Q4 2023 Forward Air Corp Earnings Call

Operator: Good day, and welcome to the Forward Air fourth quarter and full year 2023 earnings conference call. At this time, all participants have been placed in 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 keypad. 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.

Good day and welcome to the forward Air fourth quarter and full year 2023 earnings conference call.

At this time, all participants have been placed on a listen only mode.

And the floor will be opened for your questions. Following the presentation.

If you would like to ask a question at that time. Please press star one on your telephone keypad.

If at any point. Your question has been answered you may remove yourself from the queue by pressing star cheap.

So others can hear your questions clearly, we ask that you pick up your handset for best sound quality.

Operator: We ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. 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 Interim CEO Michael Hance and CFO Rebecca Garbrick. By now, you should have received the press release announcing our fourth quarter 2023 results, which was furnished to the SEC on Form 8K and on the wire yesterday Forward Air has determined that it is unable to file its annual report on Form 10-K for the year ended December 31, 2023, by the prescribed due date, without unreasonable effort or expense, as the company requires additional time to complete its financial statement reporting process in light of recent significant company transactions.

Lastly, if you should require operator assistance, please press star zero.

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 Dot forward Air Corp Dotcom.

With us this morning, our interim CEO, Michael Hertz, and CFO Rebecca corporate.

By now you should have received a press release announcing our fourth quarter 2023 results, which was furnished to the FCC on form 8-K and on the wire yesterday after the market close.

Forward Air has determined that it is unable to file its annual report on Form 10-K for the year ended December 31, 2023 by the prescribed due date without unreasonable effort or expense as the company requires additional time to complete its financial statement reporting process in light of recent significant company.

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Operator: This process includes finalizing the accounting treatment and related disclosures of the debt issued in connection with the acquisition of Omni, which impacts the company's balance sheet as of December 31st, 2023, and the statement of cash flows for the year then ended. The Company expects to file its annual report on Form 10-K for the year ended December 31, 2023, within the extension period of 15 calendar days as provided under Rule 12B-25 under the Securities Exchange Act of 1934, as amended. 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 that 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 first quarter 2024 and fiscal year 2024. These statements are not guarantees 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.

This process includes finalizing the accounting treatment and related disclosures at the debt issued in connection with the acquisition of omni, which impacts the company's balance sheet as of December 31st 20, twenty-three and statement of cash flows for the year then ended.

The company expects to file its annual report on Form 10-K for the year ended December 31st 2023 within the extension period of 15 calendar days as provided under rule 12, B Dash 25 under the Securities Exchange Act of 1934 as amended.

Please be aware that certain statements in the company's earnings press released 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 first quarter 'twenty 'twenty, four and fiscal year 'twenty 'twenty four.

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.

Operator: For additional information concerning these risks and factors, please refer to our filings with the Securities and Exchange Commission and the press release and webcast 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 events, 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.

For additional information concerning these risks and factors. Please refer to our filings with the Securities and Exchange Commission and the press release and webcast 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.

Company undertakes no obligation to update any forward looking statements, whether as a result of new information future events 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.

Operator: 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 the press release issued, which is available under the Investors tab on our website. Now, I'd like to turn the conference over to Michael Hance.

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 the press release issued which is available in the investors tab on our website.

Now I'd like to turn the conference over to Michael Hance Michael.

Michael L. Hance: Good morning, everyone. Thank you for joining us on the call today. Before we jump into the quarter, I just wanted to take a few moments to acknowledge the recent changes at Forward and introduce myself. Forward has been navigating a period of turbulence in the freight market and within our company. The past few months have been bumpy, but I am confident that this is behind us, and we are all united and energized by the opportunities ahead. We are moving forward. We appreciate the support we've received from many listening to the call today. We value your feedback and perspectives. And as you've seen from recent announcements, our board has taken decisive action to ensure Forward is on the right track for the future. Earlier this month, the board appointed me interim CEO in addition to my position as chief legal officer and secretary. Now, I've been with this company for 18 years in a number of different roles, in legal, and in HR, and have a strong understanding of the transportation industry and forwards business. Taking on this role is personal for me. It is a position of trust.

Good morning, everyone. Thank you for joining the call today.

Before we jump into the quarter I just wanted to take a few moments to acknowledge the recent changes it forward and introduce myself.

Forward has been navigating a period of turbulence in the freight market and within our company.

The past few months have been bumpy, but I am confident that is behind us and we are all United and energized by the opportunities ahead.

We are moving forward. We appreciate the support we received for many listening to the call today, we value your feedback and perspectives and as you've seen from recent announcements. Our board has taken decisive action to ensure forward is on the right track for the future.

Earlier this month the board appointed me interim CEO. In addition to my position as Chief Legal Officer and Secretary.

I've been with this company for 18 years in a number of different roles and legal and HR and have a strong understanding of the transportation industry and forwards business.

Taking on this role is personal for me.

It is a position of trust.

Michael L. Hance: I care deeply about this company's success and the great people who come to work every day and serve our customers. I know that our employees, our customers, and our shareholders are counting on us. My mandate during this period as interim CEO is to make sure we have the appropriate leadership to move forward while our board's dedicated search committee promptly identifies a top quality CEO to run the company during the next phase of our future growth and development. I want to be clear with you.

I care deeply about this company success and the great people, who come to work everyday and serve our customers I know that our people our customers and our shareholders are counting on us.

My mandate during this period as interim CEO is to make sure we have the appropriate leadership to move forward. While our board has dedicated search committee promptly identify a top quality CEO to run the company during the next phase of our future growth and development.

I want to be clear with you.

Michael L. Hance: We are not waiting or standing still during this interim period. Instead, we are rolling up our sleeves and doing the challenging and exciting work of integrating Forward and Omni and positioning us to quickly capture the value this acquisition has made possible. I have the privilege of working with an incredibly capable management team, now complemented by colleagues from Omni. We are laser-focused on integration. Over my 18 years with the company, I have come to firmly believe that the key to forward success lies squarely with the dedicated people consistently delivering incredible service to our customers for their mission-critical freight. Our LTL customers expect and enjoy the highest levels of service and the lowest claims and damage ratios in the industry. This continued without interruption during the last year, and it's not changing.

We are not waiting or standing still during this interim period.

Instead, we are rolling up our sleeves and doing the challenging and exciting work of integrating forward in omni and positioning us to quickly capture the value. This acquisition is made possible.

I have the privilege of working with an incredibly capable management team now complemented by colleagues from omni we are laser focused on the integration.

Over my 18 years with the company I have come to firmly believe that the key to forward success lies squarely with the dedicated people consistently delivering incredible service to our customers for their mission critical freight.

Our L. P L customers expect and enjoy the highest levels of service and lowest claims and damage ratios in the industry.

This continued without interruption during the last year and it's not changing.

Michael L. Hance: We were delighted to learn that OmniSuccess was built on the same foundation of high quality service. A key part of my new role is to ensure that we do not waver in our collective commitment to this core principle and that it acts as the cornerstone of our integration plan. Now, I've been in my new role for about three weeks now, so I won't attempt to be exhaustive on this call. Here's what we're gonna do.

We have been delighted to learn that omni success was built on the same foundation of high quality service.

A key part of my new role is to ensure that we do not waiver in our collective commitment to this core principle and that it acts as the cornerstone of our integration plan.

Yeah I've been in my new role for about three weeks now so I won't attempt to be exhaustive on this call here.

Here's what we're gonna do today, we're going to provide you with an overview of 40 years Q4 financial performance as well as the current performance of the legacy forward Air business and our path to deleveraging through prudent capital allocation.

Michael L. Hance: Today, we're gonna provide you with an overview of Forward Air's Q4 financial performance, as well as the current performance of the legacy Forward Air business and our path to deleveraging through prudent capital allocation. We will then provide updates on customer retention, Omni's integration, and the combined company. Now, the information we provide about Omni's performance and our integration progress will be at a high level at this point.

We will then provide updates on customer retention omnis integration and the combined company.

The information, we provide about omnis performance and our integration progress will be high level at this point.

Michael L. Hance: But we are committed to transparency and providing you with more detailed updates on both topics as we move forward. Before turning the call over to Rebecca, I do want to note up front that, during this period of transition, we will not be issuing quarterly guidance, and we'll evaluate when the timing is right to provide it on a go-forward basis. Now, I turn the call over to Rebecca to run through the quarter.

But we are committed to transparency and providing you with more detailed updates on both topics as we move forward.

Before turning the call over to Rebecca I do want to note upfront that during this period of transition we will not be issuing quarterly guidance and will evaluate when the timing is right to provide it on a go forward basis.

And now over to Rebecca to run through the quarter.

Rebecca J. Garbrick: Thanks, Michael, and good morning, everyone. I'll start by briefly touching on the 10-K, which was mentioned at the top of the call. We will require additional time to complete our financial reporting and file our 2023 Form 10-K, in light of the compressed closing timeline of the Omni Acquisition. We expect to file it within the extension period of 15 calendar days.

Thanks, Michael and good morning, everyone I'll start by briefly touching on the 10-K, which was mentioned at the top of the call. We will require additional time to complete our financial reporting and file our 2023 point 10-K.

In light of the compressed closing timeline of the omni acquisition, we expect to file it within the extension period of 15 calendar days, what remains outstanding is finalizing the technical accounting treatment of the debt connected with the acquisition, which would impact our balance sheet at December 31, 2023 and statement of cash flows for the.

Rebecca J. Garbrick: What remains outstanding is finalizing the technical accounting treatment of the debt connected with the acquisition, which would impact our balance sheet at December 31, 2023 and statement of cash flows for the year then ended. However, we are confident that the outstanding item will have no impact on our income statement. Let's move on to reviewing the fourth quarter.

