Forward Air Corporation

03/11/2026 | Press release | Distributed by Public on 03/11/2026 14:02

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
This section of this Annual Report on Form 10-K generally discusses our results of operations and financial condition for the year ended December 31, 2025. For a discussion of similar topics for the years ended December 31, 2024 and December 31, 2023, please refer to "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K, filed on March 24, 2025, which is incorporated herein by reference.
Overview
We are a leading asset-light freight provider of transportation services, including LTL, truckload and intermodal drayage services across the United States and in Canada and Mexico. We offer premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling. We utilize an asset-light strategy to minimize our investments in equipment and facilities and to reduce our capital expenditures. Globally, we provide customized asset-light, high-touch logistics and value-added services with deep customer relationships in high-growth end markets.
Our services are classified into three reportable segments: Expedited Freight, Omni Logistics and Intermodal.
Our Expedited Freight segment provides expedited regional, inter-regional and national LTL services. Expedited Freight also offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.
Our Omni Logistics segment provides a full suite of global logistics services. Services include air and ocean freight consolidation and forwarding, customs brokerage, time-definite transportation services, contract logistics, which includes warehousing and value-added services, as well as other supply chain solutions.
Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads. Intermodal also offers dedicated contract and CFS warehouse and handling services, and in select locations, linehaul and LTL services.
Our operations, particularly our network of hubs and terminals, represent substantial fixed costs. Consequently, our ability to increase our earnings depends in significant part on our ability to increase the amount of freight and the revenue per pound or shipment for the freight shipped or moved through our network. Additionally, our earnings depend on the growth of other services, such as LTL pickup and delivery, which will allow us to maintain revenue growth in a challenging freight environment. We continue to focus on creating synergies across our services, particularly with services offered in our Expedited Freight reportable segment. Synergistic opportunities include the ability to share resources, in particular our fleet resources.
With respect to our Expedited Freight and Intermodal reportable segments, in addition to our financial results, we monitor and analyze a number of key operating statistics in order to manage these segments and evaluate their operating performance. These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight and Intermodal reportable segments. Our key operating statistics should not be interpreted as better measurements of our results than income from operations as determined under GAAP. As we continue to integrate the legacy Omni business, we measure and manage the performance of the Omni Logistics segment based on its revenue and income. We have not identified, nor do we utilize, any key operating statistics necessary to understand the operating results of our Omni Logistics reportable segment.
As we continue to integrate the Omni and Forward businesses, we are also developing how we organize and manage our product offerings. While we continue to manage the business by our disclosed segments below, we have information available to estimate revenue for key product groups for the period ended December 31, 2025. Estimated revenue for ground transportation, air & ocean forwarding, intermodal drayage, and contract logistics approximated 63%, 13%, 9% and 15% of operating revenue, respectively during 2025.
Key Operating Statistics
Within our Expedited Freight reportable segment, our primary revenue focus is to optimize density, which is to obtain appropriate pricing of our services that allows for profitable shipments and tonnage growth within our existing LTL network. Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations, including linehaul load factor and door pounds handled per hour. In addition to our focus on density and operating efficiencies, it is critical for us to obtain an appropriate yield, which is measured as revenue per hundredweight, on the shipments we handle to offset our cost inflation and support our ongoing investments in capacity and technology. Revenue per hundredweight is also a commonly-used indicator for general pricing trends in the LTL industry and can be influenced by many other factors, such as changes in fuel surcharges, weight per shipment and length of haul. Therefore, changes in revenue per hundredweight may not necessarily indicate actual changes in underlying base rates. We regularly monitor the components of our pricing, including base freight rates, accessorial charges and fuel surcharges. The fuel surcharge is generally designed to offset fluctuations in the cost of the petroleum-based products used in our operations by passing changes in such costs on to customers and is indexed to diesel fuel prices published by the U.S. Department of Energy on a weekly basis. The impact of fuel on our results of operations depends on the relationship between the applicable surcharge, the fuel efficiency of our Company drivers, and the load factor achieved by our operation. Fluctuations in fuel prices in either direction could have a positive or negative impact on our margins, particularly in our LTL business where the weight of a shipment subject to the fuel surcharge on a given trailer can vary materially. We believe our yield management process focused on account level profitability, and ongoing improvements in operating efficiencies, are both key components of our ability to grow profitably.
The key operating statistics necessary to understand the operating results of our Expedited Freight reportable segment are described below in more detail:
Tonnage - Total weight of shipments in pounds. The level of freight tonnage is affected by economic cycles and conditions, customers' business cycles, changes in customers' business practices and capacity in the truckload market.
Weight Per Shipment- Total pounds divided by the number of shipments. Fluctuations in weight per shipment can indicate changes in the mix of freight we receive from our customers, as well as changes in the number of units included in a shipment. Generally, increases in weight per shipment indicate higher demand and overall increased economic activity. Changes in weight per shipment can also be influenced by shifts between LTL and other modes of transportation, such as truckload, in response to capacity, service and pricing issues. Fluctuations in weight per shipment generally have an inverse effect on our revenue per hundredweight, as a decrease in weight per shipment will typically cause an increase in revenue per hundredweight.
