FORWARD AIR CORP

Previous wording

This Quarterly Report on Form 10-Q (our “Quarterly 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,” “expects.” or the negative thereof. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. 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. Factors that might cause or contribute to a material difference include those risks discussed under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Annual Report”), as well updates to the risks included in Part II, Item 1A. “Risk Factors” in this Quarterly Report and our other filings with the Securities and Exchange Commission. All forward looking statements set forth in this Quarterly Report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. Forward-looking statements set forth in this Quarterly Report speak only as of the date hereof, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Current wording

This Quarterly Report on Form 10-Q (our “Quarterly Report”) contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) including with respect to the retention or transition of a portion of the Customer’s contract logistics business to other suppliers, the terms of any definitive agreement with the Customer; the Board’s pursuit of potential transactions involving non-core assets, and the expected benefits of any such transactions; projections of earnings, revenues, other financial items or related accounting treatment, including the impact of the goodwill impairment; our ability to maintain compliance with the covenants of our indebtedness instruments and our beliefs regarding our ability to support our working capital, capital expenditures and debt service requirements over the next twelve months; future insurance, claims and litigation and any associated estimates or projections; amounts payable under the Tax Receivable Agreement; changes in fuel prices and their impact on our results of operations; future business, economic conditions and industry projections, including freight volumes, carrier capacity and the effects of tariffs and global disruptions; and any belief and any statements of assumptions underlying any of the foregoing. 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,” “expects.” or the negative thereof. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. 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. Factors that might cause or contribute to a material difference include the outcome of our negotiations with the Customer and the portion of the Customer’s business that is ultimately transitioned to other suppliers; whether any transaction involving our non-core assets is approved or consummated and the proceeds and other terms of any such transaction; economic factors such as tariffs, recessions, inflation, higher interest rates and downturns in customer business cycles; continued weakening of the freight environment and the availability of carrier capaci…

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Previous wording

Our Expedited Freight segment provides expedited regional, inter-regional and national Less-Than-Truckload (“LTL”) services. Expedited Freight also offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.

Current wording

Our Expedited Freight segment provides expedited regional, inter-regional and national Less-Than-Truckload (“LTL”) services in the United States. Expedited Freight also offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.

Previous wording

Our Omni Logistics segment provides a full suite of global logistics services. Services include air and ocean freight consolidation and forwarding, customs brokerage, time-definite transportation services, contract logistics, which includes warehousing and value-added services, as well as other supply chain solutions.

Current wording

Our Omni Logistics segment provides a full suite of global logistics services. Services include domestic freight forwarding and time-definite transportation services, air and ocean freight consolidation, customs brokerage, contract logistics, which includes warehousing and value-added services, as well as other supply chain solutions.

Previous wording

Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads. Intermodal also offers dedicated contract and Container Freight Station (“CFS”) warehouse and handling services, and in select locations, linehaul and LTL services.

Current wording

Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads in the United States. Intermodal also offers dedicated contract and Container Freight Station (“CFS”) warehouse and handling services, and in select locations, linehaul and LTL services.

Previous wording

Our operations, particularly our network of hubs and terminals, involve substantial fixed costs. Accordingly, our ability to improve earnings depends in significant part on our ability to increase freight volumes and enhance revenue per pound or per shipment for freight shipped or moved through our network. In addition, our earnings are affected by the growth of other services, such as LTL pickup and delivery, which support revenue growth in a challenging freight environment. We continue to focus on creating synergies across our service offerings, particularly those within our Expedited Freight reportable segment. These synergies include the ability to share resources, especially our fleet.

Current wording

Our operations, particularly our network of hubs and terminals, involve substantial fixed costs. Accordingly, our ability to improve earnings depends in significant part on our ability to increase freight volumes and enhance revenue per pound or per shipment for freight shipped or moved through our network. In addition, our earnings are affected by the growth of other services, such as LTL pickup and delivery. We continue to focus on creating synergies across our service offerings, particularly those within our Expedited Freight reportable segment. These synergies include the ability to share resources, especially our fleet.

Previous wording

With respect to our Expedited Freight and Intermodal reportable segments, in addition to monitoring our financial results, we monitor and analyze a number of key operating statistics in order to manage these segments and evaluate their operating performance. These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight and Intermodal reportable segments. Our key operating statistics should not be interpreted as better measurements of our results than operating income as determined under GAAP. As we continue to integrate the legacy Omni business, we measure and manage the performance of the Omni Logistics segment based on its revenue and income. We have not identified, nor do we utilize, any key operating statistics to manage this segment and evaluate the operations of our Omni Logistics reportable segment.

Current wording

With respect to our Expedited Freight and Intermodal reportable segments, in addition to monitoring our financial results, we monitor and analyze a number of key operating statistics in order to manage these segments and evaluate their operating performance. These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight and Intermodal reportable segments. Our key operating statistics should not be interpreted as better measurements of our results than operating income as determined under GAAP. We continue to measure and manage the performance of the Omni Logistics segment based on its revenue and income. We have not identified, nor do we utilize, any key operating statistics to manage this segment or to evaluate the operations of our Omni Logistics reportable segment.