Year than it did.

However, we are confident that the outstanding item will have no impact on our income statement.

Let's move on to reviewing our fourth quarter and.

Rebecca J. Garbrick: In Q4, we announced the sale of our final mile business to Hub Group in December for an estimated total cash consideration of $260 million. Our results are adjusted for the sale of that business, which had an impact on our fourth quarter guidance. As a result of the Omni transaction, our reported fourth-quarter results reflect two one-off items that impact profitability and free cash flow generation. The first is the professional fees or transaction costs incurred in connection with the acquisition of Omni Logistics in the amount of $30 million. While all these costs were incurred in 2023, the company expects to have transaction costs in the first quarter in connection with the closing of the acquisition in addition to integration costs. The second are the net interest payments due and payable on the high yield notes in term loan B in the amount of $21 million. The $21 million reflects the interest expense offset by the interest income earned on the investment of the proceeds. Both the high-yield notes in Term Line B closed into ESCO during the fourth quarter.

In Q4, we announced the sale of our final mile business to have great in December for an estimated total cash consideration of $260 million or <unk>.

Adult are adjusted for the sale of that business, which had an impact on our fourth quarter guidance.

As a result of the army transaction, our reported fourth quarter results reflect Q1 off items that impact profitability and free cash flow generation.

The first are the professional fees or transaction cost incurred in connection with the acquisition of army logistics and the amount of 30 million.

But all these costs were incurred in 2023, the company expects to have transaction costs in the first quarter in connection with the closing of the acquisition in addition to integration costs.

The second are the net interest payment due and payable in the high yield notes and the term loan b and the amount of 21 million.

21 million reflects the interest expense offset by the interest income earned on the investment of the Tracy.

Both the high yield notes and the term loan b closed into escrow during the fourth quarter.

Rebecca J. Garbrick: As we continue to execute our growth strategies in the fourth quarter, we saw positive trends in our less than truckload business, with pounds per day growth of more than 6% over the same period last year. Our freight quality also improved, as weight per shipment increased more than 11 percent to 815 pounds over the prior year period. During the fourth quarter, we saw a 2.5% increase in revenue per shipment, excluding fuel, and an 8% decrease in revenue per hundredweight, excluding fuel. The decline in revenue per hundredweight, excluding fuel, was primarily driven by a shift in the business mix as we execute upon the expansion of our door-to-door solution. Challenging market conditions persisted throughout the quarter, particularly in the intermodal and truckload brokerage lines of business, which led to decreased customer demand for these services, a pattern that we've seen since the second quarter. This resulted in Q4 revenue of $338 million on a consolidated continuing operations basis, compared to $403 million, a 16% decline.

As we continue to execute our growth strategies in the fourth quarter, we saw positive trends in our less than truckload business with pounds per day growth of more than 6% over the same period last year.

Our freight quality also improved its weight per shipment increased more than 11% to 815 pounds over the prior year period.

During the fourth quarter, we thought 2.5% increase in revenue per shipment, excluding fuel and an 8% decrease in our revenue per hundred weight excluding fuel.

A decline in our revenue per hundred weight, excluding fuel was primarily driven by the shift in the business mix as we execute upon this expansion of our dawn endorsed Alicia.

Challenging market conditions persisted throughout the quarter, particularly in the intermodal and truckload brokerage lines of business, it which led to decreased customer demand for these services a pattern that we've seen since the second quarter.

This resulted in Q4 revenue of $338 million on a consolidated continuing operations basis compared to 403 million% to 16% decline.

Rebecca J. Garbrick: This was within the guidance range of 9% to 19% decline. Operating income on an adjusted basis was $32.6 million compared to $58.4 million for the fourth quarter, which reflects the add-back of the one-off costs that I mentioned earlier. We reported adjusted net income per diluted share on a continuing operations basis of $0.81, above the guidance range of $0.78 to $0.80. Our free cash flow for the fourth quarter was $48.9 million compared to $43.5 million for the same period in the prior year.

This was within the guidance range of 9% to 19% decline.

Operating income on an adjusted basis was $32 6 million compared to $58 4 million for the fourth quarter, which reflects the add back of the one off costs that I mentioned earlier.

We reported adjusted net income per diluted share on a continuing operations basis of 81, but.

Above the guidance range of 78 to 80 is that.

Our free cash flow for the fourth quarter was $48 9 million compared to $43 5 million for the same period in the prior year.

Rebecca J. Garbrick: The free cash flow was impacted by the payment of the professional fees incurred in connection with the acquisition of Omni. Looking to 2024, in January, as noted in our earlier press release, weight per shipment increased 9.8 percent. Pounds per day also increased 9.2 percent compared to the same period last year. Revenue per ton-mile also increased 1.9% over the prior year, excluding fuel. For the first few weeks in February, our pounds per day increased 8% over the same period last year.

Free cash flow was impacted by the payment of the professional fees incurred in connection with the acquisition of Hanmi.

Looking to 'twenty 'twenty four and January as noted in our earlier press release weight per shipment increased nine 8% pounds per day also increased nine 2% compared to the same period last year.

Revenue per ton mile increased one 9% over the prior year excluding fuel.

For the first few weeks in February our pounds per day increased 8% over the same period last year. This increase excludes the impact of folding the army network into the afford it network.

Rebecca J. Garbrick: This increase excludes the impact of folding the OMNI network into the forward network. The 5.9% general rate increase we announced in December went into effect in February and will enable us to continue to serve customers with the same precision execution in an environment with rising operating costs. The capture rate was higher than 2022, and the rate increase is commensurate with the increase in operating costs expected for 2024. With regard to our capital position, we are still awaiting AMI's 2023 audited financials, but our net leverage ratio at the close of the transaction was estimated to be 5.2 times. This is based on our leverage formula used in the Lenders Net Debt to EBITDA Covenant. The calculation includes the full realization of cost-energy opportunities and a maximum of $50 million of cash as an offset to debt. As of December 31, the combined entity had more than $200 million in cash on hand.

Five 9% general rate increase we announced in December went into effect in February and will enable us to continue to serve customers with the same precision execution in an environment with rising operating costs.

The capture rate was higher than 2022 and the rate increase is commensurate with the increase in operating costs expected for 2024.

With regards to our capital position, we are still awaiting armies 2023 audited financials, but our net leverage ratio at the close of the transaction was estimated to be 5.2 times.

This is based on our leverage formula used in our lenders net debt to EBITDA Covenant calculation includes the full realization of cost synergy opportunities and a maximum of 15 million of cash as an offset to that.

As of December 31, the combined entity had more than 200 million cash on hand.

Rebecca J. Garbrick: We are working to optimize our capital structure and would like to share a number of relevant terms of our existing debt facilities. First, we announced several weeks ago that we were able to amend our credit facility to temporarily increase the maximum consolidated first lien net leverage ratio permitted by our covenant. This amendment provides headroom as we continue to focus on our integration of the two companies and realize the cost-synergy opportunities. We also repaid $80 million as the Aggregate Principal on Term Line B, along with accrued and unpaid interest.

We are working to optimize our capital structure and we'd like to share a number of relevant terms of our existing debt facilities.

First we announced several weeks ago that we were able to amend our credit facility to temporarily increase the maximum consolidated first lien net leverage ratio permitted by our Covenant. This amendment provides headroom as we continue to focus on our integration of the two company and realize the cost synergy opportunities.

We also repaid $80 million aggregate principal on the term loan b, along with accrued and unpaid interest.

Rebecca J. Garbrick: This reduced our net leverage ratio by 0.2 times and aligns with our capital allocation policy to use cash generated from the divestiture of businesses for the repayment of debt to accelerate the path to be leveraged. Going forward, our debt mix of Term Line B and bonds provides us with payment flexibility, and we have additional capacity on our revolver. Under the new covenants, we are committed to returning to net leverage of four and a half times by the end of 2025. We are committed to de-risking our capital structure, and we are already undertaking several initiatives to de-leverage. As we have previously communicated, our policy is to run at a net leverage ratio of under two times, and we are committed to taking the necessary steps to adhere to that policy. These steps include a key focus on profitability of the combined entity and the realization of cost energy to generate cash from operations, as well as an accelerated portfolio review to identify potential divestitures.

This reduced our net leverage ratio by 0.2 times in our lives and aligns with our capital allocation policy do you use cash generated from the divestiture of businesses for the repayment of debt to accelerate the path to deleverage.

Going forward, our debt mix of term loan B and bonds provides us with the payment flexibility and we have additional capacity on our revolver.

Under the new covenants, we are committed to returning to net leverage of four and a half times by the end of 2020 five.

We are committed to derisking, our capital structure, and we are already undertaking several initiatives to deleverage.

As we have previously communicated our policy is to run at a net leverage ratio of under two times and we are committed to taking the necessary steps to adhere to that policy.

These steps include a keen focus on profitability of the combined entity and the realization of the cost synergies to generate cash from operation.

As well as an accelerated portfolio review to identify potential divestitures.

Rebecca J. Garbrick: As part of the AMI integration efforts, we are identifying ways to streamline our portfolio and accelerate the repayment of debt. In response to the recent acquisition of Omni, we are making adjustments to our capital allocation policy and will prioritize the repayment of debt ahead of dividends, share repurchases, and M&A activity. We will continue to reinvest in our operations through capital expenditures that positively affect productivity, automation, and the replacement of vintage equipment to improve the operating efficiency of our LTL network. In line with our focus on reducing leverage, as we announced in our earnings release, we have made a decision to suspend our quarterly dividend beginning with the first quarter of 2024, which would typically have been paid in March.

