FORWARD AIR CORP

Results from Operations

The following table sets forth our consolidated financial data for the three months ended March 31, 2026 and 2025 (unaudited and in thousands):

Operating revenues decreased $31,235, or 5.1%, to $582,046 for the three months ended March 31, 2026 compared to $613,281 for the three months ended March 31, 2025. The decrease was primarily associated with the Omni Logistics' ground operations and Intermodal revenue. The results for our reportable segments are discussed in detail in the following sections.

Operating Expenses

Operating expenses decreased $46,913, or 7.7%, to $561,605 for the three months ended March 31, 2026 compared to $608,518 for the three months ended March 31, 2025. The decrease was primarily due to lower salaries, wages and employee benefits and purchased transportation as a result of decreased revenue.

Income from Operations

Income from operations increased $15,678, or 329.2%, to income of $20,441 for the three months ended March 31, 2026 compared to income of $4,763 for the three months ended March 31, 2025. The increase was primarily due to effective management of operating expenses in the current freight business environment and an $11,112 reduction in transaction and acquisition costs.

Total Other Expense

Total other expense increased $12,481, or 26.9%, to expense of $58,846 for the three months ended March 31, 2026 compared to an expense of $46,365 for the three months ended March 31, 2025. The increase was primarily due to a $16,707 adjustment to increase liabilities under the Tax Receivable Agreement.

Income Taxes

The effective tax rate for the three months ended March 31, 2026 was (4.7)% compared to (47.1)% for the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 and 2025 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of interest expense disallowances under IRC Section 163(j) for which a full valuation allowance was recorded on the deferred tax asset, noncontrolling interest, and foreign, state and local income taxes.

Net Loss

As a result of the foregoing factors, net loss improved by $20,993, to $40,198 for the three months ended March 31, 2026 compared to $61,191 net loss for the three months ended March 31, 2025.

Expedited Freight - Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025

The following table sets forth the financial data of our Expedited Freight segment for the three months ended March 31, 2026 and 2025 (unaudited and in thousands):

Operating revenues increased $23,326, or 9.4%, to $272,707 for the three months ended March 31, 2026 from $249,381 for the three months ended March 31, 2025. The increase was primarily due to increased Truckload revenue that resulted from a $19,976 increase in intersegment revenues with Omni Logistics' ground operations and $7,242 in operating revenues from the conversion of certain customers previously serviced by Omni Logistics in the prior year period. Network revenue decreased due to a 2.0% decrease in pounds per day, partially offset by a 0.8% increase in revenue per hundred weight as compared to the same period in 2025. The decrease in tonnage reflects fewer shipments per day of 4.3% that is partially offset by an increase in weight per shipment of 3.2%. The decrease in shipments is due to softer demand for our services.

Purchased transportation increased $21,003, or 17.4%, to $141,683 for the three months ended March 31, 2026 from $120,680 for the three months ended March 31, 2025. Purchased transportation was 52.0% of Expedited Freight operating revenues for the three months ended March 31, 2026 compared to 48.4% for the same period in 2025. Expedited Freight purchased transportation includes Leased Capacity Providers and third-party motor carriers and transportation intermediaries, while Company-employed drivers are included in salaries, wages and employee benefits. Purchased transportation primarily increased in correlation with the increase in intersegment revenues with Omni's ground operations and the conversion of certain customers previously serviced by Omni Logistics in the prior year period.

Salaries, wages and employee benefits increased $3,073, or 5.8%, to $55,650 for the three months ended March 31, 2026 from $52,577 for the three months ended March 31, 2025. Salaries, wages and employee benefits were 20.4% of Expedited Freight operating revenues for the three months ended March 31, 2026 compared to 21.1% for the same period in 2025. The increase in salaries, wages and employee benefits expense was primarily due to the intersegmental shift of personnel for supporting the Truckload operations.