Revenue Per Hundredweight- Network revenue per every 100 pounds of shipment weight. Our LTL transportation services are generally priced based on weight, commodity, and distance. Our pricing policies are reflective of the services we provide, and can be influenced by competitive market conditions. Changes in the freight profile factors such as average shipment size, average length of haul, freight density, and customer and geographic mix can impact the revenue per hundredweight. Fuel surcharges and intercompany revenue between Network and Truckload are included in this measurement.
Revenue Per Shipment- Network revenue divided by the number of shipments. Fuel surcharges and intercompany revenue between Network and Truckload are included in this measurement.
Average Length of Haul -Total miles between origin and destination service centers for all shipments, with miles based on the size of shipments. Length of haul is used to analyze our tonnage and pricing trends for shipments with similar characteristics. Changes in length of haul generally have a direct effect on our revenue per hundredweight, as an increase in length of haul will typically cause an increase in revenue per hundredweight.
Within our Intermodal reportable segment, our primary revenue focus is to increase the number of shipments. The key operating statistic necessary to understand the operating results of our Intermodal reportable segment is described below in more detail:
Drayage Revenue Per Shipment- Intermodal revenue divided by the number of drayage shipments. Revenue derived from container freight station warehouse and handling, and linehaul and LTL services is excluded from this measurement. Fuel surcharges and accessorial charges are included in this measurement.
Trends and Developments
Economy
Our business is highly susceptible to changes in economic conditions. Our products and services are directly tied to the production and sale of goods and, more generally, to the global economy. Participants in the transportation industry have historically experienced cyclical fluctuations in financial results due to economic recessions, downturns in the business cycles of customers, volatility in the prices charged by third-party carriers, interest rate fluctuations and other U.S. and global macroeconomic developments. During economic downturns, reductions in overall demand for transportation services will likely reduce demand for our services and exert downward pressure on our rates and margins. In periods of strong economic growth, overall demand may exceed the available supply of transportation resources. While this may present an opportunity to increase economies of scale in our network and enhanced pricing and margins, these benefits may be lessened by increased network congestion and operating inefficiencies.
Like other providers of freight transportation services, our business has been impacted by the macroeconomic conditions of the past year. Industry freight volumes, as measured by the Cass Freight Index, decreased throughout 2025 as compared to 2024. Recent global disruptions, including proposed changes and implemented changes to tariff rates, as described below, have had an impact on freight demand, which has led to an overall continued decrease in total number of shipments. Such disruptions are expected to continue with a resolution timeline remaining unclear. Intermodal volumes, heavily influenced by United States imports, have decreased due to a number of factors that impact import levels. For Truckload, capacity levels relative to demand have created a sustained market of depressed spot market truckload rates.
Amid broader volatility in the global economy, the U.S. government has recently proposed and imposed significant widespread baseline and country-specific tariffs on imported goods from China, Canada, and other countries. While the implementation of certain country-specific tariffs with most countries has been delayed as negotiations progress, the extent of the risk of tariffs remains uncertain. While the ultimate impact of tariff policy changes is unclear, we are actively monitoring these developments and remain committed to taking appropriate measures to maintain our competitiveness and adapt to changing economic conditions.
Strategic Review
In January 2025, the Board announced that it had initiated a comprehensive review of strategic alternatives to maximize shareholder value. The Board is continuing to consider a range of options, including a potential sale, merger or other strategic or financial transaction relative to the long-term value potential of the Company on a standalone basis. The Board has retained Goldman Sachs & Co. LLC to serve as its financial advisor. The Board has not set a timetable for the conclusion of this review, nor has it made any decisions related to any further actions or potential strategic alternatives at this time. There can be no assurance that any transaction or other strategic outcome will be approved by the Board or otherwise consummated. The Company does not intend to disclose developments relating to this process until it determines that further disclosure is appropriate or necessary.
Omni Integration
On January 25, 2024, the Company completed the acquisition (the "Closing") of Omni Newco, LLC ("Omni" and the acquisition of Omni, the "Omni Acquisition"), after which, we disclosed certain expectations regarding potential synergies from the acquisition and highlighted issues that would have to be addressed as we execute on the Omni integration, which issues are described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, "Risk Factors" - under the title "The Omni Acquisition may not achieve its intended benefits, and certain difficulties, costs or expenses may outweigh such intended benefits." Since that time, we have made significant progress on our integration plans and exceeded our initial expectations regarding cost synergies. However, there are continued uncertainties that may affect our ability to successfully complete the full integration of the Omni business or realize its anticipated long-term benefits including revenue synergies. Specifically, we are continuing to integrate operational and administrative technology platforms and systems which are critical to our operational processes and administrative functions, as well as customer service and experience. In addition, as previously disclosed, we are implementing a transformation of the combined business which includes evaluating and integrating the solutions and service offerings available to our customers in order to maximize revenues and efficiencies. Finally, we continue to execute on strategies to retain existing customers and vendors as we finalize our transformation and implement any resulting changes to our business and operations.