Previous wording

Within our Expedited Freight reportable segment, our primary revenue focus is to optimize density, which is to obtain appropriate pricing of our services that allows for profitable shipments and tonnage growth within our existing LTL network. Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations, including linehaul load factor and door pounds handled per hour. In addition to our focus on density and operating efficiencies, it is critical for us to obtain an appropriate yield, which is measured as revenue per hundredweight, on the shipments we handle to offset our cost inflation and support our ongoing investments in capacity and technology. Revenue per hundredweight is also a commonly used indicator for general pricing trends in the LTL industry and can be influenced by many other factors, such as changes in fuel surcharges, weight per shipment and length of haul. Therefore, changes in revenue per hundredweight may not necessarily indicate actual changes in underlying base rates. We regularly monitor the components of our pricing, including base freight rates, accessorial charges and fuel surcharges. The fuel surcharge is generally designed to offset fluctuations in the cost of the petroleum-based products used in our operations by passing changes in such costs on to customers and is indexed to diesel fuel prices published by the U.S. Department of Energy on a weekly basis. The impact of fuel on our results of operations depends on the relationship between the applicable surcharge, the fuel efficiency of our Company drivers, and the load factor achieved by our operation. Fluctuations in fuel prices in either direction could have a positive or negative impact on our margins, particularly in our LTL business where the weight of a shipment subject to the fuel surcharge on a given trailer can vary materially. We believe our yield management process focused on account level profitability, combined with ongoing improvements in operating efficiencies, are key components of our ability to achieve profitable growth.

Current wording

Within our Expedited Freight reportable segment, our primary revenue focus is to optimize density, which is to obtain appropriate pricing of our services that allows for profitable shipments and tonnage growth within our existing LTL network. Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations, including linehaul load factor and door pounds handled per hour. In addition to our focus on density and operating efficiencies, it is critical for us to obtain an appropriate yield, which is measured as revenue per hundredweight, on the shipments we handle to offset our cost inflation and support our ongoing investments in capacity and technology. Revenue per hundredweight is also a commonly used indicator for general pricing trends in the LTL industry and can be influenced by many other factors, such as changes in fuel surcharges, weight per shipment and length of haul. Therefore, changes in revenue per hundredweight may not necessarily indicate actual changes in underlying base rates. We regularly monitor the components of our pricing, including base freight rates, accessorial charges and fuel surcharges. The fuel surcharge is generally designed to offset fluctuations in the cost of the petroleum-based products used in our operations by passing changes in such costs on to customers and is indexed to diesel fuel prices published by the U.S. Department of Energy on a weekly basis. The impact of fuel on our results of operations depends on the relationship between the applicable surcharge, the fuel efficiency of our Company drivers, and the load factor achieved by our operations. Fluctuations in fuel prices in either direction could have a positive or negative impact on our margins, particularly in our LTL business where the weight of a shipment subject to the fuel surcharge on a given trailer can vary materially. We believe our yield management process focused on account level profitability, combined with ongoing improvements in operating efficiencies, are key components of our ability to achieve profitable growth.

Previous wording

Like other providers of freight transportation services, our business has been impacted by the macroeconomic conditions of the past few years. Industry freight volumes, as measured by the Cass Freight Index, decreased in the first half of 2026 compared to the comparable period in 2025. Recent global disruptions, such as conflicts in the Middle East, have had an impact on freight demand, which has led to an overall continued decrease in total number of shipments. Such disruptions may continue with a resolution timeline remaining unclear. Intermodal volumes, heavily influenced by United States imports, have decreased due to a number of factors that impact import levels.

Current wording

Like other providers of freight transportation services, our business has been impacted by the macroeconomic conditions of the past few years. Industry freight volumes, as measured by the Cass Freight Index, decreased in the first nine months of 2026 compared to the comparable period in 2025. Recent global disruptions, such as conflicts in the Middle East, have had an impact on freight demand, which has led to an overall continued decrease in the total number of shipments. Such disruptions may continue with a resolution timeline remaining unclear. Intermodal volumes, heavily influenced by United States imports, have decreased due to a number of factors that impact import levels. However, capacity constraints among carriers have increased throughout the past several months primarily due to drivers exiting the industry, as well as other factors, which contributed to incremental shipment volume growth within our network. Additionally, diesel fuel prices increased significantly during the third quarter of 2026, resulting in higher fuel surcharge revenue and increased the cost of purchased transportation.

Previous wording

In January 2025, the Board of Directors (the “Board”) announced that it had initiated a comprehensive review of strategic alternatives to maximize shareholder value and retained Goldman Sachs & Co. LLC to serve as its financial advisor. This process included extensive negotiations and discussions with multiple parties; however, due to a variety of factors, no actionable proposals for a sale of the Company were ultimately received.