Omni Logistics - Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025

The following table sets forth the financial data of our Omni Logistics segment for the three months ended March 31, 2026 and 2025 (unaudited and in thousands):

Operating revenues decreased $21,052, or 6.5%, to $302,418 for the three months ended March 31, 2026 from $323,470 for the same period in 2025. This was due to decreased ground, air and ocean services, which was partially offset by the increase in contract logistics. Ground and air and ocean services have decreased due to softer demand from the segment's customers.

Purchased transportation decreased $16,811, or 9.1%, to $168,923 for the three months ended March 31, 2026 from $185,734 for the three months ended March 31, 2025. Purchased transportation was 55.9% of operating revenues for the three months ended March 31, 2026 compared to 57.4% for the same period in 2025. The decrease was primarily driven by a reduction in operating revenue and a favorable shift in product mix. This shift included an increase in contract logistics, which generally require lower levels of purchase transportation compared to ground, air, and ocean services.

Salaries, wages and employee benefits decreased $3,387 or 6.0%, to $53,396 for the three months ended March 31, 2026 from $56,783 for the three months ended March 31, 2025. Salaries, wages and employee benefits were 17.7% of operating revenues for the three months ended March 31, 2026 compared to 17.6% for the same period in 2025. Salaries, wages and employee benefits primarily decreased due to the lower operating revenues during the current year period.

Intermodal - Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025

The following table sets forth the financial data of our Intermodal segment for the three months ended March 31, 2026 and 2025 (unaudited and in thousands):

Operating revenues decreased $9,400, or 15.0%, to $53,092 for the three months ended March 31, 2026 from $62,492 for the three months ended March 31, 2025. This decline was driven by a 8.8% reduction in drayage shipments and a 0.8% decrease in drayage revenue per shipment. The lower shipment volumes resulted from our customer base being negatively affected by international trade restrictions, which led to reduced activity at seaports and railheads. Operating revenues also decreased due to loss of non-drayage revenue that represented $3,900 of operating revenues in the prior year period.

Purchased transportation decreased $834, or 4.1%, to $19,342 for the three months ended March 31, 2026 from $20,176 for the three months ended March 31, 2025. Purchased transportation was 36.4% of Intermodal operating revenues for the three months ended March 31, 2026 compared to 32.3% for the same period in 2025. Purchased transportation includes Leased Capacity Providers and third-party motor carriers, while Company-employed drivers are included in salaries, wages and employee benefits. Purchased transportation as a percentage of operating revenues has increased based on several factors including changes in mix of drayage and non-drayage revenues, length of haul, lane density, and mix of service providers.

Salaries, wages and employee benefits decreased $2,268 or 14.2%, to $13,663 for the three months ended March 31, 2026 from $15,931 for the three months ended March 31, 2025. Salaries, wages and employee benefits were 25.7% of operating revenues for the three months ended March 31, 2026 compared to 25.5% for the same period in 2025. Salaries, wages and employee benefits decreased primarily due to the decrease in operating revenues during the current year period.

Other Operating Expenses

Other operating expenses decreased $1,611, or 29.8%, to $3,788 for the three months ended March 31, 2026 from $5,399 for the three months ended March 31, 2025. Other operating expenses were 7.2% of Intermodal operating revenues for the three months ended March 31, 2026 compared to 8.6% for the same period in 2025. The decrease in other operating expenses as a percentage of revenue was primarily driven by reduction in revenue.

Corporate - Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025

Corporate included $1,559 in operating loss during the three months ended March 31, 2026 compared to $19,788 of operating loss during the three months ended March 31, 2025. The change in operating loss was driven by $2,814 of professional fees incurred in 2026 for transaction and integration costs as compared to $13,926 in 2025 and a $5,606 decrease associated with health self-insurance costs.

Liquidity and Capital Resources

We have historically financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under our $300,000 revolving credit facility (the “Revolving Credit Facility”) pursuant to our credit agreement with Citibank, N.A., as administrative agent and collateral agent and as initial term loan lender (the “Credit Agreement”). We believe that availability of borrowings under our Credit Agreement together with available cash and internally generated funds will be sufficient to support our working capital, capital expenditures and debt service requirements over the next twelve months.

