Earnings call transcript Q1 2023

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Operator

Thank you for joining Forward Air Corporation's First Quarter 2023 Earnings Release Conference Call.

Before we begin, I'd like to point out that both the press release and webcast presentation for this call are accessible on the Investor Relations section of Forward Air's website at www.forwardaircorp.com. With us this morning are CEO, Tom Schmitt; and CFO, Rebecca Garbrick.

By now, you should have received the press release announcing our first quarter 2023 results, which was furnished to the SEC on Form 8-K and on the wire yesterday after the market closed. Please be aware that certain statements in the company's earnings press release announcement and on this conference call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including 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 expected second quarter 2023 and fiscal year 2023. to a and future other such unknown could actual not subject and factors forward-looking are those cause known from to risks, results statements. statements guarantee implied performance of are that expressed These or materially by differ uncertainties and

to filings the this For information obligation press result whether undertakes webcast relating to our release call. statements, risks Securities The and no please refer and future and any additional the factors, Exchange earnings as company new these of to events, concerning forward-looking with update Commission and presentation otherwise. or a information,

these are During do Air. included website. of measures directly tab most also not may Accounting the over to to CEO be that U.S. in to financial the of issued, Generally Accepted Tom metrics Definitions turn the call press non-GAAP our call, on available conform GAAP. which the GAAP Principles Schmitt, comparable their Forward discussion measures there or is of reconciliations Investors And I'll now release of and

Thomas Schmitt

call the months and I Alan on of made you three take I the to want to to on earnings all you, good you statements morning ago. back Thank call. a three

said I The first tough was. also, it will statement was QX be

this Secondly, say to will still call not top I did I last PS to finish happen. we expect XXXX. point XXXX the time saying have At this

holds value statement that be was high best very freight and Third much our to the drive is in still case. the

year. of first the and me the let unpeel two, just bit all the and start me three those a statements Let quarter with

we modeling revenue Force and bridge the would reviewed Game up fuel revenue actually right cost based minus initiatives the specific coming actually an And tonnage on We have were and headwinds where at we our X make and we percentage worse cost point call containment and and If you year-over-year but we bridge, front the earnings in LTL we our Forward expectations sluggish remember a an own points, minus on months Forward on believe that down. for X. Shape. management than initiatives, X% last had both EPS that now initiatives had the modeled facing Three decline. economy are four that books we a actually are

remember in you you If QX saw release, the XX%. as minus

First was part of April XX%. minus

are of weeks still going We the not couple better the now so now, X at minus four first last for in months. but and

And very, that's pieces a Secondly, very per shipment. per and pieces there's driver important that remains suppressed. margin shipment

and quarter expected per lower we And lastly, that shipments we Washington Institute in predicted. than the XX% were are than coming in a ago. fuel still what are down a come do year first faster fewer today, down We had issue than currently the quarter shipment come and the is pieces of shipments has lighter. That faster

$X.XX a now As target reconciliation, EPS target bridge for a we do of had at We're of year. looking EPS our all result those revise beating the last headwinds, of to year. we the to $X.XX when

made on I last was the to be drive that part the our holds that value still high to of is go in my That last me call. Let true. LTL statement and the statement best

of made high actually you, is priced me accessible remind fundamentally and precision This value program, with just working. execution an customers. program operated to forward go let is appropriately, group Our freight increasing

points me those take in turn. Let four

actually below categories the four our point for while medical quarter shipment we're growth by in good XX% top That one, entire out did piece heavier, March. the value here's more I And events, per with up year, year's of was is line of last this that for full to freight our total call. verticals XX.X%. quarter We March valuable nutritious, XX% the more higher went the freight. of very much in value continues, mix. including moving. for on high weight from year-over-year our the It's First, equipment the freight slightly the last per freight weight

was Go of appropriately. part pricing Forward second The

ton ton airport in Our is up for up. to same per the revenue fuel for to Revenue and effort mile paid last respectively and that's X.X% QX. metric is and for my mile we and airport mind quarter. That's to between X% for best compared pound is the the door expanded excluding get what per that metric door ex-fuel year's pound for, Forward

