Forward Air Corporation

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Welcome to the Forward Air third quarter 2025 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 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. So others can hear your questions clearly, we ask that you pick up your handset for best down quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Tony Carino, Senior Vice President of Treasury and Investor Relations.

Thank you, operator, and good afternoon, everyone. Welcome to Forward Air's third quarter 2025 earnings conference call. With us this afternoon are Sean Stewart, Chief Executive Officer, and Jamie Pearson, Chief Financial Officer. By now, you should have received the press release announcing Forward Air's third quarter 2025 results, which was also furnished to the SEC on Form 8K. We have also furnished a slide presentation outlining third quarter 2025 earnings highlights and a business update. Both the press release and slide presentation for this call are accessible on the investor relations section of Forward Air's website at forwardair.com. Please be aware that certain statements in the company's range of 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, and other matters that are not historical facts, including statements regarding our fiscal year 2025. 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 SEC in the press release and slide 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 advance or otherwise, unless required by law. During the call, there may also be a discussion of financial metrics that do not conform to US 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 directly comparable GAAP measures are included in today's press release and slide presentation. I will now turn the call over to Sean.

Good afternoon, everyone, and thank you for joining us. Today, there are three main topics that I'd like to cover. First, I will provide an update on our strategic alternatives review process. Second, I will provide an update on the progress we are making on our transformational journey. And I will close with a few comments on the third quarter results before turning the call over to Jamie. Beginning with the strategic alternatives review, We are aware of the rumors in the market over the last several months. I want to be clear that the strategic alternatives review process is ongoing. I also want to acknowledge the length of the process today and emphasize a few critical points. Over the course of this review, we have had discussions with multiple interested parties and discussions are continuing. We conducted appropriate proactive outreach to interested parties Along the way, other parties have also initiated dialogue with us at different points in time. Obviously, we welcomed inbound inquiries, the timing of which was out of our control and has contributed in part to the length of this review. The review to date has been a thorough and inclusive process to explore all available opportunities to maximize value. The process has and continues to include the evaluation of a potential sale, merger, or other strategic or financial transactions relative to the long-term value potential of the company on a standalone basis, as well as a review of the components of our portfolio to ensure there is a long-term strategic fit. Our board is taking the time it needs to be methodical, thoughtful, and comprehensive to ensure that we pursue the best possible outcome for the company and all of our shareholders. With all that said, we do not intend to disclose further developments relating to the process until we determine an update to be appropriate or necessary, and when we do, we will let you know. Our policy is not to comment on rumors and that will continue to be our policy. On a commercial and leadership basis, the good news is that we did not recognize at the outset is how much this process would bring our team together. We are more aligned and more in tune and more connected beyond what I would have ever thought. And as you will see when Jamie previews the results, we are focused on running the business and are continuing to deliver positive period over year results in one of the most challenging markets in years. As for my second point and our continued transformation, I am pleased that we are also continuing to execute our plan to become a unified company as discussed on previous calls. Over the past several quarters, As we work to transform the operations of our U.S. and Canadian businesses, we have focused on a clear and strategic goal, which was to unify our operations under a new regional structure and harmonizing our blueprint. The goal laid the foundation for the creation of our One Ground Network, a positive step forward in aligning our business for the long-term success under a single leader. Tim Osborne, President of U.S. and Canada Operations. The One Ground Network brings together the operations of our businesses to form a more cohesive and agile organization. It includes the unification of our U.S. domestic ground operations and brings together key service lines, line haul, pickup and delivery, truckload brokerage, and expedited services into a single streamlined structure. By doing so, we are removing silos, simplifying how we work, and unlocking new efficiencies. However, it is important to note that we expect our sales channels to continue to function separately, providing the same solutions and service that they always have, while our operations remain fully agnostic across the network, delivering the same best-in-class, on-time service and one, if not the best, industry claims results. Our team handles every shipment with the same discipline, precision, and care, keeping our focus where it belongs, on service-sensitive freight and operations excellence. For our customers, it means the same seamless and reliable experience that they have been accustomed to and expect from us. For our employees, it means clear priorities enhance collaboration, and more opportunities to grow within a connected network. For our business and future results, it positions us to accelerate and leverage growth. We are also continuing to rationalize our tech stack, including upgrading and minimizing the number of systems across the company. We expect these changes to enhance efficiencies, improve real-time data-driven decisions, and drive cost savings as a result. Regarding the quarterly financial results, we reported a consolidated EBITDA, which is calculated pursuant to our credit agreement, of $78 million, in line with the $77 million reported in the second quarter of this year. I am extremely proud of our team for focusing on what they can control and delivering a solid quarter as we navigate through an extended freight recession, a strategic alternatives process, and continued transformation of the company. We are focused on delivering industry-leading quality of service with our world-class leaders while tightly managing cost and prudently managing the business. We are optimistic that market conditions will eventually rebound, and our focus is on continuing the progress we have made over the past year and keeping that momentum over the long term. With that, I will now turn the call over to Jamie to go through the detailed results for the third quarter.

