(Source: Business Wire)
Forward Air Corporation (NASDAQ:FWRD) today reported revenue, operating
income, net income and diluted earnings per share for the third quarter
and nine months ended September 30, 2009.
Operating revenue for the quarter ended September 30, 2009 decreased
15.1% to $103.1 million from $121.5 million for the same quarter in
2008. Income from operations was $6.7 million, compared with $19.3
million in the prior-year quarter. As a percent of operating revenue,
income from operations decreased to 6.5% from 15.9% for the same quarter
last year. Net income during the period was $3.8 million compared to
$12.1 million in the prior-year quarter. Income per diluted share from
operations for the third quarter of 2009 was $0.13 compared with $0.42
in the prior-year quarter.
Operating revenue for the nine months ended September 30, 2009 decreased
14.7% to $299.4 million from $351.0 million for the same period in 2008.
Income from operations, which includes a first quarter non-cash, pre-tax
charge of $7.2 million primarily for goodwill impairment related to the
Company's Forward Air Solutions segment, was $6.5 million, compared with
$56.2 million in the prior-year period. Including the impact of the
goodwill impairment, the Company's net income for the nine months ended
September 30, 2009, was $3.5 million, compared with $34.2 million in the
prior-year period. Net income per diluted share for the first nine
months of 2009 was $0.12 compared with $1.18 in the prior-year period.
"It came as no surprise that our results continued to be negatively
impacted in the third quarter as a result of the global economic
recession," said Bruce A. Campbell, Chairman, President and CEO. "The
pricing environment, which began to deteriorate late in the first
quarter, has remained extremely challenging but has shown signs of
stabilization. In key areas of our Forward Air, Inc. business segment we
did have cause for some guarded optimism. The final weeks of the quarter
saw a sequential firming up of our airport-to-airport network tonnage
that has continued thus far into October. Within airport-to-airport our
Forward Air Complete pick-up and delivery offering continued to gain
traction. During the quarter an average of 14.4% of our linehaul
shipments had a pick-up and or delivery attached compared to 9.4% in the
third quarter of 2008. Lastly, our TLX truckload brokerage group which
saw revenue declines in the second quarter appears to have curtailed
that slide with September revenues coming in flat compared to last year."
Commenting further, Mr. Campbell said, "The third quarter proved to be
more challenging than originally anticipated for our Solutions business
segment. After a tremendous amount of work getting the right cost
structure as well as achieving new business wins, the peak retail season
did not occur in September as forecasted by our customers. However, in
the first weeks of October volumes would indicate the beginning of a
somewhat normalized fourth quarter. Again we will monitor this trend
with cautious optimism."
Continuing, Mr. Campbell said, "Every day it seems some expert declares
the recovery has begun. We see signs that are encouraging and we do feel
the worst is over, but now is not the time to let down our guard. Our
people will continue to vigilantly control costs ensuring our rapid
return to the margins and returns that our shareholders have
historically come to expect of Forward Air."
In closing, Mr. Campbell said, "We are pleased to report that for a
second consecutive year and for 10 of the past 11 years Forward Air has
been named by Forbes magazine as one of the "200 Best Small Companies"
in America. Congratulations and thank you to all of the Forward Air
employees and independent contractors who made this honor possible."
Commenting further on the quarter, Rodney L. Bell, Senior Vice President
and CFO, said, "Cash flow from operations was $9.3 million for the
quarter and $30.7 million year-to-date compared to $20.9 and $38.0
respectively for last year. We ended the period with just over $27
million in cash and $39.5 million available on our line of credit. With
the completion of our Dallas facility in July we have no meaningful
capital expenditure needs for the balance of 2009 and anticipate 2010
capital expenditures to be approximately $10 million providing ample
free cash flow and flexibility."
Commenting further, Mr. Bell said, "Assuming current trends remain
stable, for the fourth quarter of 2009, we anticipate a year-over-year
decline in revenue in the range of 10 to 15% and expect income per
diluted share to be between $0.15 and $0.21 per share."
Review of Financial Results
Forward Air will hold a conference call to discuss third quarter 2009
results on Thursday, October 22, 2009 at 10:00 a.m. EDT. The Company's
conference call will be available online at www.forwardair.com
or by dialing 800-841-9385. A replay of the conference call will be
available at www.forwardair.com
beginning shortly after completion of the live call.
About Forward Air Corporation
Forward Air Corporation operates two business segments, Forward Air,
Inc. and Forward Air Solutions, Inc.
Forward Air, Inc. is a high-service-level contractor to the air cargo
industry providing time-definite ground transportation services through
a network of 84 terminals located on or near major airports in the
United States and Canada. It provides these services as a cost-effective
alternative to air transportation of cargo that must be delivered at a
specific time but is relatively less time-sensitive than traditional air
freight or when air transportation is not economical.
Forward Air Solutions, Inc. is a provider of pool distribution services.
Pool distribution involves the consolidation and shipment of several
smaller less-than-truckload shipments to a common area or region. Once
at the regional destination, the loads are deconsolidated, then grouped
with other shipments with common delivery points, and delivered in a
very precise, time-sensitive manner. Our pool distribution network
consists of 19 terminals within the mid-Atlantic, Southeast, Midwest and
Southwestern United States.
