, same mission, values and above all, an employee base that shares the same focus on customer experiences that are best in the industry. We still have a lot of work to do, like harmonizing of IT systems, business rules, Benefit plans, compensation plans, none of which I take lightly and certainly not easy. But the most important, we intend to have our operations fully integrated with one exception. Our ground LTL will stay neutral as we remain an open network supporting our 3PL and freight forwarder customer base. This will allow us to take full advantage of our combined operational earning power by the end of the first quarter in 2025. In closing, in the first call, I was asked why I joined Ford. Today, I am more resolute in my decision than I was even three months ago. I believe in the combined power of this company. That is not to say that there will not be setbacks along the way. because there will be. But rather, the difficulty should be worth the effort, and I am excited about where we are heading. Another reason for my excitement is attributable to the arrival of Jamie, whose collective experience is helping me lead and drive the organization currently and into the future. With that, I will give some closing comments at the end, but I will turn it over to Jamie to go through the results for the quarter.