As part of the omni integration efforts, we are identifying ways to streamline our portfolio and accelerate the repayment of debt.

In response to the recent acquisition of Omni, we are making adjustments to our capital allocation policy and we will prioritize the repayment of debt ahead of dividend.

Share repurchases and M&A activity, we will continue to reinvest into our operations through capital expenditures at that positively affect productivity automation and the replacement of vintage equipment to improve the operating efficiency of our L. T O network.

In line with our focus on reducing leverage as we announced in our earnings release, we have made the decision to suspend our quarterly dividend beginning with the first quarter of 'twenty 'twenty, four which would typically have been paid in March we will provide updates in connection with reinstating our quarterly dividend and we made progress with our capital structure and the achievement of our net lever.

Rebecca J. Garbrick: We will provide updates in connection with reinstating the quarterly dividend as we make progress with our capital structure in the achievement of our net leverage target. While we still await the audited financial statements for Omni for 2023, we wanted to provide context around trends we are seeing in Omni's businesses. In line with observations from our own business, certain of Omni's businesses were impacted by challenging market conditions in 2023 that led to decreased customer demand.

Target.

While we still await the audited financial statements for omni for 2023 we wanted to provide context around trends, we are seeing in omnis businesses.

In line with the observations for own business certain of them on these businesses were impacted by the challenging market conditions in 'twenty two 'twenty three that led to decreased customer demand.

Rebecca J. Garbrick: In the first few months of 2024, we are beginning to see demand improvements in the domestic market, though it remains soft internationally. We are cautiously optimistic about improvements in the back half of the year. I'll now turn the call back to Michael to discuss the path forward. Thanks, Rebecca.

In the first few months of 'twenty 'twenty four we are beginning to see demand improvements in the domestic market, though it remains soft internationally, we are cautiously optimistic about improvements in the back half of the year.

I'll now turn the call back to Michael to discuss the path forward.

Thanks, Rebecca one of my top priorities is to ensure that we successfully integrate omni and capitalize on the many opportunities that it will create for our customers employees and shareholders.

Michael L. Hance: One of my top priorities is to ensure that we successfully integrate Omni and capitalize on the many opportunities that it will create for our customers, employees, and shareholders. We are taking a thoughtful approach to executing our integration plan, with a strong focus on combining our employees and services seamlessly and without disruption. As we move through integration, customer service and retention remain a top priority. We are committed to serving and honoring our commitments with our legacy customers, and we will continue to focus our efforts on growing and winning business with them. There will now be three distinct commercial channels within the combined organization: Wholesale, Shipper Asset, and Omni Services.

We are taking a thoughtful approach to executing our integration plan with a strong focus on combining our employees and services seamlessly and without disruption.

As we moved through integration customer service and retention remain top priorities.

We are committed to serving and honoring our commitments with our legacy customers and we will continue to focus efforts on growing and winning business with them.

There will now be three distinct commercial channels within the combined organization wholesale shipper asset and omni services.

Michael L. Hance: Our commercial strategy is built around meeting our customers where and how they want to buy. Our wholesale customer channel includes our legacy forward customers, including freight forwarders, airlines, and 3PL. We are committed to continuing to provide them with our premium LTL services to enable them to grow their business. Our Shipper Asset Customer Channel includes direct shippers that require an asset-based provider to increase their supply chain control. And lastly, our Omni Services Channel includes customers with supply chain goals based on unique, curated, end-to-end solutions. Of course, the quality of our service to customers in each of these channels will remain first rate. I cannot emphasize this enough.

Our commercial strategy is built around meeting our customers, where and how they want to buy.

Our wholesale customer channel includes our legacy forward customers, including freight Forwarders Airlines and <unk>.

We are committed to continuing to provide them with our premium L. T L services to enable them to grow their businesses.

Our shipper asset customer channel includes direct shippers that require an asset based provider to increase their supply chain control.

And lastly, our omni services channel includes customers with supply chain goals based on unique curated into installations.

Of course, the quality of our service to customers in each of these channels will remain first rate I cannot emphasize this enough.

Michael L. Hance: We are committed to taking care of all of our customers across these three channels. We are pleased with the customer response we've seen so far. Volumes from our wholesale customer channel remain strong. In the six months before and after the transaction was announced, Forward saw a decrease in volumes with our domestic forwarders of 8.9%.

We are committed to taking care of all of our customers across these three channels.

We are pleased with the customer response, we've seen so far volumes from our wholesale customer channel remained strong and the six months before and after the transaction was announced forward saw a decrease in volumes with our domestic forwarders of eight 9%, but we believe almost all of that decline is driven by a softer freight market rather than customer attrition.

Michael L. Hance: But we believe almost all of that decline is driven by a softer freight market rather than customer attrition. That view is supported by some of the negative volume developments of our LTL peers in Q4. Also, volumes with 50% of our legacy customers actually grew during the last six months. Earlier this month at the Air Cargo Conference held in Louisville, Forward was recognized by the Air Forwarders Association as the 2024 Surface Vendor of the Year, an award reflecting how our great service has helped our legacy customers grow their businesses over the past year.

That view is supported by some of the negative volume development of our L. T L peers in Q4.

Also volumes with 50% of our legacy customers actually grew during the last six months.

Earlier this month at the Air cargo conference held in Louisville forward was recognized by the Air Forwarders Association as the 'twenty 'twenty four surface vendor of the year and award, reflecting how our great service has helped our legacy customers grow their businesses over the past year.

Michael L. Hance: However, we realize that we have to earn the business of all our customers every single day, and we plan to do just that through our integration and beyond. Since closing the transaction last month, we have seen some early wins resulting from the acquisition. To date, we've captured $17 million of annualized new premium LTL business from Omni customers in the fulfillment and entertainment space.

However, we realize that we have to earn the business of all our customers every single day, and we plan to do just that through our integration and beyond.

Since closing the transaction last month, we have seen some early wins, resulting from the acquisition.

To date, we've captured $17 million of annualized new premium L. T L business from omni customers in the fulfillment and entertainment spaces.

Michael L. Hance: We are still in the early days of our integration work, but we believe that it's a good start and that more wins are to come. I'd like to now spend some time discussing the Omni integration and how we're positioning forward for success in its next phase of growth. As one company, we are laser-focused on creating value for employees, customers, and shareholders. We continue to believe in the industrial logic of the transaction and the significant and attractive synergies opportunities to be unlocked. As part of the integration process, we are revisiting those targets amidst the softer freight environment and identifying new pockets of synergies, which we will provide updates on in the future. This combination creates the category leader in the expedited LTL market built on precision execution and provides customers with a less than truckload service that is the best in the industry for damage-free, intact, on-time shipment. Among others, we see two major opportunities coming out of the transaction. First, doing business with Omni's customers who have premium LTL needs.

We are still in the early days of our integration work, but we believe that's a good start in that more Windsor to come.

I'd like to now spend some time discussing beyond the integration and how we're positioning forward for success in its next phase of growth.

As one company, we are laser focused on creating value for employees customers and shareholders.

We continue to believe in the industrial logic of the transaction and a significant and attractive synergy opportunities to be unlocked.

As part of the integration process, we are revisiting those targets amidst the softer freight environment and identifying new pockets of synergies, which we will provide updates on in the future.

This combination creates the category leader and expedited L. P. L market built on precision execution and provides customers with a less than truckload service that is the best in the industry for damage free intact on time shipments.

Among others, we see two major opportunities coming out of the transaction.

First doing business with the omnis customers, who have premium L. T. L needs. These customers need the kind of network, we offer with a high level of service low claims and visibility all in one place we've already realized some of these opportunities.

Michael L. Hance: These customers need the kind of network we offer with a high level of service, low claims, and visibility all in one place. We've already realized some of these opportunities. And second, we're well positioned to work with Omni's customers who have international operations with domestic network needs. Our team of operators and transportation professionals, led by my colleague and 28-year Forward veteran Chris Rubel, has our LTL network running at the same high level of performance as always. This makes Forward the most compelling choice for customers with high-value, mission-critical, and time-sensitive freight needs, and we plan to focus on that portion of the market, not using intermediaries.

And second we are well positioned to work with on these customers who have international operations with domestic network needs.

Our team of operators and transportation professionals led by my colleague and 28 year forward veteran Chris Ruble has our LPL network running at the same high level of performance as always.

This makes forward the most compelling choice for customers with high value mission critical and time sensitive freight needs and we plan to focus on that portion of the market not using intermediaries. We believed that the size of that market will allow us to grow our direct ship business, while continuing to serve and assist our intermediary freight forwarder customers in growing their business.

Michael L. Hance: We believe that the size of that market will allow us to grow our direct shipper business while continuing to serve and assist our intermediary freight forwarder customers in growing their business. Also, as Rebecca has already noted, part of our integration plan involves a portfolio review to assess the fit of each of our businesses within the company's overall strategic plan. Our plan is to divest of any businesses that are determined not to fit and use the proceeds from those divestitures to accelerate our path to deleverage.

Yes.

Also as Rebecca has already noted part of our integration plan involves a portfolio review to assess the fit of each of our businesses within the company's overall strategic plan.

Our plan is dead or divesting of any businesses that are determined not to fit and use the proceeds from those divestitures to accelerate our path to deleveraging.

Michael L. Hance: I would like to now sort of acknowledge the great resources we have at the board level for our integration work. It's been a pleasure to have Gil West leading our board's recently formed integration committee, and I've been working closely with him, the committee, and other senior leaders to ensure a smooth integration process. Gills is the former Senior Executive Vice President and Chief Operating Officer at Delta Airlines, and he led the successful integration of numerous transformational transactions.