Current wording

In January 2025, the Board of Directors (the “Board”) announced that it had initiated a comprehensive review of strategic alternatives to maximize shareholder value and retained Goldman Sachs & Co. LLC to serve as its financial advisor. This process included extensive negotiations and discussions with multiple parties; however, due to a variety of factors, no actionable proposals for the sale of the Company were ultimately received.

Previous wording

During the first quarter of 2026, we commenced preliminary discussions with our largest customer (the “Customer”) regarding a potential transition of a portion of the Customer's contract logistics business to other suppliers for reasons related to the Customer's operations and supplier diversification initiatives. During the second quarter of 2026, these discussions progressed, and we engaged in more advanced negotiations. We have provided the highest level of service excellence and exceeded all of our KPIs on a regular basis throughout the duration of our 25-year relationship with the Customer. The Customer continued growing their relationship with us over the past two years. Their revenue represented slightly less than 10% of our consolidated operating revenue for the year ended December 31, 2025, and approximately 12% of consolidated operating revenues for both the three and six months ended June 30, 2026. The Customer is concentrated in the Omni Logistics segment.

Current wording

During the first quarter of 2026, we commenced preliminary discussions with our largest customer (the “Customer”) regarding a potential transition of a portion of the Customer's contract logistics business to other suppliers for reasons related to the Customer's operations and supplier diversification initiatives. During the second quarter of 2026, these discussions progressed, and we engaged in more advanced negotiations. We have provided the highest level of service excellence and exceeded all of our KPIs on a regular basis throughout the duration of our 25-year relationship with the Customer. The Customer continued growing their relationship with us over the past two years. The Customer’s revenue represented slightly less than 10% of our consolidated operating revenues for the year ended December 31, 2025, and approximately 13% of consolidated operating revenues for both the three and nine months ended September 30, 2026. The Customer’s business is concentrated in the Omni Logistics segment.

Previous wording

We remain focused on delivering industry leading solutions and service to all of our global customer base and believe that continued execution of our strategy will allow us to regain market share over time.

Current wording

We remain focused on delivering industry leading solutions and services to all of our global customer base and believe that continued execution of our strategy will allow us to regain market share over time.

Previous wording

Operating revenues increased $54.2 million, or 8.8%, to $673.0 million for the three months ended June 30, 2026 compared to $618.8 million for the three months ended June 30, 2025. The increase was primarily associated with an increase in tonnage shipped and revenue per hundredweight in our Expedited Freight segment. The results for our reportable segments are discussed in detail below.

Current wording

Operating revenues increased $42.1 million, or 6.7%, to $673.9 million for the three months ended September 30, 2026 compared to $631.8 million for the three months ended September 30, 2025. The increase was primarily associated with an increase in tonnage shipped and revenue per shipment in our Expedited Freight segment. The results for our reportable segments are discussed in detail below.

Previous wording

Total other expense decreased $13.9 million, or 24.6%, to expense of $42.7 million for the three months ended June 30, 2026 compared to an expense of $56.6 million for the three months ended June 30, 2025. The decrease in total other expense was primarily due to a $1.2 million adjustment to decrease liabilities under the Tax Receivable Agreement in the three months ended June 30, 2026 compared to a $6.9 million adjustment to increase liabilities under the Tax Receivable Agreement in the prior period. Additionally, foreign currency exchange decreased by $4.1 million. These decreases were partially offset by a gain of $3.6 million on the sale of a business unit within our Omni Logistics segment during the three months ended June 30, 2026.

Current wording

Total other expense decreased $3.6 million, or 9.4%, to expense of $34.8 million for the three months ended September 30, 2026 compared to an expense of $38.4 million for the three months ended September 30, 2025. Total other expense for the three months ended September 30, 2026 included a gain of $7.0 million on the sale of a business unit within our Omni Logistics segment. The three months ended September 30, 2025 included a $6.0 million adjustment to decrease liabilities under the Tax Receivable Agreement with no comparable transaction during the three months ended September 30, 2026. Additionally, foreign currency exchange increased by $0.8 million.

Previous wording

The effective tax rate for the three months ended June 30, 2026 was 0.1% compared to 55.4% for the three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 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. Additionally, the effective tax rate for the three months ended June 30, 2026 varied from the statutory United States federal income tax rate of 21.0% due to the tax effects of the goodwill impairment and related change in the valuation allowance.

Current wording

The effective tax rate for the three months ended September 30, 2026 was 0.2% compared to (1.6)% for the three months ended September 30, 2025. The effective tax rate for the three months ended September 30, 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.

Previous wording

The Company is organized as an umbrella partnership C Corporation. Net losses are allocated to noncontrolling interest holders based on the percentage ownership in Clue Opco LLC (“Opco”) of the Class B shareholders. Approximately 15.7% of consolidated net losses were attributed to noncontrolling interest for the three months ended June 30, 2026 compared to 38.2% for the three months ended June 30, 2025. The decrease in the percentage is due to exchanges of Class B shares to common stock from June 30, 2025 through June 30, 2026 and net losses for Forward Air Corporation, which are not allocated to noncontrolling interest and consist primarily of changes in the value of the Tax Receivable Agreement and the impact of income tax expense.