Results from Operations
Year Ended December 31, 2025 compared to Year Ended December 31, 2024
The following table sets forth our consolidated financial data for the years ended December 31, 2025 and 2024:
Year Ended
(Unaudited and in Thousands)
December 31, 2025 December 31, 2024 Change Percent Change
Operating revenue:
Expedited Freight $ 1,012,559 $ 1,115,163 $ (102,604) (9.2) %
Omni Logistics 1,351,164 1,196,841 154,323 12.9
Intermodal 230,533 232,832 (2,299) (1.0)
Eliminations (99,138) (70,574) (28,564) 40.5
Operating revenue 2,495,118 2,474,262 20,856 0.8
Operating expenses:
Purchased transportation 1,244,471 1,250,570 (6,099) (0.5)
Salaries, wages, and employee benefits 535,681 536,406 (725) (0.1)
Operating leases 204,029 182,197 21,832 12.0
Depreciation and amortization 152,638 143,978 8,660 6.0
Insurance and claims 58,970 64,682 (5,712) (8.8)
Fuel expense 20,122 21,460 (1,338) (6.2)
Other operating expenses 242,783 309,508 (66,725) (21.6)
Impairment of goodwill - 1,028,397 (1,028,397) N/A
Total operating expenses 2,458,694 3,537,198 (1,078,504) (30.5)
Income (loss) from operations
Expedited Freight 69,780 67,951 1,829 2.7
Omni Logistics 30,162 (1,044,803) 1,074,965 102.9
Intermodal 16,924 18,925 (2,001) (10.6)
Other operations (80,442) (105,009) 24,567 23.4
Income (loss) from operations 36,424 (1,062,936) 1,099,360 103.4
Other income and expense:
Interest expense, net (180,747) (189,215) (8,468) (4.5)
Foreign exchange (loss) gain (5,892) 1,093 6,985 639.1
Other income, net 3,018 1,226 (1,792) (146.2)
Total other expense (183,621) (186,896) (3,275) (1.8)
Income (loss) from continuing operations before income taxes (147,197) (1,249,832) 1,102,635 88.2
Income tax expense (benefit) (5,472) (124,991) 119,519 95.6
Income (loss) from continuing operations (141,725) (1,124,841) 983,116 87.4
Income (loss) from discontinued operation, net of tax - (6,387) 6,387 N/A
Net (loss) income (141,725) (1,131,228) 989,503 87.5
Net (loss) attributable to noncontrolling interest (33,929) (314,259) 280,330 89.2
Net (loss) income attributable to Forward Air $ (107,796) $ (816,969) $ 709,173 86.8 %
Operating Revenues
Operating revenues increased $20,856, or 0.8% to $2,495,118for the year ended December 31, 2025 compared to $2,474,262 for the same period in 2024. This increase was primarily due to the Omni Logistics segment having an extra twenty-four days included in 2025 as compared to 2024 given that the Omni Acquisition closed in January 2024. The increase in operating revenues was partially offset by a decrease in our Expedited Freight segment revenue of $102,604 due to decreased Network volume. The results for our reportable segments are discussed in detail in the following sections.
Operating Expenses
Operating expenses decreased $1,078,504, or 30.5%, to $2,458,694for the year ended December 31, 2025 compared to $3,537,198 for the same period in 2024. The decrease was primarily due to a goodwill impairment charge of$1,028,397incurredin the prior year period and decreases in acquisition and integration costs associated with the Omni Acquisition. Such decreases were partially offset by the increases in operating expenses from the Omni Logistics segment having an extra twenty-four days included in the year ended December 31, 2025as compared to the same period in 2024. Additionally, in fourth quarter of 2025 the Company recorded a $19,765 charge to Other operating expenses for the impairment of abandoned software projects, which included $16,199 of cloud computing implementation costs and $3,566 of capitalized internal-use software.
Income (loss) from Operations
Income (loss) from operations increased by $1,099,360, or 103.4%, to income of $36,424 for the year ended December 31, 2025, compared to a $1,062,936 loss for the same period in 2024. The increase was primarily driven by the goodwill impairment charge from 2024 noted above, which did not occur in 2025.
Total Other Expense
Total other expense decreased $3,275, or 1.8%, to expense of $183,621 for the year ended December 31, 2025compared to an expense of $186,896 for the same period in 2024. The decrease was due to the decrease in interest expense resulting from lower variable interest rates partially offset by loss on foreign currency exchange.
Income Taxes
The effective tax rate for the year ended December 31, 2025was 3.7% compared to a rate of 10.0% for the same period in 2024. The effective tax rate for the year ended December 31, 2025 is lower than the prior year due to the tax impacts related to the goodwill impairment charge in the prior year that did not reoccur.
Income (loss) from Discontinued Operation, net of tax
Income (loss) from discontinued operations net of tax of $6,387, for the year ended December 31, 2024 was related to the final net working capital settlement following the sale of our Final Mile business in December 2023. There was no income or loss from discontinued operations for the year ended December 31, 2025.
