Forward Air CorporationFWRDNASDAQ
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Operator: Welcome to the Forward Air Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Tony Carreño, Senior Vice President of Treasury and Investor Relations.
Tony Carreño: Thank you, operator, and good afternoon, everyone. Welcome to Forward Air's Third Quarter 2025 Earnings Conference Call. With us this afternoon are Shawn Stewart, Chief Executive Officer; and Jamie Pierson, Chief Financial Officer. By now, you should have received the press release announcing Forward Air's third quarter 2025 results, which was also furnished to the SEC on Form 8-K. We have also furnished a slide presentation outlining third quarter 2025 earnings highlights and a business update. Both the press release and slide presentation for this call are accessible on the Investor Relations section of Forward Air's website at forwardair.com. Please be aware that certain statements in the company's earnings release announcement and on this conference call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes 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 fiscal year 2025. 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. For additional information concerning these risks and factors, please refer to our filings with the SEC and the press release and slide 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. 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 today's press release and slide presentation. I will now turn the call over to Shawn.
Shawn Stewart: Good afternoon, everyone, and thank you for joining us. Today, there are 3 main topics that I'd like to cover. First, I will provide an update on our strategic alternatives review process. Second, I will provide an update on the progress we are making on our transformational journey, and I will close with a few comments on the third quarter results before turning the call over to Jamie. Beginning with the strategic alternatives review, we are aware of the rumors in the market over the last several months. I want to be clear that the strategic alternatives review process is ongoing. I also want to acknowledge the length of the process to date and emphasize a few critical points. Over the course of this review, we have had discussions with multiple interested parties and discussions are continuing. We conducted appropriate proactive outreach to interested parties. Along the way, other parties have also initiated dialogue with us at different points in time. Obviously, we welcomed inbound inquiries, the timing of which was out of our control and has contributed in part to the length of this review. The review to date has been a thorough and inclusive process to explore all available opportunities to maximize value. The process has and continues to include the evaluation of a potential sale, merger or other strategic or financial transactions relative to the long-term value potential of the company on a stand-alone basis, as well as a review of the components of our portfolio to ensure there is a long-term strategic fit. Our Board is taking the time it needs to be methodical, thoughtful and comprehensive to ensure that we pursue the best possible outcome for the company and all of our shareholders. With all that said, we do not intend to disclose further developments relating to the process until we determine an update to be appropriate or necessary. And when we do, we will let you know. Our policy is not to comment on rumors, and that will continue to be our policy. On a commercial and leadership basis, the good news is that we did not recognize at the outset, is how much this process would bring our team together. We are more aligned and more in tune and more connected beyond what I would have ever thought. And as you will see when Jamie previews the results, we are focused on running the business and are continuing to deliver positive period-over-year results in one of the most challenging markets in years. As for my second point and our continued transformation, I am pleased that we are also continuing to execute our plan to become a unified company as discussed on previous calls. Over the past several quarters, as we work to transform the operations of our U.S. and Canadian businesses, we have focused on a clear and strategic goal, which was to unify our operations under a new regional structure and harmonizing our blueprint. The goal laid the foundation for the creation of our One Ground Network, a positive step forward in aligning our business for the long-term success under a single leader, Tim Osborne, President of U.S. and Canada Operations. The One Ground Network brings together the operations of our businesses to form a more cohesive and agile organization. It includes the unification of our U.S. domestic ground operations and brings together key service lines: line haul, pickup and delivery, truckload brokerage, and expedited services into a single streamlined structure. By doing so, we are removing silos, simplifying how we work and unlocking new efficiencies. However, it is important to note that we expect our sales channels to continue to function separately, providing the same solutions and service that they always have, while our operations remain fully agnostic across the network, delivering the same best-in-class, on-time service and one, if not the best industry claims results. Our team handles every shipment with the same discipline, precision and care, keeping our focus where it belongs on service-sensitive freight and operations excellence. For our customers, it means the same seamless and reliable experience that they have been accustomed to and expect from us. For our employees, it means clear priorities, enhanced collaboration and more opportunities to grow within a connected network. For our business and future results, it positions us to accelerate and leverage growth. We are also continuing to rationalize our tech stack, including upgrading and minimizing the number of systems across the company. We expect these changes to enhance efficiencies, improve real-time data-driven decisions and drive cost savings as a result. Regarding the quarterly financial results, we reported a consolidated EBITDA, which is calculated pursuant to our credit agreement of $78 million, in line with the $77 million reported in the second quarter of this year. I am extremely proud of our team for focusing on what they can control and delivering a solid quarter as we navigate through an extended freight recession, a strategic alternatives process and continued transformation of the company. We are focused on delivering industry-leading quality of service with our world-class leaders, while tightly managing cost and prudently managing the business. We are optimistic that market conditions will eventually rebound, and our focus is on continuing the progress we have made over the past year and keeping that momentum over the long term. With that, I will now turn the call over to Jamie to go through the detailed results for the third quarter.