Current wording

The Company is organized as an umbrella partnership C Corporation. Net income (loss) is allocated to noncontrolling interest holders based on the percentage ownership in Clue Opco LLC (“Opco”) of the Class B shareholders. Approximately 24.8% of consolidated net income was attributed to noncontrolling interest for the three months ended September 30, 2026 compared to 31.6% for the three months ended September 30, 2025. The decrease in the percentage is due to exchanges of Class B shares to common stock from September 30, 2025 through September 30, 2026 and net income (loss) for Forward Air Corporation, which is not allocated to noncontrolling interest and consists primarily of changes in the value of the Tax Receivable Agreement and the impact of income tax expense.

Previous wording

Operating revenues increased $61.4 million, or 23.8%, to $319.1 million for the three months ended June 30, 2026 from $257.7 million for the three months ended June 30, 2025. The increase was primarily due to increased Network revenues reflecting a 6.7% increase in tonnage and a 9.3% increase in revenue per hundredweight as compared to the same period in 2025. The increase in tonnage reflects an increase in shipments per day of 1.7% and an increase in weight per shipment of 5.3%. The increase in shipments is due to stronger demand for our services as industry capacity tightens. The increase in Truckload revenues resulted from an increase of $17.2 million in intersegment revenues with Omni Logistics' Ground operations and $9.5 million in operating revenues from the conversion of certain customers previously serviced by Omni Logistics in the prior year period.

Current wording

Operating revenues increased $78.9 million, or 30.5%, to $337.4 million for the three months ended September 30, 2026 from $258.6 million for the three months ended September 30, 2025. The increase was primarily due to increased Network revenues reflecting a 15.6% increase in tonnage and a 15.4% increase in revenue per shipment as compared to the same period in 2025. The increase in tonnage reflects an increase in shipments per day of 7.9% and an increase in weight per shipment of 6.9%. The increase in shipments is due to stronger demand for our services as industry capacity tightens. The increase in Truckload revenues was primarily due to higher prices per shipment, driven by an increase in contracted and spot rates. Truckload revenues also increased in part from $8.4 million in operating revenues from the conversion of certain customers previously serviced by Omni Logistics in the prior year period.

Previous wording

Purchased transportation increased $43.5 million, or 34.9%, to $167.9 million for the three months ended June 30, 2026 from $124.4 million for the three months ended June 30, 2025. Purchased transportation was 52.6% of operating revenues for the three months ended June 30, 2026 compared to 48.3% for the same period in 2025. 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 increased in correlation with the increase in revenues period over period, and the mix of revenue between Network and Truckload where Truckload requires additional amounts of purchased transportation.

Current wording

Purchased transportation increased $54.2 million, or 43.3%, to $179.5 million for the three months ended September 30, 2026 from $125.3 million for the three months ended September 30, 2025. Purchased transportation was 53.2% of operating revenues for the three months ended September 30, 2026 compared to 48.4% for the same period in 2025. 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 increased in correlation with the increase in revenues period over period, and the mix of revenue between Network and Truckload where Truckload requires additional amounts of purchased transportation.

Previous wording

Salaries, wages and employee benefits increased $3.6 million, or 6.7%, to $57.6 million for the three months ended June 30, 2026 from $53.9 million for the three months ended June 30, 2025. Salaries, wages and employee benefits were 18.0% of operating revenues for the three months ended June 30, 2026 compared to 20.9% for the same period in 2025. The increase in salaries, wages and employee benefits expense was primarily due to the 6.7% increase in tonnage moved period over period.

Current wording

Salaries, wages and employee benefits increased $2.0 million, or 3.6%, to $56.4 million for the three months ended September 30, 2026 from $54.4 million for the three months ended September 30, 2025. Salaries, wages and employee benefits were 16.7% of operating revenues for the three months ended September 30, 2026 compared to 21.0% for the same period in 2025. The increase in salaries, wages and employee benefits expense was primarily due to the 15.6% increase in tonnage moved period over period, which is impacted by the mix of internal and external miles driven.

Previous wording

Operating revenues increased $10.2 million, or 3.1%, to $338.5 million for the three months ended June 30, 2026 from $328.3 million for the three months ended June 30, 2025. This was due to an increase in Contract Logistics and Air and Ocean services, partially offset by the decrease in Ground services. Contract Logistics and Air and Ocean services increased due to an increase in demand from our customers. Ground services during the three months ended June 30, 2026 decreased primarily due to the conversion of certain customers to Expedited Freight that were previously serviced by Omni Logistics in the prior period, as discussed above in the Expedited Freight segment section.