paid that done a getting the year more You're we've work for ago. same

execution. third The precision component operated with is of Forward Go

now their have better our us than been point billion customers telling on in to appreciate LTL are Ship the lowest tightest the anybody to industry the fact. And damages, that we're $XX $XX of the time, high we the type will windows differentiation. that should Thanks telling the about in that know customers work those we is else and have what there for we of us billion Here industry. value that are scorecards by SJ time and comes appreciate Matrix, a is Consulting hitting on best research

have the the in are hitting industry. lowest in tight We best the time windows, we damages

continue execution with precision operating in also our We operations. day-to-day

customers that We that getting miles independent the and of outside low best available. ensuring have contractors are the who record know most miles our our us ones

to customers, said with Grow precision growing. appropriately topped is operated QX of XXX that it is high keeps our customer XXXX. XXXX customer after count larger that Forward LTL from recently shipper QX fourth up accessible of freight direct making base. The priced count a piece execution value I

Forward Go So is actually working. fundamentally

shipment benefit for to Alan, our strategy way going are for and can we is deeply this it, with a in and that de to Forward we to when And quarter independent that, have open back questions, open you for to Go down working contractors we that tells everything up the facto more do teammates miss some starts for and the count year we're we're fully questions. size guiding doing I Now before it's when hard up And expect me still from normalizing, realize a appreciate and beyond. year. it it remarkable

Operator

will first of from At question Atkins Thank time, you. line Stephens. be [Operator Instructions]. from our the this Jack

is open. line Go Your ahead.

Jack Atkins

morning, Okay, morning, Tom. great. Good you questions. Rebecca. my Thank for Good taking

Thomas Schmitt

Good morning, Jack.

Jack Atkins

Tom, maybe a that, of the half? are anything first driving like what's the the we the start seeing April, just better number understand is pieces improvement month an you can it second-half certainly guess of get on walk that you the of handle there issue, through feels improvement can us I in year-over-year on kind than per So Is a seeing helping if there's comp why with us maybe of of was you second-half it a to maybe help in terms better April us in shipment, are basis.

Thomas Schmitt

value is you Jack Yeah, at obviously just everything correct. face said

about been weeks and it's several when So was in kind there of a percentage points two half LTL tonnage. our improvement

at months that actually if of frankly the the March said, including look December. and we very, in first year, I November had same you couple it into volume even the sluggish seen environment was of As very

First step and step was then up. up was a tiny part significant two of April and a a weeks the actually half last

our tremendously we here, So what closely. working happened with best and customers are

engaged Our pie. slice has getting the in more sales never more team been of

high their are Asia. type damages. that are frankly, coming seeing harder customers value are in slight them of freight we of zero And benefit the some customers sure a from with appreciating Some to from of improvement the working movements that those in traffic make

One thing mean, job. they're I better Jack, doing a

high equipment. us Our I They for with do well, calls and trend a the have weeks, to on and customers and leaders believe them come customers. basis, take seeing damages propensity This the tech have go to think have that larger don't Two been make Jack, sales fairly us starting out sales from that the know I customer. customers extremely more everything yet. daily it's where with to energy type end of of consistent. zero to $XX,XXX personally their I is is a on play we're more.

that's frankly, have conservative. So been we probably why, somewhat

We in a our case working more more impact what know conservative It's freight seeing from value winning real. compelling that us but have extremely for about with not always QX, is the us. we're making us well, together past customers best with high been

in to had that ago. leader helps kind They're Earlier Toller of this ago, are shipment take-off nine then active actually businesses I too. added a shipping. that accounts using week small count looked few all And customers. They're that's at sized medium also value the joined We're months now that new. a the into not were us who the XXX our Erica have And building intermediaries. sales starting there zero we [ph], and months us shipments six to

is intermediaries convincing companies to up together energy our that of us high that with value collectively, know to more ramping So who well best smaller customers work. those of not freight do with use us, win also some starting

what half than that's It's a Jack, seeing So two few a seeing yet, I and more think what a but is is we're days. real. we're not weeks trend