Jamie Pierson: Thanks, Shawn, and good afternoon, everyone. As you heard from Shawn, we reported consolidated EBITDA of $78 million in the quarter. The third quarter and LTM results were favorably impacted by cost reduction initiatives that we enacted equating to approximately $12 million on an annualized basis. The initiatives primarily included rightsizing our business to align with the current freight demand and on our ongoing transformation strategy that Shawn discussed earlier. On an adjusted EBITDA basis, we are cranking out very consistent performance, reporting $75 million in the third quarter of this year compared to $74 million in the second quarter of this year and $76 million in the third quarter of last year. At the Expedited Freight segment, third quarter reported EBITDA was $30 million with a margin of 11.5%. The margin is the second highest since the fourth quarter of 2023, and is in line with the $30 million reported EBITDA and 11.6% margin in the second quarter of this year. In the third quarter a year ago, reported EBITDA was also $30 million with a margin of 10.4%. Despite a challenging freight environment and a decline in tonnage, we have significantly improved pricing programs and actively managed discretionary expenses. Our focus has been on maintaining the right freight mix in our network at optimal prices, which has resulted in an improvement in reported EBITDA, as it has grown from $18 million in the fourth quarter of 2024 to $30 million in both the second and the third quarters of 2025, and the margin has improved from 6.6% to 11.6% and 11.5%, respectively. At the Omni Logistics segment, we're excited with the steady progress that we're seeing. In the third quarter, we achieved the highest revenue and reported EBITDA, excluding the impact of goodwill since the transaction in the first quarter of last year. Sequentially, from the second quarter to the third quarter of this year, revenue increased by $12 million to $340 million and reported EBITDA increased from $30 million to $33 million. The margin also improved sequentially by 60 basis points to 9.6%. On a year-over-year basis, reported EBITDA improved from $27 million in the third quarter last year compared to $33 million this year, which is a 22% increase. The margin also improved by 160 basis points, up from 8%. Relative to the challenges in the broader market and especially port activity, the Intermodal segment and the drayage business we service continues to deliver solid results. This management team persevered and performs well in both good and challenging market environments. In my opinion, they are the best team in the drayage space. In the third quarter, this segment reported EBITDA of $8 million, which was in line with the $9 million in the second quarter of this year and the third quarter a year ago. Rolling up all of the segments and on an LTM basis, consolidated EBITDA was $299 million. As usual, we have detailed the information used to reconcile the adjusted and consolidated EBITDA results on Slide 31 of the presentation. And as a quick heads-up regarding consolidated EBITDA for the prior 3 quarters, you will see that we have adjusted the previously reported amounts by the actions we took in the third quarter to improve our cost structure. The credit agreement allows for the inclusion of unrealized and pro forma savings from these actions to be included in our historical consolidated EBITDA and requires that they be spread back in time to the period in which the expense would have occurred. As such, we appropriately adjusted the prior quarters to reflect the impacts of the cost savings. If you would, please reference Page 12 in the slide presentation issued today, and you will be able to see what we reported in the past and updated for the most recent cost-out and pro forma actions. Turning to cash flow, cash and liquidity. We reported $53 million in cash provided by operations in the third quarter, which is a $2 million increase compared to the $51 million in cash provided by operations a year ago. For the first 3 quarters of 2025, we've reported $67 million of cash provided by operations, which is a $113 million improvement compared to the same period a year ago. As for liquidity, we ended the third quarter with $413 million in total liquidity, comprised of $140 million in cash and $273 million in availability under the revolver. This is a $45 million increase compared to the $368 million at the end of the second quarter. And as usual, I'd like to leave you with a few additional thoughts for the quarter. The first of which is, as you've heard from Shawn in his opening remarks, we are making progress upgrading our tech stack as a part of the broader transformation. This includes the One ERP initiative to move from multiple ERP systems to one. This project will unite all company financial systems on a single streamlined platform. With all financial data in one place, standardized reporting and uniform processes, we expect our team will be more efficient and more effective. The project will have a phased rollout and with a completion expected by the end of next year. Point two, in a tough market, we continue our focus on controlling expenses and adjusting to demand by rightsizing our cost structure commensurate with the support needed to continue serving our customers at the highest level, and the level they are accustomed to receiving from us. It is important to note that the focus on our cost structure did not impact our service levels and still led to another solid quarter and sequential improvement in consolidated EBITDA. The final point is prioritization and focus on cash generation. As you heard earlier, cash provided by operations significantly improved by more than $100 million in the first 9 months of this year compared to a year ago. On Slide 23 of the earnings presentation, you will see that on a non-GAAP basis, we generated $79 million in operating cash flow in the third quarter and $176 million year-to-date through the third quarter. I will now pass the mic back to Shawn for his closing comments before Q&A.
