Forward Air Corp. (NASDAQ:FWRD) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 26, 2018 • 09:00 am ET


Forward Air Corp. (NASDAQ:FWRD) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Thank you for joining Forward Air Corporation's First Quarter 2018 Earnings Release Conference Call. Before we begin, I'd like to point out that both the press release and webcast presentation for this call are accessible on the Investor Relations section of Forward Air's website at

With us this morning are Chairman, President and CEO, Bruce Campbell; and Senior Vice President and CFO, Mike Morris. By now, you should have received the press release announcing our first quarter 2018 results, which was furnished to the SEC on Form 8-K and on the wire yesterday after market close.

Please be aware that during this conference call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding the company's outlook for the first quarter and fiscal year 2018.

These statements are based on current information and our current expectations. As such, they are subject to risks and other factors that may cause actual operations and results to differ materially from the results discussed in the forward-looking statements. 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. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

And now I'll turn the call over to Mike Morris, Senior Vice President and CFO of Forward Air. Please go ahead.

Michael Morris

Thank you, Nick, and good morning to everyone on the call. Before we get to Q&A, we would like to update you on a few strategic and other items. On the strategy front, our LTL group is continuing to make investments in drivers and expanded capacity to provide our current customers with dependable, expedient and readily available freight movements. To grow its customer base, our LTL team has also begun serving the expedited segment of the 3PL market, which we believe is a $2 billion addressable opportunity.

It remains early stages, but we have implemented local pickup and delivery at the terminals that will initially participate in this initiative, and we have our tariffs loaded in roughly 175 transportation management systems. We're excited about being in a position to provide sustained service to our current customers while penetrating the 3PL market to selectively supplement our existing density with heavier-weight shipments.

Our Truckload business continues to implement the McLeod operating system, which will help us grow by improving our load visibility and real-time decision-making. The dry van business in our Truckload group has been migrated to McLeod, and we're in the process of converting the refrigerated business. We're also enhancing our focus on growing our nonpharmaceutical refrigerated offerings as we see a strong secular growth trend for this mode.

Our Intermodal group is pursuing additional acquisitions. We're now a top 10 drayage provider, with an annualized revenue run rate of $175 million. We have a strategic road map of organic and