Thanks, Sean, and good afternoon, everyone. As you heard from Sean, we reported consolidated EBITDA of $78 million in the quarter. The third quarter and LTM results were favorably impacted by cost reduction initiatives that we enacted equating to approximately $12 million on an annualized basis. The initiatives primarily included right-sizing our business to align with the current freight demand and on our ongoing transformation strategy that Sean discussed earlier. On an adjusted EBITDA basis, we are cranking out very consistent performance. reporting 75 million in the third quarter of this year compared to 74 million in the second quarter of this year and 76 in the third quarter of last year. At the expedited freight segment, third quarter reported EBITDA was 30 million with a margin of 11.5%. The margin is the second highest since the fourth quarter of 2023 and is in line with the 30 million reported EBITDA and 11.6% margin in the second quarter of this year. In the third quarter a year ago, reported EBITDA was also 30 million with a margin of 10.4%. Despite a challenging freight environment and a decline in tonnage, we have significantly improved pricing programs and actively managed discretionary expenses. Our focus has been on maintaining the right freight mix in our network at optimal prices, which has resulted in an improvement in reported EBITDA as it has grown from 18 million in the fourth quarter of 2024 to 30 million in both the second and the third quarters of 2025. And the margin has improved from 6.6% to 11.6 and 11.5% respectively. At the Omni logistics segment, we're excited with the steady progress that we're seeing. In the third quarter, we achieved the highest revenue and reported EBITDA, excluding the impact of goodwill since the transaction in the first quarter of last year. Sequentially, from the second quarter to the third quarter of this year, revenue increased by $12 million to $340 million, and reported EBITDA increased from $30 million to $33 million. The margin also improved sequentially by 60 basis points to 9.6%. On a year-over-year basis, reported EBITDA improved from $27 million in the third quarter last year compared to $33 million this year, which is a 22% increase. The margin also improved by 160 basis points up from 8%. Relative to the challenges in the broader market and especially port activity, the intermodal segment and the DRAGE business we service continues to deliver solid results. This management team perseveres and performs well in both good and challenging market environments. In my opinion, they are the best team in the DRAGE space. In the third quarter, this segment reported EBITDA of $8 million, which was in line with the $9 million in the second quarter of this year and the third quarter a year ago. Rolling up all of the segments and on an LTM basis, consolidated EBITDA was $299 million. As usual, we have detailed the information used to reconcile the adjusted and consolidated EBITDA results on slide 31 of the presentation. And as a quick heads up regarding consolidated EBITDA for the prior three quarters, you will see that we have adjusted the previously reported amount by the actions we took in the third quarter to improve our cost structure. The credit agreement allows for the inclusion of unrealized and pro forma savings from these actions to be included in our historical consolidated EBITDA and requires that they be spread back in time to the period in which the expense would have occurred. As such, we appropriately adjusted the prior quarters to reflect the impacts of the cost savings. If you would, please reference page 12 in the slide presentation issued today, and you will be able to see what we reported in the past and updated for the most recent cost-out and pro forma actions. Turning to cash flow, cash and liquidity, we reported $53 million in cash provided by operations in the third quarter. which is a $2 million increase compared to the 51 million in cash provided by operations a year ago. For the first three quarters of 2025, we've reported 67 million of cash provided by operations, which is a $113 million improvement compared to the same period a year ago. As for liquidity, We ended the third quarter with 413 million in total liquidity comprised of 140 million in cash and 273 million in availability under the revolver. This is a $45 million increase compared to the 368 million at the end of the second quarter. And as usual, I'd like to leave you with a few additional thoughts for the quarter. The first of which is, as you've heard from Sean in his opening remarks, we are making progress upgrading our tech stack as a part of the broader transformation. This includes the one ERP initiative to move from multiple ERP systems to one. This project will unite all company financial systems on a single streamlined platform. With all financial data in one place, standardized reporting and uniform processes, we expect our team will be more efficient and more effective. The project will have a phase rollout and with a completion expected by the end of next year. Point two, in a tough market, we continue our focus on controlling expenses and adjusting to demand by right-sizing our cost structure commensurate with the support needed to continue serving our customers at the highest level and the level they are accustomed to receiving from us. It is important to note that the focus on our cost structure did not impact our service levels and still led to another solid quarter and sequential improvement in consolidated EBITDA. The final point is prioritization and focus on cash generation. As you heard earlier, cash provided by operations significantly improved by more than $100 million in the first nine months of this year compared to a year ago. On slide 23 of the earnings presentation, you will see that on a non-GAAP basis, we generated $79 million in operating cash flow in the third quarter and $176 million year-to-date through the third quarter. I will now pass the mic back to Sean for closing comments before Q&A.