Jack Atkins

it. got Okay,

So can to XQ I perspective, guess improvement relatively but muted conservative sounds commentary you idea quarter being from little follow second would normally expect guys just the if with expect up a what on was to versus you I I could guess, are the Tom, maybe from it you bit seasonal first the like on outlook? maybe guide some see to a that the idea quarter, the expand the

Thomas Schmitt

Yeah.

muted, exact when you we and say might Rebecca, looking the and at somewhat So I you thing. be same

QX crazy. year remind to up of I most boom. before. step up. the we was Last It's you, showing April was That's year XX% we're the QX QX, things between take freight may so had crazy, reversal never Certainly last seen. once June was QX, year to had pronounced going not step actual measurement. crazy be on the just it benefit last comparative something of Last QX of small about year the So had two end best you EPS the lower on, a here amplification out. accrual seen that what or the

fuel much time quarter. high all at second Secondly, levels last was pretty

benchmark. XXX we is year typical had the probably the last So not

probably compare would It's overestimate see what but has six to be personally, I side. for out to been I put on out better out look recession working, beating I we of months. want improvements, conservative guidance this now up see nine. I what this the around the going time, say, QX. about not So And here missing at would about do recession I put XXX A we then we're real to from freight is on the believe disappoint. and same lasts us odds don't XX% XXX. at expect at the than to putting I typical I it just

would model, the somehow cautious which second some that into that half for also be is would quarter benefit, but what's think, will still. of somewhat you I see second our built So the

Jack Atkins

first assume. at initiatives look to gives guess much that's really half, the the the bottom then including on the question, half second half kind improvement guidance my Tom? in of for that more what's type first And I like out to over accrual I versus I getting if macro it. than driving what second last second kicking you the you're just improvement, focused take say assuming up, what confidence better, that is see I got half in $X.XX half I that earnings the of significant normal, is the that ramp. you're and end it reversal, versus looks internal Okay, step that, going range mean, would in, it XX% guess of your it

Thomas Schmitt

let and you're good with so bit little math of here Jack too. a that, me pretty do Yeah,

of bit mental So ping pong a we here. can to go

looked… So you if

Jack Atkins

major, history you I'll a am defer I that. so on to

Thomas Schmitt

to if metal you've that for correctly look Typically, pointed at out the first quarter, pound think yourself the I one for on first the podium quarter five first as first pound no, is from typical because seriously, get sequential quarter year, by quarter, a enough get you a not the XXX. Okay, is you credit. multiply you perspective. But doesn't quarter, at given just the

take So if you gives XXX five, you XXX. times that

half confident to the bad, the Now, recession. what And edging is of in freight go first better, is slightly be I saying, as we absolute but in as April half bad first they that do first was. is were December second the even what April not November, this the was should quarter believe better. bottom were saw fairly quarter we collectively

to able do, multiply would you thing get it completely doing be you typical when which quarter, that by than to more the by multiply five expect over XXX, a bottom of multiplication five. by freight absolute you a if would be So the recession, should I the normal by sure slightly first to

bear So me out. than should because the XXX will not quarter stretch, to this again, is by a be reality multiplying what less five

Jack Atkins

freight second the it recession. the time, I turn this thanks know well, bottom hope I that the Okay, will Rebecca. that, others. Thanks, we better But point over things in half, but is your to certainly get hope it the I'll of to Tom. for would

Thomas Schmitt

Jack. you, Thank

Operator

your check Please [ph], Boyle is feature. line Ms. open. your mute

Unidentified Analyst

the about and Rebecca, that open is This that. I Sorry didn't Tom Joe wanted Good sort you're then hear XX thought the about timing you wondering what how wondering this kind about line -- just A from the your you're Hafling hearing of yet. morning, wise question. my recovery versus that just for second was of is framing freight? to on of [ph] the thesis. on months, morning, is thanks point customers at based I actually Stephanie. of second already of months your sort just about that quickly of nine thinking half how kind from customers hearing you on of good and what they're it's recovery is kind sort being how follow I'm thinking up or if I it are second your half it's for kind half wanted you're