I would like to acknowledge the great resources, we have at the board level for our integration work, it's been a pleasure to have Gil West leading our board recently formed integration Committee and I've been working closely with him the committee and other senior leaders to ensure a smooth integration process.

As the former senior Executive Vice President and Chief operating Officer at Delta Airlines, and he's led the successful integration of numerous transformational transactions.

Michael L. Hance: Moving forward, we will provide a dashboard to track progress of the integration focused on SynergyCat, and we're already seeing initial success. We have folded Omni's Linehaul business into the Forward Network, which has led to a year-over-year pounds-per-day increase of more than 20% in the first week post-closing. We look forward to providing an update on our progress in the coming months. In my time at Forward, I've seen that if you take care of your people, they will take care of your customers, which drives positive and sustainable results. In my role as Interim CEO, I remain committed to bringing these two high-quality, hard-working teams together, working closely with the Board, Rebecca, Chris Rubel, Nancy Ronning, and our other senior leaders. I view my mandate during this transitional period as providing stable leadership that facilitates the integration of Omni, the execution of Ford's business plan, and the continued development and enhancement of our customer relationships.

Moving forward, we will provide a dashboard to track progress of the integration focused on synergy capture.

And we're already seeing initial success, we have folded on these long haul business into the forward network, which has led to a year over year pounds per day increase of more than 20% in the first week post closing we.

We look forward to providing an update on our progress in the coming months.

In my time at for it I've seen that if you take care of your people they will take care of your customers, which drives positive and sustainable results.

In my role as interim CEO I remain committed to bringing these two high quality hard working teams together working closely with the board Rebecca Chris Ruble Nancy Ronnie at our other senior leaders.

I view my mandate during this transitional period as providing stable leadership that facilitates the integration of omni the execution of <unk> business plan and the continued development and enhancement of our customer relationships.

As we charge ahead with creating value. Our board has formed a search committee and is working diligently to identify a new leader, who will then be in a position to outline the next phase of strategy and financial targets.

Michael L. Hance: [inaudible] We look forward to providing an update on those efforts when appropriate. In closing, we are focused on smoothly integrating Omni and Forward while continuing to serve our customers with our usual level of excellence. The combined entity will be even better positioned to excel in the expedited LTL market. I'm confident the next phase of Forward's growth will be a successful one, and I'm determined to ensure that Forward successfully navigates this transition while delivering value to our shareholders, customers, and teammates. With that, let's open up the lines for comments and questions. Operator?

We look forward to providing an update on those efforts when appropriate.

In closing we are focused on smoothly integrating omni and forward, while continuing to serve our customers with our usual level of excellence they.

The combined entity will be even better positioned to excel in the expedited L. T L market.

I'm confident the next phase of forwards growth will be a successful one.

And I am determined to ensure that forward successfully navigate this transition while delivering value to our shareholders customers and teammates.

With that let's open up the lines for comments and for questions operator.

Operator: at this time. If you have a question or comment, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2.

At this time.

If you have a question or comment please press star one on your telephone keypad if.

If at any point. Your question is answered you may remove yourself from the queue by pressing star two.

Operator: Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Thank you. Our first question comes from Scott Group with Wolf Research. Please go ahead. Hey, thanks. Good morning.

Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Thank.

Thank you.

Our first question comes from Scott Group with Wolfe Research. Please go ahead.

Hey, Thanks, Good morning, I guess, a lot to ask maybe I just want to start Rebecca can you just give us an update sort of pro forma where we are today from a.

Scott H. Group: I guess I have a lot to ask. Maybe I just want to start, Rebecca. Can you just give us an update, sort of pro forma, where we are today from a cash standpoint, total debt. And then I think you said the leverage today is 5.2 times, but I may have heard that includes the full expectation for synergies. Is that right? And can you just sort of?

Cash standpoint, total debt and then I think you said that you know.

The leverage today is five two times, but I may have heard that includes the full expectation for synergies is that right and then can you just sort of.

Scott H. Group: clarify how much we're assuming there. Yeah, sure, Scott. Happy to.

Clarify how much how much we're assuming there. Thank you yeah sure Scott happy to so you know after we made our $80 million debt repayment. Our total debt outstanding is 1.17 billion today, we still have them you know since December we've maintained that you know more than $200 million of cash.

Rebecca J. Garbrick: So, you know, after we made our $80 million debt repayment, our total debt outstanding is $1.17 billion. Today, we still have, you know, since December, we've maintained more than $200 million of cash on hand, which makes our pro forma net debt around $1.6 billion as of today. In terms of the leverage ratio, the 5.2, you know, we chose to disclose that number, and just to take a step back there, you know, we are still, that is an estimate based on what we've seen in the Preliminary Omni 2023 results, that audit is still ongoing. So, as of today, that number, you know, could shift, but we wanted to give a touch point so people could understand from a leverage ratio standpoint where we are.

On hand, which makes our pro forma net debt around one $6 billion as of today.

In terms of the leverage ratios of 5.2, you know we chose to disclose that number and just to take a step back. There. You know we are still that is an estimate.

And based on what we've seen on the preliminary Army 2023 result that audit is still ongoing so as of today that number you know quick shift, but we wanted to give a touch point. So people can understand from a leverage ratio standpoint, where we are we did calculate that you know in compliance with our leverage covenants for our credit facility.

Rebecca J. Garbrick: We did calculate that, you know, in compliance with our leverage covenants for our credit facility, and so that does include two things, I guess, to note on that. One of which is that it does include a cash netting cap of $50 million, so that would not include the incremental $150 million that we have cash on hand. It also includes the full realized, or the full run rate, of the cost energies of $75 million.

And so that doesn't include <unk>, there's two things I guess to note on that one of which is it doesn't include a cash netting cap of $50 million. So that would not include the incremental 150 million that we have cash on hand. It also includes the full realized the full run rate of the cost synergies of 75.

Michael L. Hance: So those are the two incremental changes that you would see if you were to take that and compare it to a normal net debt leverage ratio. Okay, that's helpful. And then, you know, I totally get not giving guidance yet, but, you know, we've still got to... You know, we've still got to put some models together. Maybe just, like, can you share operating income or adjusted operating income for Omni and Q4, just so you have as close of a number as you can share? And then, I don't know, as we think about, you know, modeling, Q1, I don't know, is the business on an aggregate, should it be profitable, not, any sort of color you can share. Yeah, Scott, I think I'm going to let Michael address just one topic, so we give a little bit of a level setting in terms of what our plan is in giving information about the Combined Entity.

Million dollars.

So those are the two incremental changes that you would see if you were to take that to a normal you know net debt leverage ratio.

Okay. That's helpful and then.

Totally get and I'm, not giving guidance, yet, but we've still got a.

We still got to put some models together and maybe just like can you share like what was what was the operating income or adjusted operating income for omni and in Q4. Just so you know it was close to the numbers you can share and then I don't know as we think about you know.

Modeling Q1, not only do we think that is the business on an aggregate it should it be profitable not any sort of color you can share.

Yeah, Scott I think I'm going to let Michael address you know just one topic. So we give a little bit of level setting in terms of what our plan is in giving information you know about the combined entity. We certainly understand that you know there is a thirst for knowledge of the combined entity and we've had a bit of an unorthodox you know clothing and so let me get Michael the first address <unk>.

Michael L. Hance: We certainly understand that there is a thirst for knowledge about the Combined Entity, and we've had a bit of an unorthodox closing, and so let me get Michael to address one topic first, and then we can tackle some of those. Yeah, Scott, thanks for the call and the question. I would just say, you know, we understand that there is a lot of desire for information, and we've got a desire to provide it. I think, you know, our path to closing was a little unorthodox, as Rebecca said, and so we didn't have the normal ramp-up period you would have in developing information.

And the more we can tackle some of that yes Scott.

Thanks for the call and the question I would just say you know we understand that there is a lot of desire for information and we've got a desire to provide that I think you know we.

Obviously, our path to closing was a little unorthodox as Rebecca said and so.

We didn't have the normal ramp up period, you would get a developing information we're a little behind there, but we're catching up and making good progress and so while we're not ready to share some of the information that you'll be looking for today, we are committed to transparency and we're gonna be providing that to you.

Michael L. Hance: We're a little behind there, but we're catching up and making good progress, and so while we're not ready to share, you know, some of the information that you'll be looking for today, we are, you know, committed to transparency, and we're going to be providing that to you. And our plan really is to have an investor presentation available to do that, but it's just not today, and so I'm sure that Yeah, so Scott, we will, just given the fact that the Omni results are not finalized as of today, we're going to defer on that, you know, in responding to those questions, and we will certainly address those at the end of yesterday if we have that information, you know, finalized and available and, you know, giving you the transparency that you so desire. Okay, I guess, maybe just one last one, maybe this, maybe you can have at least with this part of the model, like, how should we just think about, interest expense? Depreciation, share count, Q1, the year, CapEx, any of those pieces, at least, maybe. Yeah, No, I'm happy to do that for you, Scott.

And our plan really is to have it.

The investor presentation.

Favorable to do that but it's just not today and so I'm sure that we won't be able to.

To provide all the answers to your questions.

Yeah. So I think Scott we will just given the fact that the omni results are not finalized as of today.

I'm going to defer on that you know when responding to those questions in and we will certainly address those at the Investor day as we have that information you know finalized and available and I'm, giving you the transparency that you so desire.

Okay, I guess, maybe just one last one maybe this is maybe you can help at least with this part of the model like how should we just think about like interest expense.

Depreciation and share count Q1, the year Capex.

Those pieces at least maybe yeah, yeah, no happy to do that for you. Scott you know our interest expense just annualized we we do have disappointed out you know we've got a fixed 40, if we think about just our debt 40% fixed 60% is floating so you know just on average our total interest expense for the year annualized it's about 170.