Thank you, Jamie. In closing, I want to express my deep pride in our team for their unwavering dedication and consistent focus on the customer. Their ability to execute operationally with precision while maintaining rigorous control over cost has been truly exceptional. This disciplined approach not only strengthens our day-to-day performance, but also positions us well for the challenges and opportunities ahead. Despite the uncertainty in today's macroeconomic environment, I remain confident in the strength of our team. We have built a solid foundation that is well-equipped to drive sustainable long-term growth. Our team's commitment to excellence ensures that we continue to deliver meaningful and measurable value to our customers and our position very well for when the freight stabilizes. As we go into Q&A, I would like to focus our comments on the state of the industry, the business, and not on the strategic alternatives review process. As you know, we cannot further comment. Thanks in advance for your understanding. I will now turn the call over to the operator to take questions. Operator?

The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Thank you. Our first question comes from Bruce Chan with Stifel. Please go ahead.

Hey, good afternoon, guys. Thanks for the question here. Maybe just wanted to start with Omni. That business has certainly come a long way, and it looks like you're finding some stability here with EBITDA margins. But the segment has also gone through a lot of change, especially given the volatile environment. So maybe as you think about that business longer term, if you could just remind us what your longer-term margin targets would be there, what kind of earnings power you think you can see in that business, and then how do you maybe think about that in the context of seasonality as we move into Q4 in 2026?

Hey, Bruce, it's Sean. Good afternoon. So, yeah, I would say we've done a really good job of turning this business around, really driving the synergy selling where we had segments of customers' revenue in one of our many diversified offerings and spreading that more into the other offerings. And that's really where the growth is coming from. I would say, you know, it's rather hard to say right now what that optimal margin is because it's suppressed right now just because of the overall market. But, you know, Jamie, you want to comment at all on margins?

Yeah. If you look at page 28 in the slide deck, one of my favorite pages because it has a couple of different interpretations. I'm going to go right to left. And I'm going to answer your question on Omni specifically, because that's what you're asking. If you look at the intermodal, the Dre business continues to be at the highest end of the publicly traded peers. I mean, and there is no peer comp. We all know that. But they continue to be a market leader in terms of margin in the intermodal side. And then on the Omni, we've got a collection here of five comps. You've already done the analysis. You know who they are. But we're at the upper end of the margin already in our collection of assets. And the real upside is on the LTL, the expedited side of the business. So that's where I'd say the greatest opportunity is. And the one thing that I think is lost here on this page, even talking to you specifically or answering your question specifically on Omni, is that when you – by one share of stock in Ford air, you're buying a portfolio or a collection of logistic assets. And Omni is, but one of those, and it actually is performing very well, especially on the contract logistics side of the equation. So I think we've exceeded in my opinion, many different people out there can argue with me, but I think we've exceeded most people's expectations in a way that this particular segment has performed since the acquisition. So I'd say that's an incredibly long-winded answer to your question that we're at the upper end of the margins already. No, that's a really good color. So I guess if I could just follow up on that, it sounds like we're at the point now where we can start to think about, you know, maybe some more seasonality in, you know, this business and other businesses. And, you know, if I could expand on that a little bit, you know, any kind of commentary on how you're thinking about fourth quarter? You know, I know you all tend to have a little bit more retail exposure, for example, than some of your peers. Yeah. So are you talking about Omni specifically or the portfolio? Yeah. First part Omni. And then, you know, if you want to brought that up to the, to the rest of the portfolio. Yeah. So if you look at Omni, it's not going to be as seasonal as I think you would otherwise, uh, would surmise that it would be only because of the warehouse side of the business. Right. So that that's a pretty stable business. Uh, it doesn't have a real seasonal trend to it as much as it does the air in the ocean. I'm looking forward, Bruce, to the day soon, in the next probably a couple of quarters, that we're going to be able to break those segments into their different services. But I'll tell you right now, on the Omni basis, it's going to be a little bit more muted than you would otherwise anticipate because it doesn't have that seasonality. Now, on intermodal, If you see the port volumes as they're forecasted in the next three months, by month, it's going to be a continued, what I would say, malaise. Not a great port read, but I'll tell you what, this team continues to stroke out $8 to $10 million in EBITDA every single quarter, irrespective of the environment in which they operate. And then lastly, on the LTL side, what we're noticing is no different than what our peers, our competitors said on their calls, is more of the same of what we have right now. I'm not seeing a seasonal leg down, nor am I seeing what's not going to be increasing, obviously, now in November being the 18-day month. But I'm seeing more of what we've experienced over the last couple of quarters. Hey, great. Thanks for the call.