Net Loss
As a result of the foregoing factors, net loss decreased $989,503, or 87.5%, to a net loss of $141,725 for the year ended December 31, 2025 compared to the net loss of $1,131,228 for the same period in 2024. The decrease is primarily related to $1,028,397 goodwill impairment charge incurred in the prior year that did not occur in the current year.
Net Loss Attributable to Noncontrolling Interest
The decrease in net loss attributable to noncontrolling interest for the year ended December 31, 2025, compared to the same period in 2024, is being driven by the decrease in net loss and the decreasing number of noncontrolling units outstanding for the respective periods.
Expedited Freight - Year Ended December 31, 2025 compared to Year Ended December 31, 2024
The following table sets forth our financial data of the Expedited Freight segment for the years ended December 31, 2025 and 2024:
Year Ended
(Unaudited and in Thousands)
December 31, 2025 Percent of Revenue December 31, 2024 Percent of Revenue Change Percent Change
Operating revenue:
Network1
$ 761,940 75.2 % $ 854,138 76.6 % $ (92,198) (10.8) %
Truckload 165,889 16.4 170,455 15.3 (4,566) (2.7)
Other 84,730 8.4 90,570 8.1 (5,840) (6.4)
Total operating revenue 1,012,559 100.0 1,115,163 100.0 (102,604) (9.2)
Operating expenses:
Purchased transportation 491,917 48.6 546,458 49.0 (54,541) (10.0)
Salaries, wages and employee benefits 210,418 20.8 242,411 21.7 (31,993) (13.2)
Operating leases 64,353 6.4 63,398 5.7 955 1.5
Depreciation and amortization 40,721 4.0 41,858 3.8 (1,137) (2.7)
Insurance and claims 40,746 4.0 43,716 3.9 (2,970) (6.8)
Fuel expense 8,985 0.9 9,733 0.9 (748) (7.7)
Other operating expenses 85,639 8.5 99,638 8.9 (13,999) (14.0)
Total operating expenses 942,779 93.1 1,047,212 93.9 (104,433) (10.0)
Income from operations $ 69,780 6.9 % $ 67,951 6.1 % $ 1,829 2.7 %
1Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue.
Expedited Freight Operating Statistics
Year Ended
December 31, 2025 December 31, 2024 Percent Change
Business days 255 256 (0.4) %
Tonnage 1,2
Total pounds 2,445,202 2,782,294 (12.1)
Pounds per day 9,589 10,868 (11.8)
Shipments 1,2
Total shipments 2,903 3,312 (12.3)
Shipments per day 11.4 12.9 (11.6)
Weight per shipment 842 840 0.3
Revenue per hundredweight 3
$ 31.17 $ 30.71 1.5
Revenue per hundredweight, ex fuel 3
$ 24.72 $ 24.09 2.6
Revenue per shipment 3
$ 262.55 $ 257.99 1.8
Revenue per shipment, ex fuel 3
$ 208.25 $ 202.42 2.9
1In thousands
2Excludes accessorial and Truckload products
3Includes intercompany revenue between the Network and Truckload revenue streams
Operating Revenues
Operating revenue decreased $102,604, or 9.2%, to $1,012,559 for the year ended December 31, 2025from $1,115,163 for the same period in 2024. The decrease was driven by decreased Network revenue. Network revenue decreased due to a 12.1% decrease in tonnage as a result of softer demand and was partially offset by a 2.6% increase in revenue per hundredweight ex fuel as compared to the same period in the prior year. The decrease in tonnage reflects an increase in weight per shipment of 0.3% on 12.3% fewer shipments.
Purchased Transportation
Purchased transportation expense decreased by $54,541, or 10.0%, to $491,917 for the year ended December 31, 2025 from $546,458 for the same period in 2024. Purchased transportation was 48.6% of Expedited Freight operating revenue for the year ended December 31, 2025 compared to 49.0% for the same period in 2024. Purchased transportation includes Leased Capacity Providers, third-party motor carriers, and transportation intermediaries, while Company-employed drivers are included in salaries, wages and employee benefits. The decrease in purchased transportation was primarily due to decreased shipments for the year ended December 31, 2025 as compared to the same period in 2024.
Salaries, Wages, and Employee Benefits
Salaries, wages and employee benefits decreased by $31,993, or 13.2%, to $210,418 for the year ended December 31, 2025 from $242,411 for the same period in 2024. Salaries, wages and employee benefits were 20.8% of Expedited Freight operating revenue for the year ended December 31, 2025 compared to 21.7% for the same period in 2024. The decrease in salaries, wages and employee benefits expense was primarily due to the lower volumes for the year ended December 31, 2025 as compared to the same period in 2024.
Other Operating Expenses
Other operating expenses decreased $13,999, or 14.0%, to $85,639 for the year ended December 31, 2025 from $99,638 for the same period in 2024. Other operating expenses were 8.5% of Expedited Freight operating revenue for the year ended December 31, 2025 compared to 8.9% for the same period in 2024. Other operating expenses include contract labor, equipment maintenance, facility expenses, legal and professional fees, and other over-the-road costs. The decrease in other operating expenses was primarily due to acquisition and integration synergies as well as reduction in shipments for the year ended December 31, 2025 as compared to the same period in 2024.