Rebecca J. Garbrick: Our interest expense just annualized. We do have, just to point out, we've got a fixed 40%. If we think about just our debt, 40% is fixed, 60% is floating. So just on average, our total interest expense for the year annualized is about $170 million. So to address that topic of CapEx, as you remember, Forward Air is an asset light model. Omni is similar to an asset light model.

Yeah.

So to address that topic on the Capex I'm as you might remember four there is an asset light model on me is it's similar from an asset light model.

Rebecca J. Garbrick: Both of us run between 1.5 to 2 times revenue from a CapEx standpoint. I would say from a depreciation standpoint, it would be very similar to what you've seen on the forward side. And we've posted some historical financials for Omni. So we wouldn't expect any significant changes in terms of CapEx and depreciation from a combined entity basis. I will just point out that we are still, through integration efforts, figuring out what equipment the combined entity needs to be able to service our customers and run an efficient line haul network and a PUD network. But at this stage, we don't believe that there'll be any significant changes on that front. Alright, I'll let some other people go forward, and maybe I'll get back in the queue.

Both of US you know run between one and a half to two times of revenue from a Capex standpoint, I would say you know from a depreciation standpoint, you know I would say very similar to what you've seen on the Ford side and we've posted some historical financials you know for omni. So we wouldn't expect any significant changes in terms of you know.

Capex and depreciation from our combined entity basis, I will just point out that we are still through integration efforts you know figuring out you know what equipment that combine and she needs to be able to service our customers and running efficient you know line haul network and a pud network. So but at this stage you know we don't believe that there'll be any significant changes on that front.

Yeah.

Alright, I'll, let some other people go for it and maybe I'll get back in queue. Thank you.

Scott H. Group: Thank you. Thank you. Our next question comes from Bascome Majors with Susquehanna. Please go ahead.

Thanks.

Thank you. Our next question comes from Bascom majors with Susquehanna. Please go ahead.

Bascome Majors: Yeah, you know, following up on some of those themes, just to clarify the $170 million debt service, is that a cash expectation for 2024 at current interest rates? Yeah, Bascome, just to clarify, that is just interest expense. There'll be another incremental, you know, $11 million to get to the total debt service. So $181 would be your total cash out the door.

Yeah, Yeah following up on some of those things just to clarify the 170 million debt service is that a cash expectation for 'twenty 'twenty four at current interest rates.

Yeah. That's just to clarify that is just interest expense there'll be another incremental you know 11 million to get to the total debt service. So 181 would be your total cash out the door.

Rebecca J. Garbrick: Okay, so $11 million amortization or payment in principle on top of $170 million in interest. Okay, um, and, you know... To come at it from another angle, I mean, you closed just about a month ago, and, you know, you've already mentioned the unorthodox closed process to get there, but do you think the unlevered cash flow of the combined business will be more than sufficient to support the debt service, or are we at a point where we need to deleverage or have some cyclical improvement? in the midterm to cross that bridge.

Okay, So 11 million amortization or payment of principal on top of 170 million interest exactly.

Okay and <unk>.

So come at it from another angle I mean, you've.

You close just about a month ago and you know.

You've already mentioned the unorthodox close process to get there but.

Yes, do you think the unlevered cash flow of the combined business will be more than sufficient to support the debt service or are we at a point, where we need to deleverage or have some cyclical improvement.

In the mid term two to cross that bridge.

Rebecca J. Garbrick: Yeah, so, you know, look, I think, let me give you a touch point, you know, just for the month of February, because I think this would be, you know, an important item, I think, to help give you a little bit of visibility. So, if we just look at the month of February for the combined entity, the combined entity generated more cash than what would be required if you took that annual, you know, debt service and divided it by 12. We did together generate more cash than what would be needed to service that. So, after we pay our debt service for the month of February, we are cash flow positive from a combined entity standpoint. You know, that doesn't include any of the synergies that we would realize through that integration process.

Yeah. So you know look I think let me give you a touch point you know just for the month of February because I think this would be you know an important an important item I think to help give you a little bit of of you know visibility. So if we just look at the month of February for the combined entity that the combined entity generated more cash in.

Then what would be required if you took that annual debt service and divided it by 12, we did together generate more cash than what would be needed to service that so we are after we pay our debt service from that to February we are cash flow positive from a combined entity standpoint, you know that doesn't include any of the synergies that.

We would realize through that integration process. So we hate to say that the month of February and to give a number there would be fully predictive of the full year, but because it doesn't capture the revenue and cost synergies that we will realize as we complete our integration process, but I think that at least gives you a notion that together.

Rebecca J. Garbrick: So, we hate to say that the month of February and to give a number there would be fully predictive of the full year, but that doesn't capture those revenue and cost synergies that, you know, we will realize as we complete our integration process. But I think that at least gives you a notion that together we are cash flow positive. We can service our debt just based on the month of February.

We are cash flow positive we can service our debt just based on the month of February.

Rebecca J. Garbrick: That's encouraging news. And just to dig further into that, you said that it does not include synergies. In that calculation, are you adding back some of the one-time charges, such as, I don't know, severance for Tom and JJ and professional fees and related transactions? Or is that a fully loaded debt service? Yeah, that's, you know, there would be just a handful. It was minimal for the month of February, so there weren't any, you know, large items like perhaps we saw in the fourth quarter. They were minimal in the month of February.

That's a that's encouraging news and just to dig further in that you said it does not include synergies.

That calculation are you, adding back some of the one time charges such as.

Severance for Tom and Jay Jay and professional fees and and in close related transactions or is that a fully loaded debt service comment.

Yeah. That's you know there would be just a handful it was minimal for the month of February. So there weren't any you know large items like perhaps you know we saw in the fourth quarter. They were minimal in the month of February. So it you know it does exclude some of those one time all these but I would say that they're not at the same level.

Rebecca J. Garbrick: So, you know, it does exclude some of those one-time only items, but I would say that they're not at the same level that you saw in Q4 from those one-off items. Those transaction costs you saw in Q4, you know, whatever we incurred in relation to the closing, most of those were paid out at the time of closing. So we didn't have a tremendous amount of lingering costs that we would need to pay in the month of February. Thank you so much for that.

That you saw in Q4 from those one off items those transaction costs. You saw in Q4, you know whatever we incurred in relation to the closing of most of those were paid out at the time of closing so we didnt have a tremendous amount of lingering cost that we would need to pay in the month of February.

Thank you so much for that before I pass it on anything else you would want us to hear the concern around.

Rebecca J. Garbrick: And before I pass it on, anything else you would want us to hear about the concerns around, the Cash Generating Power of the Business versus the Debt Service, just anything to help your shareholders get more comfortable that, fingers crossed, what you saw in February can continue. Yeah, Bascome, you know, look, I will just point out two things.

The cash generating power of the business versus the debt service just anything to help your shareholders get more comfortable that.

That that you know fingers crossed what you saw in February can continue thank you.

Yeah. That's come you know look I will just point out you know two things you know both companies had some challenging environments in 2020. Three you know as we said you know what we've seen you know some favorability in our business you know with our L. T. O volumes you know in the month of February you know Army has also seen some favorability in their domestic business you know.

Rebecca J. Garbrick: You know, both companies had some challenging environments in 2023. You know, as we've said, we've seen some favorability in our business, you know, with our LTL volumes, you know, in the month of February. Omni has also seen some favorability in their domestic business. You know, both of us still struggle a bit, them on the international side, us a bit, you know, on the LTL, I'm sorry, on the truckload and the intermodal side, all really market-driven, but we know that the combined entity has synergies, cost synergies, that are there for us to be realized. And so, you know, the fact that we had cash flow positive for the month of February, If you look at the two entities back in 2022, and we have published the audited financial statements for Omni, and so when you look at our results, both of us were cash flow positive. And so, we know that there is the ability for the two entities to generate free cash flow. You know the Ford business well.

But I still struggle a bit them on the international side, it's a bit you know on a L. T O I'm, sorry on the truckload and the intermodal side, all really market driven but we know that the combined entity has synergies cost synergies that are there for us to be realized and so you know the fact that we had cash flow positive for the month.

In February given the environment that we're in should be reflective I think of just more positive news to come in terms of being able to generate that cash. If you look at the two and see it back in 2022, and we have published the audited financial statements for Army and so when you look at our results both of us where cash flow free positive and so we know that there.

The ability for the two entities to generate the free cash flow you know the board business well, we can see just based on 22 for the omni business, they're generating cash and we know the combined entity together in the month of February generated cash. So I think the potential is there and it is all about integration and it is all about you know realizing these cost synergies for that earnings.

Rebecca J. Garbrick: We can see just based on 22 for the Omni business that they're generating cash, and we know the combined entity together generated cash in the month of February. So, I think the potential is there. It is all about integration, and it is all about, you know, realizing these cost synergies for that earnings power to be there, and therefore the free cash flow to get back to the levels that you would normally see for the Ford Air side, and then obviously adding in the Omni side. Yeah, I think that's well said, Rebecca.

As you know that earnings power to be there and therefore, the free cash flow to get back to the levels. You know that you would normally see for the Ford Air side, and then obviously, adding in the army side and I think that's well said, Rebecca and Baskin I would just add to that that I think we would want people to know is.

Michael L. Hance: And Baskin, I would just add to that what I think we would want people to know is just our incredible focus on integration and realizing, (inaudible) I think I said it in the script, but we are rolling up our sleeves and doing the good work and are encouraged by what we're seeing. We'll be glad to give you additional information and the future of that program. Thank you both.

Our incredible focus on integration and realizing the synergies and I mean, I think I said it in the script, but I mean, we are you know.