Our next question comes from the line of Stephanie Moore with Jefferies. Please go ahead.

Hi. Good afternoon. Thank you. Hey, Seth. I wanted to follow up. Hey, there. I wanted to follow up on the LTL side. Look, I think in previous calls and in our conversations, you've talked a lot about really fine-tuning the organization on the LTL front and really just getting I guess, adjusting operating costs to revenue, and it clearly remains a really weak environment. So maybe you could give us a little bit of an update on the progress on kind of realigning costs and, you know, maybe kind of bifurcate, you know, what's just in a function of this is a weak environment and what is something that we think is sustainable that, you know, really speaks to the actions that you've made over the last year. Thanks.

Hey, Stephanie, Sean. So I'll take the first part of that and let Jamie add in. So You know, the one thing that, especially to our peer group on comps, the one thing that we want to make sure to constantly remind the analyst especially is that we are not a fixed cost network. We're a variable cost network. The majority of our fleet is on our operators. And so one of the things that the team does extremely well is they adjust their purchase transportation cost based on volume. So when volume's down, mainly what we do is we move those drivers from the LTL segment to the truckload segment. And right now truckload is booming. And so we're not letting go of any drivers. We're just moving them from LTL to TL. And we've really capitalized by doing so. And so that brings down the purchase transportation cost. And then a couple of internal initiatives that we've done is obviously we've dramatically improved through the operating team our productivity measures on the floor, as well as we've introduced and we've been running for several quarters now two different optimizers looking at the miles that we run and the service that we offer and how do we do that with less miles and still not jeopardizing our service. And Tim and team have now decided on one optimizing tool that we will use moving forward. It's not a tool that was here at least when I got here, And they've done a fantastic job. So that's more of not just removing the drivers from LTL over to TO, but at the same time drawing down miles and being more optimal as we manage through this time. But it's something you should do anyways, even in high seasons as well as these low seasons. So hopefully that helps. But I'll be quiet and see if you have any questions to what I just said.

Hey, Seth, let me add on it real quick with a little bit more specificity. If you think about it on a year-over-year basis, in terms of improved operating performance, we took out a little more than 300 STEs on a year-over-year basis. And over that same period of time, we actually improved safety, arguably improved quality, held claims flat at one of the best rates in the entire industry, and we have fewer labor hours per shipment. So operationally, pretty damn good. And then to build on Sean's point about it being more of a variable versus a fixed solution, certainly helps us flex down in times such as this. But if you look at page 13 of the earnings presentation, on a reported basis, even though we've got a slightly lower revenue, we're still cranking out $30 million in reported EBITDA and a mid-11% EBITDA margin.

Yes, no, absolutely. And I think, and Sean, I think that's, that's crystal clear. Maybe just as a follow up question, you know, I appreciate that you really can't and don't want to speak on terms of anything on the process or the likes, but you know, maybe ask a different way. Is there any update on when you might be able to speak on the, on the process?

I would say Steph, if I had that, I would. So, um, look, it's a, it's a very, um, detailed process that the board is running. And as soon as we can, we will update you.

Thanks, guys. Appreciate it, as always.

Thank you.

Once again, if you do have a question, you may press star 1 on your telephone keypad at this time. Our next question comes from Scott Group with Wolf Research. Please go ahead.