Thomas Schmitt

partner, In a our history contrast Jack, previous to not major. I'm conversation

months. So I the by wouldn't just go nine

we get from We of a customer get every of But little we deliveries hearing a always them. and them majority customers That's that's mean every is we hearing normal we're of we're closer to interactions customers, interaction size you Asia go midpoint, vast into the it. end single talk about What all to what of fairness, single quarter. in of business a of if frequency single everything had the the partner expected Now already from our not by kind normal saying. pipeline to them the happening. is this that one have, or bit with what see that to a are expected and that our

may expectation imports the is the normalizing closer customers we by this inventory our some East from and of of a the why of quarter, go had guys, in be shipment Middle not end you actually of sizes put conclusion. half. know just year, differentiation of may imports some you complete start some year half frequency But mean research inventory but the piece second quarter, getting should between, depletion which Joe, that assumed this of that out half, a instance, from of into still are Some Asia. earlier by hearing the of end versus second more to the we said even yesterday actually rundowns the the for I the also activity the shipment that the sluggishness first kind second is significantly that during the with the

seeing So for get recovery it. we but overestimating the that looking midpoint between were to not

Unidentified Analyst

that customer then and that now? there particular out that, is right perspective seeing kind areas are an anything would end or you of strengths weakness Appreciate call surprising from you are

Thomas Schmitt

is side strength the from. one benefiting on really, be thing one should the really that thing The we

value wicker high from out, less the end and three or more furniture and discretionary over those years, consumer more patio about of two resilient Medical than some last equipment discretionary kind talk on where You equipment in. higher goods we focus industrial of are remember freight or came goods. medical when we

of what we're high seeing kind tech seeing, equipment more on side, that's the some side. on the So goods and side, consumer the on less firmness we're medical

events events, are going like strong. The out second pointing I that always very thing very,

we up. shows, expected it Our is to concert trade exactly our significantly business where be

is space, good experiences picking example. We pockets goods discretionary think see overall medical I the very, up best some very life are So trends. even experiences, in of in consumer the equipment less and

spending more life again, on we on side, third medical And refrigerator industrial income do and into their bucket on good people the would dishwasher discretionary not non-discretionary I events. do I that that, second and the So improvement see are believe equipment put also.

Unidentified Analyst

stands you? where to thinking could hate but Perfect. through share I tell activity you And interesting maybe walk quarter, in then the third looks in could and you allocation us us M&A, tell Rebecca, capital what the authorization to the and about Tom, what one us the if squeeze now repurchase you're right if

Rebecca Garbrick

with of did in so shares. with, repurchase Sure, repurchased, the do that during us shares were we we what is yeah, we authorized leaves quarter number XXX,XXX we the

our an with about X.X which using drive repurchases program, the night will XXX the share stand which, outstanding year. million less So price last that million of shares share rest left repurchase available let over M&A as of we're through of of still have for we I'll under it's repurchase. that we from Tom the kind to where standpoint, talk

Thomas Schmitt

share or been the Joe to night thing of Yeah, all-time and I analyst, which $XX have the by quarter. shares and you did morning point repurchases statements last just XX,XXX one think about record was out former is I admit out for one and it that Rebecca. that worth bought this the our have We million equivalent the track of an the came didn't reports that I yours, may mentioned,

repurchasing made we into first putting bucket in So choice our a more that of the clearly quarter. capital

at will depressed that even are and in we freight cycle We doing continue very, that same cash strong. fortunate flow very time, are a very, the we very

for enhanced cash We using that be continued will share flow repurchases. a

tuck using acquisitions continue us. cash will sense make in also flow perfect for that We for that

primary our team. continue two LTL, great a Land to years a was Air expedited to Hall areas Express addition our addition be great ago The team, two was JNP to