Income from Operations
Income from operations increased by $1,829, or 2.7%, to $69,780 for the year ended December 31, 2025 compared to $67,951 for the same period in 2024. Expedited Freight income from operations was 6.9% of operating revenue for the year ended December 31, 2025, compared to 6.1% for the same period in 2024. The increase in income from operations was driven by improved cost management relative to the lower freight volumes for year ended December 31, 2025 as compared to the same period in 2024.
Omni Logistics - Year Ended December 31, 2025 compared to Year Ended December 31, 2024
The following table sets forth our financial data of the Omni Logistics segment for the years ended December 31, 2025 and 2024:
Year Ended
December 31, 2025 Percent of Revenue December 31, 2024 Percent of Revenue Change Percent Change
Operating revenue $ 1,351,164 100.0 % $ 1,196,841 100.0 % $ 154,323 12.9 %
Operating expenses:
Purchased transportation 774,785 57.3 701,035 58.6 73,750 10.5
Salaries, wages and employee benefits 232,138 17.2 215,518 18.0 16,620 7.7
Operating leases 114,573 8.5 96,500 8.1 18,073 18.7
Depreciation and amortization 93,539 6.9 83,542 7.0 9,997 12.0
Insurance and claims 4,921 0.4 12,297 1.0 (7,376) (60.0)
Fuel expense 3,682 0.3 3,149 0.3 533 16.9
Other operating expenses 97,364 7.2 101,206 8.5 (3,842) (3.8)
Impairment of goodwill - - 1,028,397 85.9 (1,028,397) (100.0)
Total operating expenses 1,321,002 97.8 2,241,644 187.3 (920,642) (41.1)
Income (loss) from operations $ 30,162 2.2 % $ (1,044,803) (87.3) % $ 1,074,965 102.9 %
Operating Revenues
Operating revenues increased $154,323, or 12.9%, to $1,351,164 for the year ended December 31, 2025 from $1,196,841 for the same period in 2024. This is partially due to the increase in ownership days during the current year period, as well as an increase in revenue per day during 2025 due to increased demand for contract logistics.
Purchased Transportation
Purchased transportation increased $73,750, or 10.5%, to $774,785 for the year ended December 31, 2025 from $701,035 for the same period in 2024. Purchased transportation was 57.3% of operating revenues for year ended December 31, 2025 compared to 58.6% for the same period in 2024. Purchased transportation increased primarily due to the increase in ownership days and demand for our services during the current year period, but decreased as a percentage of revenue due to a shift in product mix. This shift in product mix consisted of an increase in contract logistics that require lower purchase transportation levels as compared to ground, air and ocean services.
Salaries, Wages and Employee Benefits
Salaries, wages and employee benefits increased $16,620 or 7.7%, to $232,138 for the year ended December 31, 2025 from $215,518 for the same period in 2024. Salaries, wages and employee benefits were 17.2% of operating revenues for the year ended 2025 compared to 18.0% for the same period in 2024. While salaries, wages and employee benefits increased mainly due to the increase in ownership days, the salaries, wages and benefits as a percentage of operating revenues decreased due to acquisition and integration synergies.
Operating Leases
Operating leases increased $18,073 or 18.7% to $114,573 for the year ended December 31, 2025 from $96,500 for the same period in 2024. Operating leases increased primarily due to the increase in ownership days.
Depreciation and Amortization
Depreciation and amortization increased $9,997 or 12.0% to $93,539 for the year ended December 31, 2025 from $83,542 for the same period in 2024. Depreciation and amortization increased as a result of the increase in ownership days of Omni Logistics in 2025 as compared to 2024.
Income (Loss) from Operations
Income from operations increased $1,074,965 or 102.9%, to an income of $30,162 for the year ended December 31, 2025 compared to a $1,044,803 loss for the same period in 2024. The increase was primarily due to no goodwill impairment charge in the current year period relative to the $1,028,397 goodwill impairment charge in the prior year period.
Intermodal - Year Ended December 31, 2025 compared to Year Ended December 31, 2024
The following table sets forth our financial data of the Intermodal segment for the years ended December 31, 2025 and 2024:
Year Ended
(Unaudited and in Thousands)
December 31, 2025 Percent of Revenue December 31, 2024 Percent of Revenue Change Percent Change
Operating revenue $ 230,533 100.0 % $ 232,832 100.0 % $ (2,299) (1.0) %
Operating expenses:
Purchased transportation 76,907 33.4 73,814 31.7 3,093 4.2
Salaries, wages and employee benefits 57,640 25.0 58,714 25.2 (1,074) (1.8)
Operating leases 22,312 9.7 21,599 9.3 713 3.3
Depreciation and amortization 17,929 7.8 18,440 7.9 (511) (2.8)
Insurance and claims 11,667 5.1 10,251 4.4 1,416 13.8
Fuel expense 7,433 3.2 8,578 3.7 (1,145) (13.3)
Other operating expenses 19,721 8.6 22,511 9.7 (2,790) (12.4)
Total operating expenses 213,609 92.7 213,907 91.9 (298) (0.1)
Income from operations $ 16,924 7.3 % $ 18,925 8.1 % $ (2,001) (10.6) %
Intermodal Operating Statistics
Year Ended
December 31, 2025 December 31, 2024 Percent Change
Drayage shipments 245,691 254,072 (3.3) %
Drayage revenue per shipment $ 851 $ 830 2.5 %
Operating Revenues
Operating revenue decreased $2,299, or 1.0%, to $230,533 for the year ended December 31, 2025, from $232,832 for the same period in 2024. The decrease in operating revenues was primarily due to a 3.3% decrease in drayage shipments as compared to the same period in 2024.