Shawn Stewart: Thank you, Jamie. In closing, I want to express my deep pride in our team for their unwavering dedication and consistent focus on the customer. Their ability to execute operationally with precision while maintaining rigorous control over cost has been truly exceptional. This disciplined approach not only strengthens our day-to-day performance, but also positions us well for the challenges and opportunities ahead. Despite the uncertainty in today's macroeconomic environment, I remain confident in the strength of our team. We have built a solid foundation that is well equipped to drive sustainable long-term growth. Our team's commitment to excellence ensures that we continue to deliver meaningful and measurable value to our customers and are positioned very well for when the freight stabilizes. As we go into Q&A, I would like to focus our comments on the state of the industry, the business and not on the strategic alternatives review process. As you know, we cannot further comment. Thanks in advance for your understanding. I will now turn the call over to the operator to take questions. Operator?
Operator: [Operator Instructions] Our first question comes from Bruce Chan with Stifel.
J. Bruce Chan: Maybe just wanted to start with Omni. That business has certainly come a long way, and it looks like you're finding some stability here with EBITDA margins. But the segment has also gone through a lot of change, especially given the volatile environment. So maybe as you think about that business longer term, if you could just remind us what your longer-term margin targets would be there? What kind of earnings power you think you can see in that business? And then how do you -- maybe think about that in the context of seasonality as we move into Q4 and 2026?
Shawn Stewart: Bruce, it's Shawn. So yes, I would say we've done a really good job of turning this business around. really driving the synergy selling where we had segments of customers' revenue in one of our many diversified offerings and spreading that more into the other offerings. And that's really where the growth is coming from. I would say it's rather hard to say right now what that optimal margin is because it's suppressed right now just because of the overall market. But Jamie, do you want to comment at all on margins or?
Jamie Pierson: Yes. Bruce, if you look at Page 28 in the slide deck, it's one of my favorite pages because it has a couple of different interpretations. I'm going to go right to left. And then I might answer your question on Omni specifically because that's what you're asking. If you look at the Intermodal, the drayage business continues to be at the highest end of the publicly traded peers. I mean -- and there is no pure comp. We all know that. But they continue to be a market leader in terms of margin in the Intermodal side. And then on the Omni, we've got a collection here of 5 comps. You've already done the analysis, you know who they are. But we're at the upper end of the margin already in our collection of assets. And the real upside is on the LTL or the expedited side of the business. So we've got -- that's where I'd say the greatest opportunity is. And the one thing that I think it's lost here on this page, even talking to you specifically on -- or answering your question specifically on Omni is that when you buy 1 share of stock in Forward Air, you're buying a portfolio or a collection of logistic assets. And Omni is one of those. And it actually is performing very well, especially on the contract logistics side of the equation. So I think we've exceeded, in my opinion, and many different people out there can argue with me. But I think we've exceeded most people's expectations in the way that this particular segment has performed since the acquisition. So I'd say that's an incredibly long-winded answer to your question that we're at the upper end of the margins already.
J. Bruce Chan: No, that's really good color. So I guess if I could just follow up on that. It sounds like we're at the point now where we can start to think about maybe some more seasonality in this business and other businesses. And if I could expand on that a little bit, any kind of commentary on how you're thinking about fourth quarter? I know you all tend to have a little bit more retail exposure, for example, than some of your peers.
Jamie Pierson: Yes. So are you talking about Omni specifically or the portfolio?