LTL we'll now. that that's right stations significant We also in terminals, sized continue did one in Chicago third organically a the one We Chicago opened that. area, doing several and opening just have we

in to in our job, really Memphis, Mobile, acquisitions. within way, think look in very the you model Alabama, fill enhanced, organic We some out this and terminal and of geographies Northwest, Edgemont team LTL Chickasaw. following Pacific did still the share tuck it growth, repurchase I if phenomenal is a but at specific So very, expansion,

So think tuck as repurchases. the if share Edgemont a That's put And think acquisitions podium, in on world LTL well Air growth, Chicago, you bronze. of you'd Chickasaw terminal be clearly, organic silver like would Land again, the third as have gold in expansion [ph] rage Express.

Unidentified Analyst

so much for all queue. guys you Thank I'll in time Perfect. the though. the back get

Thomas Schmitt

Joe. you, Thank

Operator

go We'll ahead. the Research. line with Go of Group Wolfe Scott to next

Unidentified Analyst

Scott. is Jake time. the on for this Hi, for Thanks

Thomas Schmitt

Hi, Jake.

Unidentified Analyst

Tom. Hey

first So looking hundredweight and slightly you in still What's expect revenue continue declined into that do per just to that the causing XQ? year-on-year that quarter. forward

Thomas Schmitt

continue answer is the issue this and might revenue hundredweight, -- is we slightly else What's metric. the a lot. not report does, this And the per on Jake. hell a is here like going yes. This Yeah, still best of why and not it's everybody

in Our we length can are drivers but haul and we When of frankly shorter drivers at Team We solo -- sleeping. on and can distances. of drivers drivers, more to shorter they when easier because haul enable economical use when solos that's solo has basically than team sometimes we are to and end been we actually driving them turns shorter and more opportunity load one both have handoff trip. longer we baton then drivers do love only solo And getting and have to and team an take shorter have are between use terrific drivers, sometimes of we lengths the to recruit. equally, drivers. intentional. But afford the which distances, recruit we can easy the distances use not only

in of after by been front tactic actually go but in to a correctly, lengths I length don't in me year-over-year. we've have active my shorter place down memory fall if serves very X.X% we the to and So more haul. me have

of continues hundredweight ex-fuel less mile up basically that. metric. that over you Revenue of at revenue less think and more distances before much out but actually revenue called a at shorter charge going that’s I chose actually when per that equation. that's be because But actually It's metric the the ton takes ton ex-fuel more. is using look revenue per hundredweight, per for imperfect per the we is much mile does shorter out look he smaller powerful I a So reflect agnostic to used distances, The because if metric distance not number an it. the it what revenue a should quality we you

Unidentified Analyst

you and all if quick well, a That's I'm tonnage And not monthly but you April just that'd be in could the helpful. one, helpful? give if number gave as could give consolidated sure a then that quarter you

Rebecca Garbrick

Yeah.

our tonnage daily down So for was XX%. January, our about tonnage,

it X%. And For down February, to saw it for down was XX%. was some we improvement, March, only

between So consolidated -- we us talked and the then blended number, X% year-over-year. April, gets the X% roughly have not we that about given in for decline and about, a but XX% the

Unidentified Analyst

Alright, Thanks, guys. that's helpful.

Thomas Schmitt

Jack. you, Thank

Operator

line ahead. to [Operator Chris of with Instructions]. We'll next Benchmark. Kuhn go the Go

Chris Kuhn

Rebecca, Hey, Tom. good Hey, morning.

Thomas Schmitt

morning, Good Chris.