Rolling up our sleeves and doing the good work and encouraged by what we're seeing and we'll be glad to give you additional information in the future on that progress.

Yeah.

Thank you Beth.

Patrick Tyler Brown: Thank you. Our next question comes from Tyler Brown with Raymond James. Please go ahead. Hey, good morning.

Thank you. Our next question comes from Tyler Brown with Raymond James. Please go ahead.

Hey, good morning.

Patrick Tyler Brown: Hey Tyler, morning. Hey, I realize there's obviously a lot going on and I may have missed it, but you guys said in the release that the quarter was in line with expectations, but when or where did you update those expectations to 78 to 80 cents? I mean, I get that maybe that's what was implied in the guidance X for final mile, but did you guys communicate that? Yeah, Tyler, we did just the level set. We didn't change our consolidated guidance.

Hey, Tyler Good morning, Hey, Hey, Hey.

Hey, I realize there's obviously a lot going on and I may have missed it but you guys said in the release that the quarter was inline with expectations, but winter where did you update those expectations to 78 to 80 cents I mean I get that maybe that's what was implied in the guidance extra final mile. But did you guys communicate that.

Yeah. It kind of you know we we did just this the levels that we didn't change our consolidated guidance that still face the same from that from an EPS standpoint of 98 cents to a dollar to and from the revenue side, a decline of 7% to 17%. So those still you know still holds true at.

Rebecca J. Garbrick: That still stays the same from an EPS standpoint of 98 cents to $1.02, and from the revenue side, a decline of 7 to 17 percent. So those still hold true. At the time that we gave the guidance, we weren't far enough along in our sale of Final Mile to the HUB Group, and so we didn't break out at that time our guidance between what we call our discontinued operations, which is really our Final Mile business, and then continuing operations, which is really everything else. And so we just wanted, because we were reporting our results on a discontinued and continuing operation basis, we wanted to break those out so that you could look at them from an apples-to-apples standpoint. When we do our forecast, we do a buildup by each line of business, so we know in our guidance how much is allocated to the Final Mile versus LTL and truckload and intermodal, and so being able to break out that Final Mile is what we did. To your point, we did not come out publicly and specify how much is continuing versus discontinuing, but what we can say is that on the EPS, our discontinued for Final Mile was 20 to 22 cents, their range, and from continuing, it was 78 to 80 cents.

At the time that we gave the guidance we weren't you know far enough along in our sale of final mile. You know to the hub group and so we didn't break out at that time, our guidance between you know what we call as our discontinued off which is really our final mile business and continuing which is really everything else.

And so we just wanted because we are reporting our results from our discontinued and continuing ops basis. You know we wanted to break those out so that you could look at it from an apples to apples standpoint, when we do our forecast we do a build up by each line of business. So we know in our guidance how much is allocated to final mile versus L. T O N E.

Truckload and intermodal and so being able to break out that final mile is what we did do your point, we did not come out publicly and and specify how much is continuing versus discontinuing, but what we can say is that you know on the EPS or discontinued for final mile was was you know 'twenty to 'twenty two sense was there ranging from continuing in it.

The 78 to 80 since range.

Rebecca J. Garbrick: Okay, okay, that is helpful. So it sounds like you are not giving what Omni's EBITDA was in 23, but then again, kind of all. So if you say that you're pro forma 5-2 on call it 1.8 billion of net debt, that's like 350 million of implied EBITDA.

Okay. Okay that is helpful.

So it sounds like Youre not giving what these EBITA was in 'twenty three but then again kind of all so if you if you say that your pro forma at five two.

Call. It $1 8 billion of net debt, that's like 350 million of implied EBITDA.

Patrick Tyler Brown: You say in your press release that you do 200 million of legacy forward on a continuing basis, so that's like 150 left. And if I take out the 75 for cost synergies, I mean, did Omni do like $75 million in 2023? Where's my math correct?

You you say in your press release that you do $200 million of legacy forward on a continuing basis. So that's like 150 left.

And if I take out the 75 from cost synergies I mean did I need you like 75 million and 10 23.

Patrick Tyler Brown: Yeah. No, Tyler, you know, we appreciate the question, and I'm going to circle back around to what I said earlier in terms of, you know, we, the audit for Omni is, you know, still ongoing. It's not closing until March 15th, and, you know, I understand the request and the need for that information, and that's just something we're not ready to provide today, but we plan to do that, you know, soon and in the future here when we do an investor presentation, so that's, unfortunately, going to fall into that category today. What about the billing of preferred? Did they convert?

Where's my math correctly no collar.

We appreciate the question and I'm going to I'm going to circle back around to what I said earlier in terms of you know we are the the audit for for Omni is still ongoing it's not closing until March 15th and you know I understand the request and the need for that information and that's just something we're not ready to provide today.

But we plan to do that you know soon in the future here when we do it in investor presentation. So.

That's that's unfortunate to fall into that category today.

Okay.

What about the 1 billion of preferreds do they convert and if not are those dividends the crewing and what what happens if they don't convert.

Rebecca J. Garbrick: And if not, are those dividends accruing, and what happens if they don't? Yeah, no, that's a good question, Tyler. So the preferreds right now are just that; they're preferred. The dividend that's due on those preferreds is actually not payable until the one-year anniversary after we closed on the transaction. So that would be January of 2025. They don't accrue before that anniversary date.

Yeah, No. That's a good question Tyler so so the preferreds right now are just that their preferred.

Do you have any of that do you want those preferreds is actually not due and payable until the one year anniversary. After we closed on the transaction. So that would be January of 2025, they don't accrue before that anniversary date. So we essentially have one year from today until January 25th of next year.

Rebecca J. Garbrick: So we essentially have one year from today until January 25th of next year in order to get those converted from preferred to common. You can do, you know, there's the ability, if those don't get converted, there is a pick, and then there is, you know, the cash component there. But I think the company, you know, is looking to get those converted before that one-year anniversary so that, you know, we won't have to pay the dividend on those preferreds. Okay, okay. That's helpful. And then, just from a reporting perspective, Rebecca, how do you anticipate reporting going forward? Will there be... You know, expedited, freight, intermodal, and then omni, or are you going to try to fold omni into expedited, or how's that going to work? Yes, it's a good question, Tyler. And certainly, we've been thinking and having those conversations over the last several weeks, you know, with the sale of Final Mile, which was part of our expedited freight, and then also looking at the Omni businesses. Omni does have some similar businesses to Ford. For example, they have their own truckload brokerage.

Order to get those converted from preferred to common you can do you know theres the ability if those don't get converted there is a pick and then there is you know the cash component there, but I think the company is looking to get those converted before that one year anniversary such that you know we won't have to pay the dividend on those preferreds.

Okay. Okay. That's helpful. And then just from a reporting perspective, Rebecca how how do you anticipate reporting going forward will there be.

You know expedited freight intermodal and then omni or are you going to try to fall on the expedited or how how is that going to work.

Yes, it's a good question Tyler and certainly we've been thinking and having those conversations over the last several weeks you know with the sale of final mile. You know that was part of our expedited freight and then also looking at the omni businesses Omni does have some similar businesses to afford as an example, they have their own truckload brokerage, we have ours and so I think where were in the press.

Aside from evaluating what that looks like and what's the best way to report you know together and you know from a segment reporting standpoint. So you know I hate to say that we don't necessarily have that answer today, but we are certainly working on that answer and as we come to our Q1 results at that point, we will have our reportable segments, you know done instead.

Rebecca J. Garbrick: We have ours, and so I think we're in the process of evaluating what that looks like and what's the best way to report, you know, together and, you know, from a segment reporting standpoint. So, you know, I hate to say that we don't necessarily have that answer today, but we are certainly working on it. And as we come to our Q1, you know, results at that point, we will have our reportable segments, you know, done and settled, and be able to report those. Okay, all right; I appreciate the time.

And be able to report those.

Okay, all right I appreciate the time.

Hmm.

Thank you. Our next question comes from Stephanie more with Jefferies. Please go ahead.

Hey, good morning, everybody. This is Joe halfling on for Stephanie appreciate all of the color that you guys have given so far I kind of wanted to drill in a little bit I guess, maybe on the synergies you know as we're thinking about that 75 million synergy number correct me if I'm wrong I believe it's 60 million in the first year and the.

Stephanie Lynn Benjamin Moore: Thank you. Our next question comes from Stephanie Moore with Jeffries. Please go ahead. Great. Good morning, everybody. This is Joe Hafling on behalf of Stephanie.

The remainder being realized over the longer term.

Joseph Lawrence Hafling: I appreciate all of the color that you guys have given so far. I kind of wanted to drill in a little bit, I guess, maybe on the synergies. You know, as we're thinking about that 75 million synergy number, correct me if I'm wrong, I believe it's 60 million in the first year and, you know, the remainder being realized over the longer term. Could you kind of help us get some confidence in terms of, you know, you mentioned folding up some of the Omni line haul? Could you give us, you know, maybe a little bit of anything to give us some confidence on what the cost basis of that is, you know, how many terminals does that include? What's the sort of cost per terminal savings or line haul savings that's kind of, you know, been realized with that? with that roll up so far.

Could you kind of help us get some confidence in terms of you mentioned folding up some of the omni line haul could you give US you know maybe a little bit of anything to you know give me some confidence on what the cost basis of that is you know how many terminals does that include what's the sort of cost per terminal savings or line haul saving just kind of.

You know being realized with that.

That roll up so far.

Yeah, Joe. Thank you for the question I think you know what let me just step back and give you may be you know.

Kind of a broader perspective on integration I think you know, we we probably would think of it in terms of phasing and you know.