Purchased Transportation
Purchased transportation increased $3,093, or 4.2%, to $76,907 for the year ended year ended December 31, 2025 from $73,814 for the same period in 2024. Purchased transportation was 33.4% of Intermodal operating revenues for the year ended December 31, 2025 compared to 31.7% for the same period in 2024. Purchased transportation includes Leased Capacity Providers and third-party motor carriers, while Company-employed drivers are included in salaries, wages and employee benefits. Purchased transportation has increased based on several factors including changes in mix of internal vs external capacity utilization, length of haul, lane density, and mix of service providers.
Salaries, Wages, and Employee Benefits
Salaries, wages and employee benefits decreased $1,074, or 1.8%, to $57,640 for the year ended December 31, 2025 from $58,714 for the same period in 2024. Salaries, wages and employee benefits were 25.0% of Intermodal operating revenue for the year ended December 31, 2025 compared to 25.2% for the same period in 2024. Salaries, wages and employee benefits has decreased due to similar variables as purchased transportation including mix of freight and other variable characteristics that impact labor utilization.
Other Operating Expenses
Other operating expenses decreased $2,790, or 12.4%, to $19,721 for the year ended December 31, 2025 from $22,511 for the same period in 2024. Other operating expenses as a percentage of Intermodal operating revenue for the year ended December 31, 2025 was 8.6%, compared to 9.7% for the same period in 2024. Other operating expenses include contract labor, equipment maintenance, facility expenses, legal and professional fees, and accessorial storage costs. The decrease in other operating expenses was primarily driven by our decrease in revenue and continued cost reduction efforts that began in the third quarter of 2024.
Income from Operations
Income from operations decreased by $2,001, or 10.6%, to $16,924 for the year ended December 31, 2025 compared to $18,925 for the same period in 2024. Income from operations as a percentage of Intermodal operating revenue was 7.3% for the year ended December 31, 2025 compared to 8.1% in the same period in 2024. The decrease in income from operations as a percentage of operating revenues was primarily due decreased network efficiency resulting from the decrease in drayage shipments for the year ended December 31, 2025 as compared to the same period in 2024.
Corporate - Year Ended December 31, 2025 compared to Year Ended December 31, 2024
Corporate included an $80,442 operating loss during the year ended December 31, 2025 compared to a $105,009 operating loss during the same period in 2024. The change in the operating loss was partially driven by $31,473 of professional fees incurred in 2025 for transaction and integration costs in connection with the Omni Acquisition as compared to $81,467 in 2024. This reduction in costs was offset by a $19,765 impairment charge in the fourth quarter of 2025 related to abandoned software project costs.
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our estimates and assumptions are based on historical experience and changes in the business environment. However, actual results may differ from estimates under different conditions, sometimes materially. The significant accounting policies followed in the preparation of the financial statements are detailed in Note 1 of our Consolidated Financial Statements included in this Annual Report on Form 10-K.
Critical accounting policies and estimates are defined as those that are both most important to the portrayal of our financial condition and results and require management's most subjective judgments. We believe that our application of the policies discussed below involves significant levels of judgment, estimates and complexity. Due to the levels of judgment, complexity and period of time over which many of these items are resolved, actual results could differ from those estimated at the time of preparation of the financial statements. Adjustments to these estimates would impact our financial position and future results of operations.
Goodwill
We test goodwill at the reporting unit level for impairment annually as of June 30 and on an interim basis when events occur or circumstances exist that indicate the carrying value may not be recoverable. We estimate the fair value of a reporting unit using a discounted cash flow (DCF), or as appropriate, a combination of the DCF and market approach known as the guideline public company approach. Under the DCF approach, we estimate the fair value of reporting units' cash flows at the weighted average cost of capital of a hypothetical third-party buyer. The significant assumptions in the DCF model include forecast of annual revenue growth rates, annual operating income margin, and the discount rate used to present value the cash flow projections. When determining these assumptions and preparing these estimates, we consider historical performance trends, and the reporting units underlying business and other market trends that may affect the reporting unit. The discount rate is based on the estimated weighted average cost of capital as of the test date of market participants in the industry in which the reporting unit operates. Under the guideline public company method, we estimate the fair value based upon market multiples of revenue and earnings derived from publicly traded companies with similar operating and investment characteristics as the reporting unit.