Current wording

Operating revenues decreased $27.3 million, or 8.0%, to $312.3 million for the three months ended September 30, 2026 from $339.6 million for the three months ended September 30, 2025. This was due to a decrease in Ground services, partially offset by an increase in Contract Logistics and Air and Ocean services. Ground services decreased during the three months ended September 30, 2026 primarily due to the sale of a business unit during the third quarter of 2026, which reduced revenue by $18.0 million compared to the prior period, as well as reduced demand and the conversion of certain customers previously serviced by Omni Logistics to Expedited Freight, as discussed above in the Expedited Freight segment section. Contract Logistics and Air and Ocean services increased due to an increase in demand from our customers.

Previous wording

Operating revenues increased $0.6 million, or 1.0%, to $59.7 million for the three months ended June 30, 2026 from $59.1 million for the three months ended June 30, 2025. This increase was driven by a 9.3% increase in drayage revenue per shipment, which was driven by an increase in the fuel portion of our drayage revenue, partially offset by a 0.6% reduction in drayage shipments. Operating revenues were impacted by a decrease in non-drayage revenue of $4.3 million as compared to the prior year period.

Current wording

Operating revenues increased $5.1 million, or 8.8%, to $63.5 million for the three months ended September 30, 2026 from $58.3 million for the three months ended September 30, 2025. This increase was driven by a 14.1% increase in drayage revenue per shipment, reflecting an increase in our length of haul and in the fuel portion of our drayage revenue, and a 1.7% increase in drayage shipments. Operating revenues were impacted by a decrease in non-drayage revenue of $4.5 million as compared to the prior year period.

Previous wording

Purchased transportation increased $2.0 million, or 10.2%, to $22.1 million for the three months ended June 30, 2026 from $20.0 million for the three months ended June 30, 2025. Purchased transportation was 37.0% of operating revenues for the three months ended June 30, 2026 compared to 33.9% 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 increased based on several factors including changes in mix of drayage and non-drayage revenues, length of haul, lane density, and mix of internal versus external miles driven.

Current wording

Purchased transportation increased $4.9 million, or 25.3%, to $24.2 million for the three months ended September 30, 2026 from $19.3 million for the three months ended September 30, 2025. Purchased transportation was 38.2% of operating revenues for the three months ended September 30, 2026 compared to 33.1% 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 increased based on several factors including changes in mix of drayage and non-drayage revenues, length of haul, lane density, and mix of internal versus external miles driven.

Previous wording

Operating revenues increased $23.0 million, or 1.9% to $1,255.1 million for the six months ended June 30, 2026 compared to $1,232.1 million for the six months ended June 30, 2025. The increase was primarily associated with an increase in tonnage shipped and an increase in revenue per hundredweight in our Expedited Freight segment. The results for our reportable segments are discussed in detail below.

Current wording

Operating revenues increased $65.1 million, or 3.5%, to $1,928.9 million for the nine months ended September 30, 2026 compared to $1,863.9 million for the nine months ended September 30, 2025. The increase was primarily associated with an increase in tonnage shipped and an increase in revenue per shipment in our Expedited Freight segment. The results for our reportable segments are discussed in detail below.

Previous wording

Operating expenses increased $228.1 million, or 18.9%, to $1,436.0 million for the six months ended June 30, 2026 compared to $1,207.8 million for the six months ended June 30, 2025. The increase was primarily due to the $244.0 million goodwill impairment charge associated with our Omni Logistics segment and increased other operating expenses, partially offset by reductions in salaries, wages and employee benefits. Refer to Note 5—Goodwill and Other Intangible Assets for additional information.

Current wording

Operating expenses increased $241.3 million, or 13.2%, to $2,065.9 million for the nine months ended September 30, 2026 compared to $1,824.6 million for the nine months ended September 30, 2025. The increase was primarily due to the $244.0 million goodwill impairment charge associated with our Omni Logistics segment and increased other operating expenses, partially offset by reductions in salaries, wages and employee benefits. Refer to Note 2—Goodwill and Other Intangible Assets for additional information.

Previous wording

Operating loss was $180.9 million for the six months ended June 30, 2026 compared to operating income of $24.3 million for the six months ended June 30, 2025. The change in operating loss was primarily due to the $244.0 million goodwill impairment charge associated with our Omni Logistics segment, partially offset by profit improvement due to increased revenues in our Expedited Freight segment and a reduction in Corporate expenses.

Current wording

Operating loss was $137.0 million for the nine months ended September 30, 2026 compared to operating income of $39.3 million for the nine months ended September 30, 2025. The change in operating loss was primarily due to the $244.0 million goodwill impairment charge associated with our Omni Logistics segment, partially offset by profit improvement due to increased revenues in our Expedited Freight segment and a reduction in Corporate expenses.

Previous wording

Total other expense decreased $1.4 million, or 1.4%, to expense of $101.6 million for the six months ended June 30, 2026 compared to an expense of $103.0 million for the six months ended June 30, 2025. The decrease in total other expense was primarily due to a decrease in foreign currency exchange of $6.7 million and a decrease of interest expense of $3.6 million compared to the same period in the prior year. Partially offsetting these decreases is an $8.6 million increase in expense associated with the liabilities under the Tax Receivable Agreement.