Chris Kuhn

the efficiency more Tom, through are it's of Are went Rebecca, kind last briefly? some the same, a that efficiency of quarter, on just those offset measures some just then and you of bit the could -- you of efficiencies, headwinds guys maybe touch the some the headwind. headwinds basically that

Thomas Schmitt

and your we so of Yeah, up. in Chris, I what that think, you did remember did recapping correctly, job good really follow-up, a if I right

speaking, Roughly Force Forward initiatives, of said you were Shape. then neighborhood which to which at remind fuel those So ended looked Force, are what kind that just looked we up expectation how Game XXXX, called we we expect by economy bridge about and year, the we revenue with we Forward you that over we came yeah, will five then were came sluggish Institute in up those at last EPS, And equal say Chris, EPS initiatives, did foresight and conversation, months which talking who these fully halves. Washington have familiar actually we the was Forward been do up somewhere And Shape like, for coming this much Game not $X.XX we the be six enough do to last to know, the management on you of we cost we with an to least X.XX with EPS. worth as of adjusted at where and the and us down those cost we call exact year.

about $X.XX of up and each respectively. $X.XX between one So made them

cost that for side, of and thought sluggish make those headwinds revenue the and so management to enough have on counter between the we would economy. up side initiatives activity we fuel And all of

this we and talked heavier saw is the the on through Stefan headwind expected. to obviously, is operations saw therefore a door revenue commercial fuel the this we're we like also whole the call, EPS about, this sluggish team ones exercise. headwind our Pricing the [ph] with economy what beginning these takes runs our And we of impacted. at was we and monthly team, what door What doing the of initiatives, basis. than were just updating Analytics and to specifically more what some bridges airport airport, And as as negatively the core customers both well Vermeil

of So in on some Forward if the cost are ones about of and the Most initiatives, think are of revenue red side, of management, the working. kind territory. green the because you on Game sluggish ones Shape economy side, the these management efficiency actually

huge a in If is right Go now, Forward bridge of obviously, underlying Well component which quality morning my remarks. is point working. the that's is EPS temporarily, third everything you the was this in my And volume out, actual component that working. actually take essence that's what

of deep the down. the that see is However, we the it pulling of suppression now right volumes impact

every domestic brokerage, We Okay. read. That's we with LTL through have door by read. call I the customers Forward and impacted of think door LTL economy, revenue [indiscernible] more on deeply the them follow more with we to And truckload actually, one then international but our components, Is a that the the your walk even Force, airlines, actually brokerage that's that's forwarders single can think you. sluggish with to forwarders. also and deeply customer, more initiatives, we getting you up point, have mean, individual can I about

impacted that low So then actually ones trade all in are the that economy, are by stands the sluggish initiatives, show they the efficiency do, actually show impacted shows, at they ones And by show of The miles levels green. super cost that don't red. that, red. we management, the our our being are ones very they out Outside management. do, more as lower less record one do half green those because do we that's

very we Forward We managing should That's So this But that. how way have intend where to, the more alive Like team. just execution of of feel perhaps our and is we than Forward, expected. we very, they're been I pull Go more the bad. is down kicking. proud conservative had on Go

Chris Kuhn

Yeah. Thanks. later. Okay, We'll alright, talk Thank you. Tom.

Thomas Schmitt

Chris. Thanks,

Operator

And queue this we time, questions proceed. at no you in may further have

Thomas Schmitt

much. Okay, does. also thank with who us, in listened you company been partners, just have to partnering thought of so the it you as work making And well, Alan, but those action who way and as remarkable this thank also you partners, not

We are in a freight recession.

throttle. for you the full and operated not are We support there see out existing It appropriately a at Thank actually freight for to We'll very, all accessible and we're concluding get we partnership. I And partners. quality think yet. clean in calls Go execution having working our high business Alan, together. happened even that, customers forward with when of it made call. priced to And look the very I this of more better Forward, precision with environment, and your

Operator

conference www.forwardaircorp.com at Please be Air’s shortly available on Air’s website remember will call. relations Thank this call. quarter earnings investor XXXX the you. webcast this section that first That Forward concludes after Forward of

now disconnect. You may

Thomas Schmitt	President, CEO & Chairman
Rebecca Garbrick	CFO & Treasurer
Jack Atkins	Stephens Inc.
Unidentified Analyst -
Unidentified Analyst	Wolfe Research
Chris Kuhn	Benchmark Securities

Forward Air (FWRD) 2 May 232023 Q1 Earnings call transcript