Forward Air Corporation

Stand by, your meeting is about to begin. Good afternoon, everyone. Welcome to Ford Air's fourth quarter and full year 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. 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 sound quality. Lastly, if you should require operator assistance, please press star zero at any time. I would now like to turn the call over to Mr. Tony Carino, Senior Vice President of Treasury and Investor Relations. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Welcome to Forward Air's fourth quarter and year-end 2025 earnings conference call. With us this afternoon are Sean Stewart, President and Chief Executive Officer of and Jamie Pearson, Chief Financial Officer. By now, you should have received the press release announcing Forward Air's fourth quarter 2025 results, which was also furnished to the SEC on Form 8K. We have also furnished a slide presentation outlining fourth 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 render release announcement and on this conference call may be considered forward-looking statements. 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, 2026. 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 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 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. I really appreciate your interest in Ford Air Corporation. There are three main topics that I would like to cover on today's call. First, I will provide an update on our strategic alternatives review process. Second, I will review some key achievements in 2025. Third, I will share some thoughts on our 2026 priorities before turning the call over to Jamie. Regarding the strategic review, we have continued to make progress since our last update in November and believe we are nearing the conclusion. As we have said from the onset, this has been an extremely comprehensive review, an incredibly difficult logistics environment and broader economic backdrop, which has contributed to the length of the process. When we have updates to share on the review, we will. Beyond that, we are going to remain focused on operating the company, preparing for the cycle to turn so we can take advantage of when it does and keep today's comments focused on the actual results. With that, let's turn to the second topic. For the full year 2025, we reported consolidated EBITDA, which is calculated pursuant to our credit agreement, of $307 million, compared to $311 million in 2024. As we mentioned last year, we expected the quality of our earnings to continue to improve as historical performance and synergy savings roll off. And that is exactly what has happened. To that point, adjusted EBITDA in 2025 improved $40 million year-over-year to $293 million compared to $253 million in 2024. I am proud of our team for holding serve and focusing on what we can control and delivering these results while actively transforming the company. And in the face of a multi year freight recession, we remain focused on the customer and use this time to completely rebuild the management team, consolidate duplicative real estate and reduce expenses to position the company to take advantage of the tailwinds in the industry when the broader market improves. Operationally, in 2025, we unified our U.S. domestic operations with the creation of our one ground network, aligning our business into a more cohesive, agile, and scalable operating model. This initiative consolidated all U.S. domestic ground operations under a single leadership structure and integrated key service lines, line haul, pickup and delivery, truckload brokerage, and expedited services into one streamlined organization. Importantly, our sales channels will continue to operate independently, delivering the outstanding solutions, service, and customer relationships we always have. At the same time, our operations remain channel agnostic, executing consistently across the platform and delivering best-in-class on-time performance and industry-leading claims results. In 2025, we also unveiled our new Latin America regional structure, marking a significant step in strengthening our global logistics network. This regional platform spans Mexico, Brazil, Peru, Colombia, and Chile, and is anchored by our international freight station in Miami. The Miami Gateway connects Latin America to global markets and enables us to deliver industry-leading import and export security, reliability, and service to our customers. During the year, we completed the corrective pricing actions at the expedited freight segment and shed some unprofitable freight from our network as a result. Following these actions, the improvement in yield along with aligning our cost structure with less volume in the network, this segment's full year reported EBITDA margin improved by 110 basis points from 9.8% in 2024 to 10.9% in 2025. As we move into 2026, we expect the volume declines to begin moderating as we lap the corrective pricing actions. In closing out my comments on 2025, in pursuit of continuing to enhance the transparency of our business, we provided detail on revenue by product, foreshadowing how we plan to go to market and transition away from reporting by legacy and legal reporting structure. During the year, we also provided insight to our revenue by region around the world. More to come as we work out the reporting nuances, but I am extremely excited about this additional transparency. Moving to the third topic, as we enter 2026, Our strategic focus remains on profitable long-term growth through the expansion of synergistic service offerings that enhance customer value and revenue quality. Our growth is contingent upon having the right team in place, including rounding out our leadership team. In late 2025, We added Fabio Mendonicas as the president of Latin America. Fabio brings over 30 years of experience in the business development and operations throughout Latin America and North America. Just last month, we added Joanna Zhu to the leadership team as our president of Asia Pacific. Joanna brings a wealth of knowledge and 34 years of experience to the company, including working with two of the world's largest logistics companies. And most recently, we announced that Lance Sons has joined the company as our new Chief Information Officer. With nearly 30 years of experience, Lance has held progressive leadership roles at a few of the largest tech-forward supply chain companies. I could not be more excited about the talent and industry experience Fabio, Joanna, and Lance bring to the company. I am confident that they will drive growth and success across the global enterprise industry. as we enter 2026. A priority in 2026 is to continue the progress in upgrading our tech stack as part of our broader transformation. A key component of this effort is the One ERP initiative, which will consolidate multiple financial systems into a single, integrated platform. By bringing these systems together, we should achieve standardized reporting, consistent processes, and a single source of financial data driving greater efficiency and effectiveness across the company. The project is planned as a phased rollout with the first phase successfully completed earlier this month and the final phase to be completed by the end of this year. During the year, we also plan to consolidate a very decentralized global HRIS system across multiple countries into one worldwide system. This is a transformative step as we continue to rationalize our IT systems, improve the quality of our data, and decision making. By prioritizing customer service, strong leadership, and careful cost management, we believe we are positioning the company for long-term success. As most of you are aware, we have made a great deal of progress and believe we are well positioned once the freight environment improves. We are optimistic about a recovery and are committed to building on the momentum of our transformation that we have created. With that, I will turn the call over to Jamie to go through the detailed results of the fourth quarter and full year 2025.