J. Bruce Chan: Yes. First part, Omni and then if you want to brought that up to the rest of the portfolio.
Jamie Pierson: Yes. So if you look at Omni, it's not going to be as seasonal as I think you would otherwise -- would surmise that it would be only because of the warehouse side of the business, right? So that's a pretty stable business. It doesn't have a real seasonal trend to it as much as it does the air and the ocean. I'm looking forward, Bruce, to the day soon in the next probably couple of quarters that we're going to be able to break that -- those segments into their different services. But I'll tell you right now, on the Omni basis, it's going to be a little bit more muted than you would otherwise anticipate because it doesn't have that seasonality. Now on Intermodal, if you see the port volumes as they're forecasted in the next 3 months, by month, it's going to be continued, what I would say, malaise, not a great port read. But I'll tell you what, this team continues to stroke out $8 million to $10 million in EBITDA every single quarter, irrespective of the environment in which they operate. And then lastly, on the LTL side, what we're noticing is no different than what our peers, our competitors said on their calls, is more of the same of what we have right now. I'm not seeing a seasonal leg down nor am I seeing a -- it's not going to be increasing, obviously, now in November being an 18-day month. But I'm just seeing a little -- I'm seeing more of what we've experienced over the last couple of quarters.
Operator: Our next question comes from the line of Stephanie Moore with Jefferies.
Stephanie Benjamin Moore: I wanted to follow up on the LTL side. Look, I think in previous calls and in our conversations, you've talked a lot about really fine-tuning the organization on the LTL front and really just getting, I guess, adjusting operating costs to revenue, and it clearly remains a really weak environment. So maybe you could give us a little bit of an update on the progress on kind of realigning costs, and maybe kind of bifurcate what's just been a function of this is a weak environment and what is something that we think is sustainable that really speaks to the actions that you've made over the last year?
Shawn Stewart: Stephanie, it's Shawn. So I'll take the first part of that and let Jamie add in. So the one thing that -- especially to our peer group on comps, the one thing that we want to make sure to constantly remind the analysts, especially is that we are not a fixed cost network. We're a variable cost network. And a majority of our fleet is owner operators. And so one of the things that the team does extremely well is they adjust their purchase transportation cost based on volume. So when volume is down, mainly what we do is we move those drivers from an LTL segment to the Truckload segment. And right now, truckload is booming. And so we're not letting go of any drivers. We're just moving them from LTL to TL. And we've really capitalized by doing so. And so that brings down the purchase transportation cost. And then a couple of internal initiatives that we've done is, obviously, we've dramatically improved to the operating team, our productivity measures on the floor, as well as we've introduced and we've been running for several quarters now, 2 different optimizers looking at the miles that we run and the service that we offer and how do we do that with less miles and still not jeopardizing our service. And we've -- Tim and team have now decided on one optimizing tool that we will use moving forward. It's not a tool that was here, at least when I got here, and they've done a fantastic job. So that's more of not just removing the drivers from LTL over to TL, but at the same time, drawing down miles and being more optimal as we manage through this time. But it's something you should do anyways even in high seasons as well as these low seasons. So hopefully, that helps, but I'll be quiet and see if you have any questions to what I just said.
Jamie Pierson: Steph, let me add on it real quick with a little bit more specificity. If you think about it on a year-over-year basis, in terms of improved operating performance, we took out a little more than 300 FTEs on a year-over-year basis. And over that same period of time, we actually improved safety, arguably improved quality, held claims flat at one of the best rates in the entire industry, and we have fewer labor hours per shipment. So operationally, pretty damn good. And then to build on Shawn's point about it being more of a variable versus a fixed solution, certainly helps us flex down in times such as this. But if you look at Page 13 of the earnings presentation, on a reported basis, even though we've got slightly lower revenue, we're still cranking out $30 million in reported EBITDA and a mid-11% EBITDA margin.
Stephanie Benjamin Moore: Yes. No, absolutely. And I think -- and Shawn, I think that's crystal clear. Maybe just as a follow-up question, I appreciate that you really can't and don't want to speak on terms of anything on the process or the like. But maybe asked a different way, is there any update on when you might be able to speak on the process?
Shawn Stewart: I would say, Steph, if I had that, I would. So look, it's a very detailed process that the Board is running. And as soon as we can, we will update you.
Operator: [Operator Instructions] Our next question comes from Scott Group with Wolfe Research.
Scott Group: So I just want to -- I know you can't say much, but I just want to make sure I'm understanding what you were trying to communicate in your prepared comments about the duration of this process. Is the point you were trying to make that -- not that there is a lack of interest or the interest was dropping, it's that there was incremental new interest and that is what's slowing down the process? Is that the point you were trying to make?