Estimating the fair value of a reporting unit involves uncertainties because it requires management to develop assumptions about the future growth and potential volatility in revenues and costs, capital expenditures, industry economic factors and future business strategy. Changes in projected revenue growth rates, projected operating income margins or estimated discount rates due to uncertain market conditions, loss of one or more key customers, changes in our strategy, changes in technology or other factors could negatively affect the fair value in one or more of our reporting units and result in a material impairment charge in the future.
To assess the reasonableness of the calculated fair values of our reporting units, we also compare the sum of the reporting units' fair values to our market capitalization and calculate an implied control premium.
Annual Goodwill Analysis
The annual test of goodwill was performed for each of the reporting units with goodwill balances as of June 30, 2025. As a result of the annual test, none of the reporting units were determined to be impaired, however the Omni reporting unit fair value was not substantially in excess of its carrying value. The fair value of the Omni reporting unit was estimated to be approximately 10% higher than the carrying value. As a result of the 2024 annual test, the Company recorded goodwill impairment charges for the year ended December 31, 2024 totaling $1,028,397 which are all related to the Omni reporting unit. To complete the goodwill test of our reporting units, we determined the fair value of the reporting unit using the DCF model and a guideline public company approach with 50% of the value determined using the DCF and 50% of the value determined using the market approach. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors, as a result there can be no assurance that there will not be a potential impairment in the future.
Year Ended December 31, 2024 compared to Year Ended December 31, 2023
For discussion of our Results of Operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023, refer to Part I, Item 7 of our Annual Report on form 10-K filed with SEC on March 24, 2025.
Liquidity and Capital Resources
For discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 refer to Part I, Item 7 of our annual report on form 10-K filed with SEC on March 24, 2025.
We have historically financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under our $300,000 revolving credit facility (the "Revolving Credit Facility") pursuant to our
credit agreement with Citibank, N.A., as administrative agent and collateral agent and as initial term loan lender (the "Credit Agreement"). We believe that availability of borrowings under our Credit Agreement together with available cash and internally generated funds will be sufficient to support our working capital, capital expenditures and debt service requirements over the next twelve months. As previously disclosed and more fully described in Note 3, Acquisitions to the Consolidated Financial Statements, we incurred significant indebtedness in connection with the Omni Acquisition.
This substantial level of debt could have important consequences to our business, including, but not limited to the factors as more fully discussed in Item 1A, "Risk Factors" - "Risks Relating to our Indebtedness."
The Credit Agreement requires the Company to maintain a leverage ratio (as defined in the Credit Agreement), which is tested quarterly and currently must not be greater than 6.50 to 1.00. As of the year ended December 31, 2025, the Company's leverage ratio is 5.50 to 1.00. The required leverage ratio will incrementally decrease by 25 basis points at the end of each quarter in 2026, to 5.50 to 1.00 at December 31, 2026, as defined in the agreement. Failure to comply with this covenant would result in an event of default under the Credit Agreement and, absent a waiver from the lenders or an amendment to the Credit Agreement, preclude the Company from making further borrowings under the Revolving Credit portion of the Credit Agreement and permit the lenders to accelerate all outstanding borrowings under the Credit Agreement, including the Term Loan portion. Based on current expectations, the Company expects to maintain compliance with the leverage ratio during the next year.
Senior Secured Notes
In a private offering exempt from registration under the Securities Act, the Company issued $725,000 in secured debt due 2031 (the "Notes"). The Notes bear interest at a rate of 9.5% per annum, payable semiannually in cash in arrears on April 15 and October 15 of each year, commencing April 15, 2024. The Notes were issued at 98.0% of the face amount and will mature on October 15, 2031. The Notes were issued pursuant to an indenture, dated as of October 2, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee and notes collateral agent.
The Notes are guaranteed on a senior secured basis by us and each of Company's existing and future domestic subsidiaries (subject to customary exceptions). Prior to October 15, 2026, the Company may redeem some or all of the Notes at any time and from time to time at a redemption price equal to 100.000% of the principal amount thereof plus the applicable "make-whole" premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. On or after October 15, 2026, the Company may redeem some or all of the Notes at the following prices (expressed as a percentage of principal), plus in each case accrued and unpaid interest, if any, to, but excluding, the redemption date: (a) in the case of a redemption occurring during the 12-month period commencing October 15, 2026, at a redemption price of 104.750%; (b) in the case of a redemption occurring during the 12-month period commencing on October 15, 2027, at a redemption price of 102.375%; and (c) in the case of a redemption occurring on or after October 15, 2028, at a redemption price of 100.000%. In addition, at any time prior to October 15, 2026, the Company may redeem up to 40.000% of the original aggregate principal amount of the Notes in an amount not to exceed the amount of net cash proceeds from one or more equity offerings at a redemption price equal to 109.5 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Upon the occurrence of a "change of control", the Company will be required to offer to repurchase all of the outstanding principal amount of the Notes at a purchase price of 101.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
Credit Agreement
Pursuant to the Credit Agreement, the Company obtained senior secured term B loans in an aggregate principal amount of $1,125,000 (the "New Term Loans") and the ability to draw down up to $300,000 under the Revolving Credit Facility. The New Term Loans bear interest based, at Company's election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin. The base rate is equal the highest of the following: (i) the prime rate; (ii) 0.50% above the overnight federal funds rate; and (iii) the one-month SOFR plus 1.00%. The applicable margin for SOFR loans is 4.50% and the applicable margin for base rate loans is 3.50%. The New Term Loans were issued at 96.0% of the face amount and will mature on December 19, 2030.