Hey, thanks. Afternoon. So I just want to I know you can't say much, but I just want to make sure I'm understanding what you were trying to communicate in your prepared comments about the duration of this process is the point you were trying to make that not that there is a lack of interest or the interest was dropping. It's that there was incremental new interest and that is what's slowing down the process. Is that the point you were trying to make?

So Scott or Sean, um, no, I think it was pretty clear in the points I was trying to make. Um, um, there was a, there was a, uh, a good interest, uh, obviously in our organization and whereas different periods of times were interested parties came in. I don't, I'm not blaming, um, wholeheartedly that that's what's elongated it. But between interested parties and other parties coming in at different times is where we are today.

Okay. You made a comment a minute ago that truckload is booming. I had not heard that from anyone. And then, Jamie, you made a comment LTL is not really stable and not really dropping off. And, you know, a lot of the other guys have talked about LTL really dropping off. So those were just two interesting comments I haven't Heard from others, so maybe if you could just add some color to those two things.

Well, to be clear, our truckload is booming. There's a lot of high-tech moving, and that high-tech requires asset-only companies, of which we are, and a lot of security, and that is something that we're really great at. And so our truckload is booming.

Yeah, I'd even say that's the circle of lifestyle for us. So when I say LTL is stable, volume is down, but that volume is being, modality is shifting from LTL to TL. So we're picking up some of the volume that we're losing on the LTL side on the TL side of the house to support Sean's statement. And then in terms of LTL being stable, look, I'm not trying to say that our volume is stable. That's not what I'm saying. It's clearly not. Volume is down, but there's two other things that we're doing in order to deliver stable earnings, and that is an increase in pricing and an absolute maniacal focus on operating more efficiently. So the stability of my comment is more on the $30 million reported EBITDA for last quarter, this quarter, and the quarter a year ago.

Okay. And then maybe just lastly, Jamie, just give us an update how you're thinking about cash flow going forward into Q4. I know seasonally there's the interest ramp in the debt payments. And then just remind us the calendar of when the credit, the covenants start to get a little tougher.

Yes, you're all over it. So the semi-annual Senior Secured Note payments gets made in April and October. So, you know, the quarter that is in between is when we make all the money and then we generally lose a little bit in the quarter that we make that payment. We're just going to make more in the quarter that we don't, and it's exactly what we did this quarter. I'd say we did very well in terms of not only managing the operations but also managing the balance sheet, which then increased cash by $45 million this quarter at a standalone period. And then in terms of the covenant step down, we're at 675 this quarter. Next quarter, it starts to tighten by a quarter of a turn and does so every single quarter until the fourth quarter of 2026, at what point it levels out at five and a half times and it stays there through maturity.

Okay. Thank you, guys. Appreciate it.

Thanks, Scott. Good talking to you.

Our next question comes from Christopher Coon with Benchmark. Please go ahead.

Hi, good afternoon, Sean, Jamie. Thanks for the question.

I think in the past you've talked about the benefit of the combined company and given us some examples. I'm just wondering if you have an update on that.

Run that past me one more time, Chris. Sorry.

Yeah, I think in the past you talked about winning business as a combined company with Omni and the LTL business and some of the other businesses within Omni. So I don't know if, you know, obviously you still feel that way, but if you have any sort of thoughts on that.

Yeah, I mean, look, on the Omni side, we win business regardless. And obviously, we want to put that into the, I'll say, the legacy forwarder LTL. But, you know, if there's a solution that's better, you know, to get it to gain that business, then outside of our network, we'll gain the business on the Omni side. But I would say in a lion's share, we put the majority of, if it's a ground or a domestic sale only, we really focus on if we can't find a way initially to get in the network, we figure out a way eventually to put it in the network. So the combination of the two organizations really support the growth of But at the same time, we're still able to handle the legacy, what we call the indirect market, with our fantastic freight forwarders and 3PLs. and do that in a proper mannerism to help them continue to grow with very minimal to none of conflict between our organizations. I'm not going to say there's none, but there's very minimal, and we manage those through our partners. So it's working, and it's working well, and I'm really pleased with... with what we are able to do as a combined company, especially compared to the onset of everybody thought this was going to be a disaster, at least when I got here. So I think we're in a good place.

And then I think you talked about the LTL to TL conversion. I mean, obviously, any updates on that? Is that still going on? I guess what do we need is the TL spot prices to start going back up to get that reversed.