Current wording

Total other expense decreased $5.1 million, or 3.6%, to expense of $136.3 million for the nine months ended September 30, 2026 compared to an expense of $141.4 million for the nine months ended September 30, 2025. The decrease in total other expense was primarily due to gains of $10.6 million on the sales of business units within our Omni Logistics segment during the nine months ended September 30, 2026. Additionally, foreign currency exchange decreased by $5.9 million and interest expense decreased by $4.2 million compared to the same period in the prior year. Partially offsetting these decreases is a $14.7 million increase in expense associated with the change in liabilities under the Tax Receivable Agreement.

Previous wording

The effective tax rate for the six months ended June 30, 2026 was (0.6)% compared to (3.6)% for the six months ended June 30, 2025. The effective tax rate for the six months ended June 30, 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 is recorded on the deferred tax asset, noncontrolling interest, and foreign and state and local income taxes. Additionally, the effective tax rate for the six months ended June 30, 2026 varied from the statutory United States federal income tax rate of 21.0% due to the tax effects of the goodwill impairment and related change in the valuation allowance.

Current wording

The effective tax rate for the nine months ended September 30, 2026 was (0.6)% compared to (3.2)% for the nine months ended September 30, 2025. The effective tax rate for the nine months ended September 30, 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 is recorded on the deferred tax asset, noncontrolling interest, and foreign and state and local income taxes. Additionally, the effective tax rate for the nine months ended September 30, 2026 varied from the statutory United States federal income tax rate of 21.0% due to the tax effects of the goodwill impairment and related change in the valuation allowance.

Previous wording

The Company is organized as an umbrella partnership C Corporation. Net losses are allocated to noncontrolling interest holders based on the percentage ownership in Opco of the Class B shareholders. Approximately 15.6% of consolidated net losses were attributed to noncontrolling interest for the six months ended June 30, 2026 compared to 22.5% for the six months ended June 30, 2025. The decrease in the percentage is due to exchanges of Class B shares to common stock from June 30, 2025 through June 30, 2026 and net losses for Forward Air Corporation, which are not allocated to noncontrolling interest and consist primarily of changes in the value of the Tax Receivable Agreement liability and the impact of income tax expense.

Current wording

The Company is organized as an umbrella partnership C Corporation. Net income (loss) is allocated to noncontrolling interest holders based on the percentage ownership in Opco of the Class B shareholders. Approximately 16.9% of consolidated net losses were attributed to noncontrolling interest for the nine months ended September 30, 2026 compared to 24.5% for the nine months ended September 30, 2025. The decrease in the percentage is due to exchanges of Class B shares to common stock from September 30, 2025 through September 30, 2026 and net income (loss) for Forward Air Corporation, which is not allocated to noncontrolling interest and consists primarily of changes in the value of the Tax Receivable Agreement liability and the impact of income tax expense.

Previous wording

Operating revenues increased $84.7 million, or 16.7%, to $591.8 million for the six months ended June 30, 2026 from $507.1 million for the six months ended June 30, 2025. The increase was primarily due to increased Truckload revenues, which resulted from an increase of $37.2 million in intersegment revenues with Omni Logistics' Ground operations and $16.7 million in operating revenues from the conversion of certain customers previously serviced by Omni Logistics in the prior year. Network revenues increased reflecting a 2.4% increase in tonnage and a 5.3% increase in revenue per hundredweight as compared to the same period in the prior year.

Current wording

Operating revenues increased $163.5 million, or 21.4%, to $929.2 million for the nine months ended September 30, 2026 from $765.6 million for the nine months ended September 30, 2025. The increase was primarily due to increased Network revenues reflecting a 6.8% increase in tonnage and an 11.9% increase in revenue per shipment as compared to the same period in the prior year. The increase in Truckload revenues was primarily due to higher prices per shipment, driven by an increase in contracted and spot rates. Truckload revenues also increased in part from $29.9 million in intersegment revenues with Omni Logistics' Ground services and $25.1 million in operating revenues from the conversion of certain customers previously serviced by Omni Logistics in the prior year.

Previous wording

Purchased transportation increased $64.5 million, or 26.3%, to $309.6 million for the six months ended June 30, 2026 from $245.1 million for the six months ended June 30, 2025. Purchased transportation was 52.3% of operating revenue for the six months ended June 30, 2026 compared to 48.3% for the same period in 2025. Purchased transportation includes Leased Capacity Providers, third-party motor carriers, and transportation intermediaries, while Company-employed drivers are included in salaries, wages and employee benefits. Purchased transportation primarily increased in correlation with the increase in revenues compared to the same period in the prior year and the mix of revenue between Network and Truckload where Truckload requires additional amounts of purchased transportation.