The Credit Agreement requires the Company to maintain a leverage ratio (as defined in the Credit Agreement), which is tested quarterly and currently must not be greater than 6.25 to 1.00. As of March 31, 2026, the Company’s leverage ratio was 5.44 to 1.00. The required leverage ratio will decrease by 25 basis points at the end of each quarter in 2026 to 5.50 to 1 at the end of December 31, 2026 and all quarters thereafter, as defined in the agreement. Failure to comply with this covenant would result in an event of default under the Credit Agreement and, absent a waiver from the lenders or an amendment to the Credit Agreement, preclude the Company from making further borrowings under the Revolving Credit portion of the Credit Agreement and permit the lenders to accelerate all outstanding borrowings under the Credit Agreement, including the term loan portion. Based on current expectations, the Company expects to maintain compliance with the leverage ratio during the next year.

Cash Flows

Net cash provided by operating activities was $45,738 for the three months ended March 31, 2026 compared to $27,615 for the three months ended March 31, 2025. The increase in net cash provided by operating activities was primarily due to the increase in income from operations.

Net cash used in investing activities was $5,518 for the three months ended March 31, 2026 compared to $11,239 for the three months ended March 31, 2025. Capital expenditures for the first three months of 2026 and 2025 were $6,946 and $11,906, which primarily related to the purchase of technology and operating equipment.

Forward-Looking Statements

This report contains “forward-looking statements,” as defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or our future financial performance. Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.”

In this Form 10-Q, forward-looking statements include, but are not limited to, any statements regarding: (i) any projections of earnings, revenues, other financial items or related accounting treatment, or cost reduction measures, including any impact of the Omni Acquisition on our financial statements; (ii) future performance, including any expectations about our ability to increase shipments; (iii) our ability to maintain compliance with the covenants of our indebtedness instruments; (iv) our yield management process, any improvements in operating efficiencies and our ability to create synergies across our services; (v) changes in fuel prices and volatility in fuel surcharge revenue, and their impact on our results of operations; (vi) consumer demand and inventory levels, and the impact on freight volumes; (vii) future insurance, claims and litigation and any associated estimates or projections; (viii) our ability to accelerate the expansion of the Company’s terminal footprint; (ix)

certain tax and accounting matters, including the impact on our financial statements and our ability to realize remaining net deferred tax assets; (x) the expected impact on our business of government regulation and laws and changes thereto; (xi) our ability to use key performance metrics and key operating statistics to gauge progress and make forecasts; (xii) future business, economic conditions and industry projections; (xiii) competition, including our specific advantages, the capabilities of our segments, including the integration of services and our geographic location; (xiv) expectations regarding plans, strategies, and objectives of management for future operations and the potential sale of non-core assets; (xv) our beliefs regarding the effect on our condensed consolidated financial statements resulting from the resolution of claims and pending litigation; (xvi) our beliefs regarding our ability to support our working capital, capital expenditures and debt service requirements over the next twelve months; (xvii) our beliefs regarding the effectiveness of our internal control over financial reporting; (xviii) our beliefs regarding the ongoing review of strategic alternatives; and (xix) any belief and any statements of assumptions underlying any of the foregoing.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as tariffs, including potential escalation from trading partners and their risk on third-party shipments, and the extent to which these factors may affect our operations and strategic plan, the timing of our review of strategic alternatives and whether we will be able to develop, execute on and achieve the potential benefits of any strategic alternative we identify, recessions, inflation, higher interest rates and downturns in customer business cycles, the outcome and related impact of the Omni Acquisition, continued weakening of the freight environment, future debt and financing levels, the outcome of any legal proceedings related to the Omni Acquisition, our substantial indebtedness and our ability to comply with debt covenants, our ability to manage our growth and ability to grow, in part, through acquisitions while being able to successfully integrate such acquisitions, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party motor carriers needed to serve our customers’ transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, changes in fuel prices, loss of a major customer, increasing competition and pricing pressure, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and by‑laws, the cost of new equipment, the impact and efficacy of our disclosure controls and procedures, and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2025. As a result of the foregoing, no assurance can be given as to future financial condition, cash flows or results of operations. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.