Yeah, you've got a couple of things there that we need the spot rate to go up. The team moves our assets LTL, TL back and forth depending on volumes in LTL and depending on need on the TL side. And so that's a pretty constant move back and forth on a weekly or daily basis. um but yes going back to you know when you look at overall volumes with the spot market the way it is as low as it is when you look at ltl volumes they're in the truckload capacity and if if an organization is able to trap and put it in a truckload at a lower per pound rate basis than a traditional lto whether it be us or anybody else that's what they're doing but as that rate moves up that shift from tl will start to slowly come back into ltl and um that's really what we that's the majority of where the volume is today that's not in ltl today jamie you want to so you think that that shift occurs over time it's not like it takes it takes a while for them to go back from tl to ltl or but it just depends on it just depends on what their procure rate is and the longevity of that contract with those uh truckload providers

Yeah, I would actually say it's not an event. Yeah, it's not a one-time event. It's over time. Yeah. So if you look at the cash and the cash index being, you know, $1.25 a mile, you know, it would probably have to creep back up over to the $1.50 a mile before you see something meaningful. But it's going to happen along the way. Anything above $1.50 to $1.60 per mile on the cash, I would say, is getting back to what I would term is a more normalized, balanced LTL market. Got it. Helpful. Thank you so much. Thanks, Chris.

Our next question comes from Bascom Majors with Susquehanna. Please go ahead.

Thanks for taking my questions. Wanted to go to the mixed detail that you kind of broke out for us a bit more functionally earlier this year on slide seven. I mean, that's 2024. I know we can do some of this with your reported revenues, but we don't have a lot of breakdown on Omni. If we looked at that 70-12-9-9 split you laid out for 24, how would that look different today for kind of where we're actually in 25 as we think about the business and sort of cyclical views into 26?

Yeah, we don't, Bascom, to be direct. We pick this as a point in time to give an indication or tip of the hat Well, we're going to start reporting the business in 2026. So, you know, it's more of a lift than you would ever imagine. But this is how we intend to report the business starting next year. But in terms of how that, you know, changed since, you know, last year. I wouldn't say meaningfully, but it does change. It changes every single day. But it's a $2.5 billion battleship. So it would have to take a seismic change to move these numbers materially.

Maybe if I ask you just directionally another way, within Omni, has the air and ocean side of the business, from a profit perspective, outgrown or undergrown the warehousing and value-added piece?

Yeah, we don't break out that level of detail. At least today we don't. You will see it next year in the little detail that you want. Right now we consider all three of those still in a single segment.

I know you're asking that, but I'm not saying it.

No, understood. And as we look into next year and kind of think about the business, just directionally from your opportunity to – improve the bottom line further versus, you know, either cyclical or other risks you want to flag like, you know, what are the one or two biggest upside potential drivers that you see for EBITDA in the next year and the one or two biggest risk across the entire portfolio?

Thank you. You want me to go first? Yeah, go ahead. Yeah. So in terms of the biggest upside right now is just operating leverage in the expedited segment. Whether that be in the form of additional volume or price, I'm not going to say that I'm indifferent because I am very different. I'd rather have the price than the volume. But right now, we've got this network at a level that any incremental shipment, just one shipment, has a disproportionate positive impact to the bottom line. So I'd say that's going to be just increased density on the expedited side. And then on the downside, man, this is, I don't want to say that we've been operating in this environment for the last three years, but we've been operating in this environment for the last three years. If you think about, you know, ISM, you know, below 50 for the last 34 out of 36 months, tonnage in the space is down 21 out of 22 months, and cast is negative for 33 months. That's about three years, any way you want to slice and dice it. So I think that we are bound, at least from my perspective, the bottom. Can it get worse? Absolutely, it can always get worse. So I guess the biggest risk is going to be further macro deterioration. And if that happens or not, Bascom, you know better than I do. Thank you.

It appears there are no further questions at this time. Let me turn it over to Mr. Stewart for any final remarks.

All right. Thank you, Angela. Listen, we really appreciate your interest and support. We remain extremely confident in our strategy and look forward to updating you at the next quarterly earnings call. If you have any questions, please follow up directly with Tony, and we'll look forward to talking to you soon. Take care.

This concludes today's Forward Air third quarter 2025 earnings conference call. Please disconnect your line at this time and have a wonderful day.