Current wording

Purchased transportation increased $118.7 million, or 32.1%, to $489.1 million for the nine months ended September 30, 2026 from $370.4 million for the nine months ended September 30, 2025. Purchased transportation was 52.6% of operating revenues for the nine months ended September 30, 2026 compared to 48.4% for the same period in 2025. Purchased transportation includes Leased Capacity Providers, third-party motor carriers, and transportation intermediaries, while Company-employed drivers are included in salaries, wages and employee benefits. Purchased transportation primarily increased in correlation with the increase in revenues compared to the same period in the prior year and the mix of revenue between Network and Truckload where Truckload requires additional amounts of purchased transportation.

Previous wording

Salaries, wages and employee benefits increased $6.7 million, or 6.3%, to $113.2 million for the six months ended June 30, 2026 from $106.5 million for the six months ended June 30, 2025. Salaries, wages and employee benefits were 19.1% of operating revenues for the six months ended June 30, 2026 compared to 21.0% for the same period in 2025. The increase in salaries, wages and employee benefits expense was primarily due to revenue increases compared to the same period in the prior year.

Current wording

Salaries, wages and employee benefits increased $8.7 million, or 5.4%, to $169.6 million for the nine months ended September 30, 2026 from $160.9 million for the nine months ended September 30, 2025. Salaries, wages and employee benefits were 18.3% of operating revenues for the nine months ended September 30, 2026 compared to 21.0% for the same period in 2025. The increase in salaries, wages and employee benefits expense was primarily due to revenue increases compared to the same period in the prior year.

Previous wording

Operating income increased $19.8 million, or 56.4%, to $54.9 million for the six months ended June 30, 2026 compared to $35.1 million for the six months ended June 30, 2025. Operating income was 9.3% of operating revenues for the six months ended June 30, 2026 compared to 6.9% for the same period in 2025. The increase in operating income was primarily due to increased revenues and improved operating leverage compared to the same period in the prior year.

Current wording

Operating income increased $36.8 million, or 67.5%, to $91.4 million for the nine months ended September 30, 2026 compared to $54.6 million for the nine months ended September 30, 2025. Operating income was 9.8% of operating revenues for the nine months ended September 30, 2026 compared to 7.1% for the same period in 2025. The increase in operating income was primarily due to increased revenues and improved operating leverage compared to the same period in the prior year.

Previous wording

Operating revenues decreased $10.8 million, or 1.7%, to $641.0 million for the six months ended June 30, 2026 from $651.8 million for the six months ended June 30, 2025. This was due to a decrease in Ground services, partially offset by an increase in Contract Logistics and Air and Ocean services. Ground services for the six months ended June 30, 2026 decreased primarily due to the conversion of certain customers to Expedited Freight that were previously serviced by Omni Logistics in the prior year, as discussed above in the Expedited Freight segment section. Contract Logistics and Air and Ocean services increased due to an increase in demand from our customers.

Current wording

Operating revenues decreased $38.1 million, or 3.8%, to $953.3 million for the nine months ended September 30, 2026 from $991.4 million for the nine months ended September 30, 2025. This was due to a decrease in Ground services, partially offset by an increase in Contract Logistics and Air and Ocean services. Ground services decreased for the nine months ended September 30, 2026 compared to prior year primarily due to reduced demand and the conversion of certain customers previously serviced by Omni Logistics to Expedited Freight, as discussed above in the Expedited Freight segment section. Ground services also decreased due to the sale of a business unit during the third quarter of 2026, which reduced revenue by $15.2 million. Contract Logistics and Air and Ocean services increased due to an increase in demand from our customers.

Previous wording

Purchased transportation decreased $11.7 million, or 3.2%, to $359.1 million for the six months ended June 30, 2026 from $370.8 million for the six months ended June 30, 2025. Purchased transportation was 56.0% of operating revenues for the six months ended June 30, 2026 compared to 56.9% for the six months ended June 30, 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 purchased transportation compared to Ground and Air and Ocean services.

Current wording

Purchased transportation decreased $28.8 million, or 5.1%, to $538.2 million for the nine months ended September 30, 2026 from $567.1 million for the nine months ended September 30, 2025. Purchased transportation was 56.5% of operating revenues for the nine months ended September 30, 2026 compared to 57.2% for the nine months ended September 30, 2025. The decrease was primarily driven by a reduction in operating revenues and a favorable shift in product mix. This shift included an increase in Contract Logistics, which generally require lower levels of purchased transportation compared to Ground and Air and Ocean services.

Previous wording

Salaries, wages and employee benefits decreased $2.7 million or 2.3%, to $115.6 million for the six months ended June 30, 2026 from $118.4 million for the six months ended June 30, 2025. Salaries, wages and employee benefits were 18.0% of operating revenues for the six months ended June 30, 2026 compared to 18.2% for the same period in 2025. Salaries, wages and employee benefits primarily decreased due to the lower operating revenues during the current year period.