Kind of phase one of that really is around you know are delivering sort of a real continuity with our our customer and employee experience, while kind of actioning that pre wired synergies like that a roll up of the Oh network, where.

Michael L. Hance: Yeah, Joe, thank you for the question. I think, you know, let me just step back and give you maybe, you know, kind of a broader perspective on integration. I think, you know, we probably would think of it in terms of phasing, and, you know, the kind of phase one of that really is around, you know, delivering sort of a real continuity with our customer and our employee experience while kind of actioning the pre-wired synergies like that roll-up of the Omnilatal Network. We're not prepared to kind of give you, you know, quantify that today.

We're not prepared to kind of give you a quote to quantify that today as I said in the script earlier when we were talking the.

The opening comments, we are in the process of kind of re validating those and they are looking for new pockets of synergy.

We plan to give you and to provide a report on that in the future, but we don't have that today I will tell you that you know we did see and I think we mentioned this that where you know oh in the first week. After closing we saw a 20% increase as a result of the the the consolidation which was done.

Michael L. Hance: As I said in the script earlier when we were talking, the opening comments, we are in the process of, you know, kind of revalidating those and then looking for new pockets of synergy. And we plan to give you and provide a report on that in the future. But we don't have that today.

You know incredibly well by our our team.

And I would also add that I think even after that we've got adequate capacity in our network for.

Additional business and additional freight.

Michael L. Hance: I will tell you that, you know, we did see, and I think we mentioned this, that in the first week after closing, we saw a 20% increase as a result of the consolidation, which was done incredibly well by our team. And I would also add that, even after that, we've got, you know, adequate capacity in our network for additional business and additional freight. So all of that is good and positive.

So all of that is is a good and positive I'd say in phase two you know, we're really gonna be identifying and capturing.

Additional synergies, while we're kind of getting to the blocking and tackling as a functional integration, which you know you think about being able to close our books together cyber security protocols those kinds of things and then you know.

Lastly, sort of if that was the last phase will be sort of a maturing the combination of the two companies kind of optimizing it. So I know that's very high level and we're going to come back to you like we said in the in the opening with a you know a scorecard to give you some better visibility into it but but we don't have that information to give you today.

Michael L. Hance: I'd say in phase two, you know, we're really going to be identifying and capturing additional synergies while we're kind of getting to the blocking and tackling of functional integration, which is, you know, you think about being able to close our books together, cybersecurity protocols, those kinds of things. And then, you know, lastly, sort of the last phase will be sort of maturing the combination of the two companies, kind of optimizing it. So I know that's a very high level, and we're going to come back to you, like we said in the opening, with, you know, a scorecard to give you some better visibility into it, but we don't have that information to give you today. Okay, maybe quickly just some clarification on that 20% tonnage increase. I mean, that's really just a function of business that was previously running on Omni's line haul that's now moving on your network.

Yeah.

Okay, and then maybe quickly just some clarification on that the 20% tonnage increase I mean, that's really that's just a function of.

Business that was previously running on Omnis lighthall, that's not moving on your network. It's not you know net new business from a consolidated standpoint, it's just now on the four bids and you mentioned the $17 million of I guess it was more on the revenue synergy side from omni customers that.

That need sort of expedited L. T. L business that you can provide what was that a $17 million annualized revenue synergy number or was that sort of a like a profit EBITDA number.

The annualized revenue that.

I think youre right, yeah, Yeah, that's right and on the 20% that is correct that is just them pushing in you know there were they would previously used for a different carrier and their own network. That's just coming through our network. So from a consolidated standpoint, you're right. That's just an inner company, we do get the benefit of that cost synergy and so that's the biggest piece is it take away from there.

Michael L. Hance: It's not, you know, net new business, you know, from a consolidated standpoint; it's just now in the forward business. And you mentioned 17 million of it, I guess it was more on the revenue synergy side from Omni customers that need sort of expedited LTL business that you can provide. Was that a 17 million annualized revenue synergy number? Or was that sort of like a profit EBITDA number? Patrick Brown That's annualized revenue. Those are, I think you're on both of those, yeah. Rebecca Garbrick Yeah, and that's right.

Okay. That's helpful. And then maybe anything you can maybe provide on I know you can't really speak too much color with mist potential divestments, but.

What what are maybe some areas that you what are some characteristics that you would look for in terms of noncore in terms of what's not supporting L. P. L. I'm, just trying to get a sort of an idea of what we should be thinking about.

Yeah, well, let me tackle that one I think you know where we're gonna be very thoughtful about that and you know it's really part of the overall integration work that we're doing and as we go through integration where are you now.

Michael L. Hance: And on the 20%, that is correct. That is just them pushing in, you know, their, what they would previously use for a different carrier on their own network. That's just coming through our network. So from a consolidated standpoint, you're right, that's just an internal company. We do get the benefit of that cost synergy. And so that's the biggest piece as a takeaway from there. Okay, that's helpful. And then maybe anything you can maybe provide on, I know you can't really speak too much color with potential divestments. But what what are maybe some areas that you what are some characteristics that you would look for in terms of non-core in terms of, you know, what's not supporting LTL, just kind of give us an idea of what we should be thinking about.

Obviously now with the other side of the transaction. We have you know us as a combined company new capabilities and so I think our you know part of what we're doing is trying to figure out how we leverage those capabilities most effectively and.

We are developing sort of the criteria as we move along in terms of how to put these things together most effectively to maximize.

Our opportunities, particularly in the <unk> space and so we don't have anything more to share right now in terms of how we're thinking about it other than to tell you that we're moving along you know thoughtfully and carefully and that we're excited about the new capabilities that we have and that you know before we think about divesting we want to make sure that we.

Michael L. Hance: Yeah, let me tackle that one. I think we're going to be very thoughtful about that. And it's really part of the overall integration work that we're doing. And as we go through integration, obviously, now on the other side of the transaction, we have new capabilities. And so I think part of what we're doing is trying to figure out how we leverage those capabilities most effectively.

We maximize those are for the overall combined company strategy.

Okay, perfect and I'm, sorry, I've I've, one more clarification, Rebecca maybe you could help me with could you just.

Quickly provide us with the the updated terms of the credit agreement I believe and correct me if I'm wrong. I believe you you increase the leverage from a short time to seven times I guess could you I guess, a correct me if I'm wrong on that and then maybe what's the timeline of how how long that temporary increase in our leverage ratio under the covenants goes for.

Michael L. Hance: And we are developing criteria as we move along in terms of how to put these things together most effectively to maximize our opportunities, particularly in the LTL space. And so we don't have anything more to share right now in terms of how we're thinking about it, other than to tell you that we're moving along thoughtfully and carefully and that we're excited about the new capabilities that we have, and that before we think about divesting, we want to make sure that we maximize those for the overall combined company strategy. Perfect.

Sure Yeah, and just to clarify on these covenants you know we did take the prudent approach when we thought about negotiating these covenants. We wanted to provide enough headroom for us, especially as we're going through this critical time of integration efforts. We just wanted to make sure that we had that you know availability I guess to continue to focus on the integration effort.

Joseph Lawrence Hafling: And so I have one more clarification, Rebecca, maybe you could help me with. Could you just quickly provide us with the updated term for the credit agreement, I believe, and correct me if I'm wrong? I believe you increased the leverage from a short time to seven times. Could you, I guess, A, correct me if I'm wrong on that?

And also you know still be in compliance with those covenants. So it is a springing covenant. It starts in in Q2 of 24. It starts at six times it stays at six times and for two quarters and then it begins to ratchet itself down such that by the time you get down to the end of 2025, we are at the four and a half.

Rebecca J. Garbrick: And then maybe what's the timeline of, you know, how long that temporary increase in the leverage ratio under the covenant goes for? Sure, yeah, and just, you know, to clarify on these covenants, we did take the prudent approach when we thought about negotiating these covenants; we wanted to provide enough headroom for us, especially as we were going through, you know, this critical time of integration efforts; we just wanted to make sure that we had that, you know, availability, I guess, to continue to focus on the integration efforts and also, you know, still be in compliance with those covenant So it is a springing covenant; it starts in Q2 of 24, it starts at six times, it stays at six times for two quarters, and then it begins to ratchet itself down, such that by the time you get down to the end of 2025, we are at four and a half times, and that has been the maintenance covenant from that point forward.

Times and that has been the maintenance covenant from that point forward. So you know we started high ratcheted down pretty pretty quickly. If you will but that is all in the effort of being able to really kind of you know focus on integration efforts give us that headroom allow us to do the good work that we need to do.

Alright, thanks, so much for all the color I'll pass it along.

Thank you as a reminder, if you would like to ask a question at this time. Please press star one. Our next question comes from Christopher <unk> with the benchmark company.

Good morning, Thanks for taking my question.

So the 5.2 times leverage includes it sounds like does that include the cost synergies that you laid out when when we are when you first announced the acquisition and then you. You said you were revisiting targets. So I know you mentioned in a few questions ago, but what what targets would they be would they be both cost and revenue synergy.

Joseph Lawrence Hafling: So, you know, we started high, and ratcheted it down pretty quickly, if you will, but that is all in the effort of being able to really kind of focus on integration efforts, give us that headroom, and allow us to do the good work that we need to do. Great. Thanks so much for all the color.

Synergy targets.

Yeah, Chris It only includes cost synergies and you are right. It is based on the original cost synergies that we had disclosed so that is correct. It's just that that $75 million that we previously discussed them you know back in August of last year. There's no revenue synergies that are baked in there that would be you know goodness that we would.

Joseph Lawrence Hafling: I'll pass it on. Thank you. As a reminder, if you would like to ask a question at this time, please press star one. Our next question comes from Christopher Kuhn with the Benchmark.