Shawn Stewart: So Scott, this is Shawn. No, I think I was pretty clear in the points I was trying to make. There was a good interest, obviously, in our organization and whereas different periods of times where interested parties came in. I'm not blaming wholeheartedly that that's what's elongated it. But between interested parties and other parties coming in at different times is where we are today.
Scott Group: Okay. You made a comment a minute ago that Truckload is booming. I have not heard that from anyone. And then, Jamie, you made a comment LTL was not really -- is stable and not really dropping off and a lot of the other guys have talked about LTL really dropping off. So those were just 2 interesting comments I haven't heard from others. So maybe if you could just add some color to those 2 things.
Shawn Stewart: Well, to be clear, our Truckload is booming. There's a lot of high tech moving. And that high tech requires asset-only companies, of which we are and a lot of security, and that is something that we're really great at. And so our Truckload is booming.
Jamie Pierson: Yes. And I'd even say that's the circle of livestock for us. So when I say LTL is stable, volume is down, but that volume is being -- modality is shifting from LTL to TL. So we're picking up some of the volume that we're losing on the LTL side on the TL side of the house, to support Shawn statement. And then in terms of LTL being stable, look, I don't -- I'm not trying to say that our volume is stable. That's not what I'm saying. It's clearly not. Volume is down, but there's 2 other things that we're doing in order to deliver stable earnings. And that is an increase in pricing and an absolute maniacal focus on operating more efficiently. So the stability of my comment is more on the $30 million of reported EBITDA for last quarter, this quarter and the quarter a year ago.
Scott Group: Okay. And then maybe just lastly, Jamie, just give us an update on how you're thinking about cash flow going forward into Q4? I know seasonally, there's the interest ramp in the debt payments. And then just remind us the calendar of when the credit, the covenants start to get a little tougher.
Jamie Pierson: Yes. Scott, you're all over it. So the semiannual senior secured note payments gets made in April and October. So the quarter that is in between is when we make all the money and then we generally lose a little bit in the quarter that we make that payment. We're just going to make more in the quarter that we don't. And it's exactly what we did this quarter. I'd say we did very well in terms of not only managing the operations, but also managing the balance sheet, which then increased cash by $45 million in this quarter as a stand-alone period. And then in terms of the covenant step down, we're at 6.75x this quarter. Next quarter, it starts to tighten by 0.25x and it does so every single quarter into the fourth quarter of 2026. At what point it levels out at 5.5x and it stays there through maturity.
Operator: Our next question comes from Christopher Kuhn with Benchmark.
Christopher Kuhn: I think in the past, you guys talked about the benefit of the combined company and giving us some examples. I mean, I'm just wondering if you have an update on that.
Shawn Stewart: Run that past me one more time, Chris, sorry.
Christopher Kuhn: Yes. I think in the past, you've talked about winning business as a combined company with Omni and the LTL business and some of the other businesses within Omni. So I don't know if, obviously, you still feel that way, but if you have any sort of thoughts on that?
Shawn Stewart: Yes. I mean, look, we -- on the Omni side, we win business regardless. And obviously, we want to put that into the, I'll say, the legacy Forward Air LTL. But if there's a solution that's better to get it -- to gain that business than outside of our network, we'll gain the business on the Omni side. But I would say in a lion's share, we put the majority of -- if it's a ground or a domestic sell only, we really focus on -- if we can't find a way initially to get in the network, we figure out a way eventually to put it in the network. So the combination of the 2 organizations really support the growth. But at the same time, we're still able to handle the legacy, what we call the indirect market with our fantastic freight forwarders and 3PLs, and do that in a proper mannerism to help them continue to grow with very minimal to none of conflict between our organizations. I'm not going to say there's none, but there's very minimal, and we've managed those through our partners. So it's working and it's working well. And I'm really pleased with what we are able to do as a combined company, especially compared to the onset of everybody thought this was going to be a disaster at least when I got here. So I think we're in a good place.
Christopher Kuhn: And then I think you talked about the LTL to TL conversion. I mean, obviously, any updates on that? Is that still going on? I guess, what do we need this TL sort of spot prices to start going back up to get that reversed?