Current wording

Salaries, wages and employee benefits decreased $14.3 million or 8.1%, to $162.4 million for the nine months ended September 30, 2026 from $176.7 million for the nine months ended September 30, 2025. Salaries, wages and employee benefits were 17.0% of operating revenues for the nine months ended September 30, 2026 compared to 17.8% for the same period in 2025. Salaries, wages and employee benefits primarily decreased due to the lower operating revenues during the current year.

Previous wording

Insurance and claims decreased $3.1 million, or 80.7%, to $0.7 million for the three months ended June 30, 2026 from $3.9 million for the three months ended June 30, 2025. Insurance and claims were 0.1% of operating revenues for the three months ended June 30, 2026 compared to 0.6% for the same period in 2025. The decrease in insurance and claims was primarily due to timing of claims and insurance reimbursements.

Current wording

Insurance and claims decreased $2.1 million, or 56.0%, to $1.7 million for the nine months ended September 30, 2026 from $3.8 million for the nine months ended September 30, 2025. Insurance and claims were 0.2% of operating revenues for the nine months ended September 30, 2026 compared to 0.4% for the same period in 2025. The decrease in insurance and claims was primarily due to timing of claims and insurance reimbursements.

Previous wording

During the three months ended June 30, 2026, we recorded a $244.0 million goodwill impairment charge as a result of the anticipated decrease in future revenues from the Customer, together with a sustained decrease in our stock price. There were no impairment charges during the three months ended June 30, 2025. Refer to Note 5—Goodwill and Other Intangible Assets for additional information.

Current wording

During the nine months ended September 30, 2026, we recorded a $244.0 million goodwill impairment charge as a result of the anticipated decrease in future revenues from the Customer, together with a sustained decrease in our stock price. There was no impairment charges during the nine months ended September 30, 2025. Refer to Note 2—Goodwill and Other Intangible Assets for additional information.

Previous wording

Operating loss was $229.3 million during the six months ended June 30, 2026 compared to operating income of $10.6 million for the six months ended June 30, 2025. The change in operating loss was primarily due to the $244.0 million impairment of goodwill.

Current wording

Operating loss was $217.1 million during the nine months ended September 30, 2026 compared to operating income of $20.3 million for the nine months ended September 30, 2025. The change in operating loss was primarily due to the $244.0 million impairment of goodwill.

Previous wording

Operating revenues decreased $8.8 million, or 7.3%, to $112.8 million for the six months ended June 30, 2026 from $121.6 million for the six months ended June 30, 2025. This decrease was primarily due to loss of non-drayage revenue, which represented $8.2 million of operating revenues for the six months ended June 30, 2025. The decrease in operating revenues was also driven by a 4.8% reduction in drayage shipments, partially offset by a 4.4% increase in drayage revenue per shipment, which was driven by an increase in the fuel portion of our drayage revenue. 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.

Current wording

Operating revenues decreased $3.7 million, or 2.1%, to $176.3 million for the nine months ended September 30, 2026 from $180.0 million for the nine months ended September 30, 2025. This decrease was primarily due to loss of non-drayage revenue, which represented $12.7 million in operating revenues for the nine months ended September 30, 2025. The decrease in operating revenues was also driven by a 2.7% reduction in drayage shipments, partially offset by a 7.6% increase in drayage revenue per shipment, which was driven by an increase in our length of haul and an increase in the fuel portion of our drayage revenue. 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.

Previous wording

Purchased transportation increased $1.2 million, or 3.0%, to $41.4 million for the six months ended June 30, 2026 from $40.2 million for the six months ended June 30, 2025. Purchased transportation was 36.7% of operating revenues for the six months ended June 30, 2026 compared to 33.1% 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 increased based on several factors including changes in mix of drayage and non-drayage revenues, length of haul, lane density, and mix of internal versus external miles driven.

Current wording

Purchased transportation increased $6.1 million, or 10.2%, to $65.7 million for the nine months ended September 30, 2026 from $59.6 million for the nine months ended September 30, 2025. Purchased transportation was 37.2% of operating revenues for the nine months ended September 30, 2026 compared to 33.1% 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 increased based on several factors including changes in mix of drayage and non-drayage revenues, length of haul, lane density, and mix of internal versus external miles driven.

Previous wording

Other operating expenses decreased $2.6 million, or 26.7%, to $7.2 million for the six months ended June 30, 2026 compared to $9.9 million for the six months ended June 30, 2025. Other operating expenses were 6.4% of operating revenues for the six months ended June 30, 2026 compared to 8.1% for the same period in 2025. The decrease in other operating expenses as a percentage of revenue was primarily driven by cost reductions in response to the decrease in revenue.

Current wording

Other operating expenses decreased $3.0 million, or 20.3%, to $11.9 million for the nine months ended September 30, 2026 compared to $15.0 million for the nine months ended September 30, 2025. Other operating expenses were 6.9% of operating revenues for the nine months ended September 30, 2026 compared to 8.3% for the same period in 2025. The decrease in other operating expenses as a percentage of revenue was primarily driven by cost reductions in response to the decrease in revenue.