Seen our results that come through from an EBITDA standpoint, but its not an incremental add you know from a covenant standpoint.

Christopher Glen Kuhn: Good morning, thanks for taking my question. So the 5.2 times leverage includes, it sounds like, does that include the cost synergy that you laid out when you first announced the acquisition, and then you said you were revisiting targets. So I know you mentioned it a few questions ago, but what targets would they be? Would they be both cost and revenue? A synergy target.

Okay and then in the release you mentioned the integration of the line haul I mean is that sort of you know can that be done pretty quickly in terms of hitting now it's shorter term 60 million in cost savings that you laid out.

A couple of months ago, when you announced the merger.

Yes, I would I would say, we actually we we've already accomplished that the consolidation of the on the line haul network into the forward network.

Rebecca J. Garbrick: Yeah, Chris, it only includes cost synergies. And you are right. It is based on the original cost synergies that we had disclosed. So that is correct. It's just that $75 million that we previously discussed back in August of last year. There are no revenue synergies that are baked in there.

We're glad to report that that has been completed and realized.

Okay. Just last one I mean, you you mentioned during the call you know that when we changed but what's your confidence in retaining your current.

Michael L. Hance: That would be goodness that we would see in our results that comes through from an EBITDA standpoint. Okay. And then in the release, you mentioned the integration of the line haul. I mean, is that sort of, you know, can that be done pretty quickly in terms of hitting those shorter-term $60 million cost savings that you laid out, you know, back a couple months ago when you announced the merger? Yes, I would say we've actually already accomplished that, the consolidation of the Omni Linehaul Network into the Forward Network. We're glad to report that that has been completed and realized. Okay, just the last one.

Forward customers you know now that now that you.

You know the army as part of your organization, how do you kind of separate the two and continue to grow those dozens great legacy customers that you have.

Yeah, It's a great question and happy to answer that one I think you know we are so first let me just say you know, we we go out and when our customers business every single day, they make choices every day.

And I've had some great conversations with.

Some of our customers over the past few weeks.

And really good conversations as we mentioned you know early on in the call that we've seen really good retention rates post the closing.

And you know what we're going to do is we're going to manage the rules of engagement in our channels really well too.

Michael L. Hance: I mean, you mentioned during the call that we retain customers, but what's your confidence in retaining your current and forward customers, you know, now that they are now part of Omni as part of your organization? How do you kind of separate the two and continue to grow those great legacy customers that you have?

To make sure that we give our legacy customers confidence that we can be that provider that we've always been to them without fear of of.

Any kind of encroachment into their their space.

And necessarily so we're working really hard with them to make sure that we earn their business, where you know Nancy running does a phenomenal job of communicating and we've got open lines of communication with our customers being very transparent with them and we think there's plenty of room in the market for us to continue providing that.

Michael L. Hance: Yeah, that's a great question, and I'm happy to answer that one. I think we are, so first, let me just say we go out and win our customers' business every single day. They make choices every day.

Michael L. Hance: And I've had some great conversations with some of our customers over the past few weeks, and really good conversations. As we mentioned early on in the call, we've seen really good retention rates post-closing. And what we're going to do is we're going to manage the rules of engagement in our channels really well to make sure that we give our legacy customers confidence that we can be the provider that we've always been to them without fear of any kind of encroachment into their space unnecessarily. So we're working really hard with them to make sure that we earn their business.

Service, we provided to them for years, while still growing our business and other channels and so that's really how we're thinking about it.

Okay, great. Thanks for the time appreciate it.

Thank you.

Thank you. Our next question comes from Bruce Chan with Stifel. Please go ahead.

Hey, Good morning. This is Matt My last one for Bruce Thanks for taking our questions with respect to ice hey, Thanks with respect to omni as performance in the quarter.

With the understanding that Theres limited disclosure available at this point could you maybe just provide some directional commentary really weather results were better or worse sequentially than what has been previously reported in that business.

Michael L. Hance: We're, you know, Nancy running does a phenomenal job of communicating, and we've got, you know, open lines of communication with our customers, being very transparent with them. And we think there's plenty of room in the market for us to continue providing the great service we've provided to them for years while still growing our business and other channels. And so that's really how we're thinking about it. Okay, great. Thanks for your time. Thank you. Our next question comes from Bruce Chan with Stiefel. Please go ahead. Team, good morning. This is Matt Myer-Lascon speaking for Bruce.

Yeah, I think you know I hate to you know I hate to kind of say you know again, we just at this point you know, we we look forward to having the analyst you know day in the email presentation to provide you more information at that time, you know as they finalize the results for the quarter, we hate to give information that you know may in fact.

Change and as you all know on either a private company. So they're not under the same standards that we are as a public entity and so they just complete their audit and in due course, so we look forward to having that discussion a little bit later and we can provide that information at that time when their audit is complete.

Jizong Chan: Thanks for taking our question. With respect to Omnia's performance in the quarter, you know, with the understanding that there's limited disclosure available at this point, could you maybe just provide some directional commentary, really whether results were better or worse sequentially than what's been previously reported in that business? Yeah, I mean, I hate to, you know, I hate to kind of say it, you know, again, we just, at this point, we look forward to having the analyst day and the analyst presentation to provide you with more information at that time. You know, as they finalize the results for the quarter, we hate to give information that, you know, may in fact, change. And, as you well know, Omni is a private company, so they're not under the same standards that we are as a public entity, and so they will just complete their audit in due course.

Okay, Great and piggybacking off the last question could you maybe shed any more color on why it was ultimately necessary to amend the credit agreement. So soon after the deal closed and really how the new target of six times was.

Ultimately selected.

Yeah, no yeah happy to give you that information. So you know at the time that we had set this covenants, which was really you know back in August of last year. You know there were different you know different information was received at that time and there are different in a slightly different market conditions and so you know as we took a look at.

You know where does the combined company think they will be you know in the early part of this year as we were looking you know kind of going through the closing process and you know we identified to that you know we needed to reevaluate and give ourselves. The headroom just knowing that we had the integrations you know efforts kind of underway and knowing that there might be you know some time.

Rebecca J. Garbrick: So, we look forward to having that discussion a little bit later, and we can provide that information at that time once their audit is complete. Okay, great. And piggybacking off the last question, could you maybe shed any more light on why it was ultimately necessary to amend the credit agreement so soon after the deal closed and really how the new target of six times was ultimately selected? Yeah, no, yes; happy to give you that information. So, you know, at the time that we had set these covenants, which was really, you know, back in August of last year, there were different, you know, different information was received at that time. And there were different, you know, slightly different market conditions.

We need to be able to have that so it was really more of a prudent approach you know in our standpoint to be able to get that covenant up to the six times. We just wanted to make sure that we had that ability to focus on where there's the value creation, which is really a need you know integration efforts and synergy capture so just more of a prudent approach I would say in.

You know really some new information that came to light from the time that we negotiated this back in August of last year, you know until earlier this year.

Rebecca J. Garbrick: And so, you know, as we took a look at where the combined company thinks they will be in the early part of this year, as we were looking, you know, kind of going through the closing process. And, you know, we identified that, you know, we needed to reevaluate and give ourselves some headroom, just knowing that we had the integrations, you know, efforts kind of underway and knowing that there might be, you know, some time that we need to be able to have that. So, it was really more of a prudent approach, you know, from our standpoint to be able to get that covenant up to six times.

Thank you.

Thank you that will conclude our question and answer session I will now turn the call back to Michael Hance for any additional or closing remarks.

Thank you so much we want to say, we appreciate everyone who's been on the call today and appreciate the questions that were asked.

Is Rebecca and I shared we look forward to providing updates on information that is requested and desired and we plan to do that we are as we said earlier committed to transparency and we appreciate your patience as we.

Rebecca J. Garbrick: We just wanted to make sure that we had that ability to focus on where there's the value creation, which is really in these integration efforts and synergy capture. So, just more of a prudent approach, I would say, and, you know, really some new information that came to light from the time that we negotiated this back in August of last year until earlier this year. Thank you. Thank you. That will conclude our question and answer session. I will now turn the call back to Michael Hance for any additional or closing remarks. Thank you so much.

Move forward and the last thing I want to say, it's just too I noticed that today listening on the call. There are a number of our forward teammates and just want to say thank you to them for the good work that they're doing you know today and every day.

As I said earlier, we are we've been delighted to learn that we share a common DNA around taking exceptional care of our customers and providing a high level of service and the people who do that day in day out are the folks.

In the field doing doing the work and so I.

Michael L. Hance: We want to say we appreciate everyone who was on the call today and appreciate the questions that were asked. And, as Rebecca and I shared, we look forward to providing updates on information that's requested and desired, and we plan to do that. We are, as we said earlier, committed to transparency, and we appreciate your patience as we move forward. And the last thing I want to say is just to – I know that today, listening on the call, there are a number of our forward teammates, and I just want to say thank you to them for the good work that they're doing today and every day. As I said earlier, we've been delighted to learn that we share a common DNA around taking exceptional care of our customers and providing a high level of service, and the people who do that day in and day out are the folks in the field doing the work.

I'd be remiss without saying thank you today.

As we close because that can be the foundation for our success going forward and with that I think I think that's it. Thank you.

This concludes forward Air's fourth quarter and full year 2023 earnings conference call. Please disconnect. Your line at this time and have a wonderful day.

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Michael L. Hance: And so I'd be remiss without saying thank you today as we close, because that can be the foundation for our success going forward. And with that, I think that's it. Thank you. This concludes Forward Air's fourth quarter and full year 2023 earnings conference call. Please disconnect your line at this time and have a wonderful day.

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