GREENEVILLE, Tenn. - Forward Air (NASDAQ:FWRD) Corporation (NASDAQ:FWRD), an asset-light freight and logistics company with a market capitalization of approximately $966 million, announced today that its Board of Directors is reviewing strategic alternatives to enhance shareholder value. Options being considered include a potential sale, merger, or other financial transaction. The company, which has seen its stock rise over 77% in the past six months according to InvestingPro data, is executing its transformation strategy and reaffirmed its full-year 2024 EBITDA guidance of $300 million to $310 million, up from $221.6 million in the last twelve months.
The Board, led by Independent (LON:IOG) Chairman George Mayes, is evaluating the company's long-term value and has not set a deadline for the strategic review's conclusion. There is no certainty that the review will result in any transaction. Goldman Sachs & Co. LLC and Jones Day are providing financial and legal advice, respectively.
Concurrently, Forward Air has amended its Senior Secured Term Loan Credit Agreement. The amendment includes adjustments to the maximum consolidated first lien net leverage ratio and a reduction in total commitments under the revolving credit facility from $340 million to $300 million. InvestingPro analysis indicates the company operates with a significant debt burden, with a debt-to-equity ratio of 9.24x. CFO Jamie Pierson stated the amendment aims to provide financial flexibility to support the company's ongoing transformation.
As part of its transformation strategy, Forward Air has implemented initial steps to streamline operations, reduce operating expenses, and target an annual savings of approximately $20 million. These measures include workforce reductions, terminal operation consolidations, and decreased reliance on third-party vendors. These savings are in addition to the $75 million in synergies expected from the merger integration, projected to be achieved by the end of the first quarter of 2025.
The company's projected EBITDA for the fiscal year ending December 31, 2024, reflects these cost reductions. Forward Air operates a network providing expedited less-than-truckload services, truckload brokerage, and a suite of multimodal solutions through Omni Logistics.
This strategic review and financial update are based on a press release statement from Forward Air Corporation.
In other recent news, Forward Air Corporation has been experiencing significant changes. Mr. Chris Ruble, the President and Chief Operating Officer, along with Chief People Officer Kyle Mitchin, have left the company, triggering severance packages and restrictive covenants in line with the company's Executive Severance and Change in Control Plan.
Simultaneously, Forward Air has appointed Eric Brandt as the new Chief Commercial Officer, a move aimed at refining the company's sales strategy. This decision follows the underperformance of the Expedited Freight segment due to a volume-focused pricing strategy, despite a substantial 92% increase in Q3 2024 revenue to $656 million, largely attributed to the acquisition of Omni.
In terms of operations, the integration of Omni is progressing as planned, with the company expecting $75 million in annualized savings by early 2025. Additionally, Forward Air expanded its logistics capabilities in Latin America by opening a new warehouse in Miami. However, the company revised its full-year 2024 EBITDA guidance downward to $300-$310 million, citing a subdued macroeconomic environment. These are among the recent developments at Forward Air Corporation.
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