Shawn Stewart: Yes. You've got a couple of things there that, yes, we need the spot rate to go up. The team moves our assets, LTL,TL, back and forth depending on volumes in LTL and depending on need on the TL side. And so that's a pretty constant move back and forth on a weekly or daily basis. But yes, going back to -- when you look at overall volumes with the spot market the way it is as low as it is, when you look at LTL volumes, they're in the Truckload capacity. And if an organization is able to trap and put it in a Truckload at a lower per pound rate basis than a traditional LTL, whether it be us or anybody else, that's what they're doing. But as that rate moves up, that shift from TL will start to slowly come back into LTL. And that's really what we -- that's the majority of where the volume is today that's not in LTL today. Jamie, you want to add?
Christopher Kuhn: So you think that shift occurs over time. It's not like it takes a while for them to go back from TL to LTL or it depends where you look at?
Shawn Stewart: It just depends on what their procure rate is and the longevity of that contract with those truckload providers.
Jamie Pierson: Yes, I would actually say it's not an event.
Shawn Stewart: Yes, it's not a onetime event. It's over time.
Jamie Pierson: Yes. So if you look at the Cass, and the Cass Index being like $1.25 a mile, it would probably have to creep back up over to the $1.50 a mile before you see something meaningful, but it's going to happen along the way. Anything above $1.50 to $1.60 per mile on the Cass, I would say is getting back to what I would term is a more normalized balanced LTL to TL market.
Operator: Our next question comes from Bascome Majors with Susquehanna.
Bascome Majors: I wanted to go to the mix detail that you kind of broke out for us a bit more functionally earlier this year on Slide 7. I mean that's 2024. I know we can do some of this with your reported revenues, but we don't have a lot of breakdown on Omni. If we looked at that 70%, 12%, 9%, 9% split you laid out for '24, how would that look different today for kind of where we're exiting '25 as we think about the business and sort of cyclical views into '26?
Jamie Pierson: Yes. We don't, Bascome, to be direct. We picked this as a point in time to show -- give an indication or tip of the hat where we're going to start reporting the business in 2026. So it's more of a lift than you would ever imagine. But this is how we intend to report the business starting next year. But in terms of how that's changed since last year, I wouldn't say meaningfully, but it does change. It changes every single day, but it's a $2.5 billion battleship. So it takes -- it would have to take a seismic change to move these numbers materially.
Bascome Majors: Maybe if I ask it just directionally another way. Within Omni, has the air and ocean side of the business from a profit perspective, outgrown or undergrown the warehousing and value-added piece?
Jamie Pierson: Yes. We don't break out that level of detail. At least today, we don't. You'll see it next year in the level of detail that you want. Right now, we consider all 3 of those still in a single segment. I know you're asking, Bascome, but I'm not going to answer.
Bascome Majors: No, understood. Well, and as we look into next year and kind of think about the business, just directionally from your opportunity to improve the bottom line further versus either cyclical or other risks you want to flag, like what are the 1 or 2 biggest upside potential drivers that you see for EBITDA in the next year and the 1 or 2 biggest risk across the entire portfolio?
Jamie Pierson: You want to go first?
Shawn Stewart: Yes, go ahead.
Jamie Pierson: Yes. So in terms of the biggest upside right now is just operating leverage in the Expedited segment, whether that be in the form of additional volume or price, I don't not going to say that I'm indifferent because I am very different. I'd rather have the price and the volume. But right now, we've got this network at a level that any incremental shipment, just one shipment has a disproportionate positive impact to the bottom line. So I'd say that's going to be just increased density on the Expedited side. And then on the downside, I mean, this is -- I don't want to say that we've been operating in this environment for the last 3 years, but we've been operating in this environment for the last 3 years. If you think about ISM is below 50 for the last 34 out of 36 months. Tonnage in this space is down 21 out of 22 months and Cass is negative for 33 months. That's about 3 years any way you want to slice and dice it. So I think that we are found, at least from my perspective, the bottom. Can it get worse? Absolutely, can always get worse. So I guess the biggest risk would be further macro deterioration. And if that happens or not, Bascome, you know better than I do.
Operator: It appears there are no further questions at this time. Let me turn it over to Mr. Stewart for any final remarks.
Shawn Stewart: All right. Thank you, Angela. Listen, we really appreciate your interest and support. We remain extremely confident in our strategy and look forward to updating you at the next quarterly earnings call. So if you have any questions, please follow up directly with Tony, and we look forward to talking to you soon. Take care.
Operator: This concludes today's Forward Air Third Quarter 2025 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day.