Forward Air Corporation (NASDAQ:FWRD), a $1 billion market cap freight and cargo transportation arrangement company currently trading at $34.85, announced amendments to its Executive Severance and Change in Control Plan. The Compensation Committee of the Board of Directors approved the changes on January 14, 2025, which will take effect a year later on January 14, 2026. According to InvestingPro data, the company operates with a significant debt burden, with a debt-to-equity ratio of 9.24x.
The amendments include a reduction in the notice period required for the company to inform participants of any adverse changes to the Severance Plan. Previously, a twelve-month notice was mandatory; however, this has now been shortened to sixty days. Furthermore, the plan will no longer provide participants with a pro-rata annual incentive for the fiscal year if their termination occurs within that period.
In other recent news, Forward Air Corporation is exploring strategic alternatives including a potential sale, merger, or other financial transaction, and has also revised its loan terms. The freight and logistics company's Board of Directors have not set a deadline for the conclusion of this strategic review, with Goldman Sachs & Co. LLC and Jones Day providing financial and legal advice, respectively.
As part of this process, Forward Air has amended its Senior Secured Term Loan Credit Agreement, reducing total commitments under the revolving credit facility from $340 million to $300 million.
In addition, the company has seen executive changes with the departure of President and Chief Operating Officer, Chris Ruble, and Chief People Officer, Kyle Mitchin. Both departures have triggered severance packages and restrictive covenants in line with the company's Executive Severance and Change in Control Plan. To address the underperformance of the Expedited Freight segment, Forward Air has appointed Eric Brandt as the new Chief Commercial Officer.
On the financial front, despite a substantial 92% increase in Q3 2024 revenue to $656 million largely attributed to the acquisition of Omni, the company revised its full-year 2024 EBITDA guidance downward to $300-$310 million. The integration of Omni is progressing as planned, with the company expecting $75 million in annualized savings by early 2025.
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