The Revolving Credit Facility will mature on January 25, 2029. Loans made under the Revolving Credit Facility bear interest based, at Company's election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin. The applicable margin can range from 3.75% to 4.25% for SOFR loans and from 2.75% to 3.25% for base rate loans, in each case depending on Company's first lien net leverage ratio, as set forth in the Credit Agreement. The Company also incurs a 0.5% commitment fee on any unused portion of the Revolving Credit Facility. As of December 31, 2025, the Company has $261,323 available for borrowings under the Revolving Credit Facility and no borrowings outstanding. The Company's obligations under the Credit Agreement are guaranteed on a senior secured basis by us and each of Company's existing and future domestic subsidiaries (subject to customary exceptions).
Both the Notes and Revolving Credit Facility contain covenants that, among other things, restrict our ability, without the approval of the required lenders, to engage in certain mergers, consolidations, asset sales, dividends and stock repurchases, investments, and other transactions or to incur liens or indebtedness in excess of agreed thresholds, as set forth in the Credit Agreement. The Revolving Credit Facility's terms also include a financial covenant which requires us to maintain a specific leverage ratio as follows: (i) 6.50:1.00 (for the fourth quarter of 2025), (ii) 6.25:1.00 (for the first quarter of 2026), (iii) 6.00:1.00 (for the second quarter of 2026), (iv) 5.75:1.00 (for the third quarter of 2026), (vi) 5.50:1.00 (for the fourth quarter of 2026 and thereafter). The Credit Agreement contains cross-default provisions. As such, if the requisite revolving lenders were to declare the amounts outstanding under the Revolving Credit Facility to be immediately due and payable as a result of a breach thereunder, the term loan lenders would have the right to accelerate the outstanding term loans and exercise other remedies available under the Credit Agreement. As of the date of this report, we were in compliance with all aforementioned covenants.
Tax Receivable Agreement
In connection with the Omni Acquisition, we, Opco, Omni Holders and certain other parties entered into the Tax Receivable Agreement, which sets forth the agreement among the parties regarding the sharing of certain tax benefits realized by us as a result of the Omni Acquisition. Pursuant to the Tax Receivable Agreement, we are generally obligated to pay certain Omni Holders 83.5% of (a) the total tax benefit that we realize as a result of increases in tax basis in Opco's assets resulting from certain actual or deemed distributions and the future exchange of units of Opco for shares of securities of us (or cash) pursuant to Opco's operating agreement that became effective as of the Closing, (b) certain pre-existing tax attributes of certain Omni Holders that are corporate entities for tax purposes, (c) the tax benefits that we realize from certain tax allocations that correspond to items of income or gain required to be recognized by certain Omni Holders, and (d) other tax benefits attributable to payments under the Tax Receivable Agreement. Payment obligations under the Tax Receivable Agreement rank pari passu with all unsecured obligations but senior to any future tax receivable or similar agreement entered into by us.
The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless we elect to terminate the Tax Receivable Agreement early (or it is terminated early due to a change of control or insolvency event with respect to us or a material breach by us of a material obligation under the Tax Receivable Agreement). Upon such an early termination, we will be required to make a payment equal to the present value of the anticipated future payments to be made by it under the Tax Receivable Agreement (based upon certain assumptions and deemed events set forth in the Tax Receivable Agreement). In the event of a change of control, under certain circumstances, we may elect to pay the early termination payment over a period of 15 years, with the payments increased to reflect the time value of money.
Cash Flows
Year Ended December 31, 2025 Cash Flows compared to December 31, 2024 Cash Flows
Net cash provided by operating activities of continuing operations was $44,384 for the year ended December 31, 2025 compared to cash used operating activities of continuing operations of $69,015 for the year ended December 31, 2024. The increase in net cash provided by operating activities was primarily due to the decrease in loss from continuing operations and improved working capital management.
Net cash used in investing activities of continuing operations was $26,912 for the year ended December 31, 2025 compared to cash used of $1,608,586 during the year ended December 31, 2024. Investing activities of continuing operations for the year ended December 31, 2024 included the acquisition of Omni for a purchase price of $1,576,219. Capital expenditures for the year ended December 31, 2025 were $29,116, which primarily related to the purchase of technology and operating equipment. Capital expenditures for the year ended December 31, 2024 were $37,060, which primarily related to the investment in the expansion of our national hub in Columbus, Ohio and the purchase of technology and operating equipment.
Net cash used in financing activities of continuing operations was $17,533 for the year ended December 31, 2025 compared to $163,832 for the year ended December 31, 2024. The change in the net cash used in financing activities was primarily due to the payments in 2024 of debt issuance costs, long-term debts, and earn-out liabilities, all of which did not reoccur in the current year period.
Share Repurchase Program
During the years ended December 31, 2025 and 2024, we did not repurchase any shares.
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