Forward Air Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
Operating revenue:
Forward Air
Airport-to-airport $ 66,667 $ 85,901 $ 194,908 $ 257,147
Logistics 13,172 15,597 38,645 42,688
Other 5,596 6,487 16,975 18,464
Forward Air Solutions
Pool distribution 17,644 13,499 48,864 32,685
Total operating revenue 103,079 121,484 299,392 350,984
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport 28,025 33,388 82,008 98,432
Logistics 10,329 11,227 30,127 31,224
Other 1,387 1,764 3,681 4,941
Forward Air Solutions
Pool distribution 3,747 2,505 9,774 5,743
Total purchased transportation 43,488 48,884 125,590 140,340
Salaries, wages and employee benefits 28,591 28,504 86,834 84,355
Operating leases 6,631 6,183 20,440 16,918
Depreciation and amortization 5,006 4,134 14,687 11,830
Insurance and claims 2,045 1,816 6,984 5,690
Fuel expense 1,880 3,052 5,199 8,466
Other operating expenses 8,767 9,583 25,983 27,146
Impairment of goodwill and other intangible assets -- -- 7,157 --
Total operating expenses 96,408 102,156 292,874 294,745
Income from operations 6,671 19,328 6,518 56,239
Other (expense) income:
Interest expense (177 ) (210 ) (469 ) (839 )
Other, net 51 115 50 325
Total other expense (126 ) (95 ) (419 ) (514 )
Income before income taxes 6,545 19,233 6,099 55,725
Income taxes 2,766 7,136 2,581 21,519
Net income $ 3,779 $ 12,097 $ 3,518 $ 34,206
Net income per share:
Basic $ 0.13 $ 0.42 $ 0.12 $ 1.19
Diluted $ 0.13 $ 0.42 $ 0.12 $ 1.18
Weighted average shares outstanding:
Basic 28,942 28,871 28,924 28,782
Diluted 29,026 29,139 28,978 29,067
Dividends per share: $ 0.07 $ 0.07 $ 0.21 $ 0.21
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Forward Air Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
September 30, December 31,
2009 2008 (a)
Assets
Current assets:
Cash $ 27,230 $ 22,093
Accounts receivable, net 52,993 57,206
Other current assets 14,145 12,290
Total current assets 94,368 91,589
Property and equipment 203,383 186,377
Less accumulated depreciation and amortization 72,976 63,401
Total property and equipment, net 130,407 122,976
Goodwill and other acquired intangibles:
Goodwill 43,332 50,230
Other acquired intangibles, net 36,997 40,708
Total goodwill and other acquired intangibles 80,329 90,938
Other assets 1,582 2,024
Total assets $ 306,686 $ 307,527
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 8,509 $ 11,633
Accrued expenses 16,057 12,927
Current portion of debt and capital lease obligations 1,072 1,602
Total current liabilities 25,638 26,162
Long-term debt and capital lease obligations, less current portion 52,404 53,035
Other long-term liabilities 3,749 3,055
Deferred income taxes 6,136 8,841
Shareholders' equity:
Common stock 289 289
Additional paid-in capital 15,139 10,249
Retained earnings 203,331 205,896
Total shareholders' equity 218,759 216,434
Total liabilities and shareholders' equity $ 306,686 $ 307,527
(a) Taken from audited financial statements, which are not presented in their entirety.
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Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended
September 30, September 30,
2009 2008
Operating activities:
Net income $ 3,779 $ 12,097
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 5,006 4,134
Share-based compensation 1,607 1,451
(Gain) loss on sale or disposal of property and equipment (1 ) 15
Provision for loss on receivables 217 131
Provision for revenue adjustments 548 1,369
Deferred income taxes (466 ) (793 )
Tax benefit for stock options exercised (1 ) (69 )
Changes in operating assets and liabilities:
Accounts receivable (3,721 ) 2,209
Prepaid expenses and other current assets 382 439
Accounts payable and accrued expenses 1,962 (116 )
Net cash provided by operating activities 9,312 20,867
Investing activities:
Proceeds from disposal of property and equipment 14 13
Purchases of property and equipment (3,803 ) (7,325 )
Acquisition of businesses -- (10,653 )
Other 49 (74 )
Net cash used in investing activities (3,740 ) (18,039 )
Financing activities:
Payments of debt and capital lease obligations (390 ) (302 )
Borrowings on line of credit -- 15,000
Payments on line of credit -- --
Proceeds from exercise of stock options 8 947
Payments of cash dividends (2,028 ) (2,026 )
Common stock issued under employee stock purchase plan -- --
Cash settlement of share-based awards for minimum tax withholdings (5 ) (7 )
Tax benefit for stock options exercised 1 69
Net cash (used in) provided by financing activities (2,414 ) 13,681
Net increase in cash 3,158 16,509
Cash at beginning of period 24,072 1,082
Cash at end of period $ 27,230 $ 17,591
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Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine months ended
September 30, September 30,
2009 2008
Operating activities:
Net income $ 3,518 $ 34,206
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 14,687 11,830
Impairment of goodwill and other intangible assets 7,157 --
Share-based compensation 5,022 4,571
(Gain) loss on sale or disposal of property and equipment (13 ) 36
Provision for (recovery) loss on receivables (74 ) 245
Provision for revenue adjustments 1,916 3,273
Deferred income taxes (3,009 ) 635
Tax benefit for stock options exercised (1 ) (1,148 )
Changes in operating assets and liabilities:
Accounts receivable 2,370 (16,092 )
Prepaid expenses and other current assets (1,567 ) (1,932 )
Accounts payable and accrued expenses 701 2,398
Net cash provided by operating activities 30,707 38,022
Investing activities:
Proceeds from disposal of property and equipment 231 46
Purchases of property and equipment (18,828 ) (12,680 )
Acquisition of businesses -- (29,299 )
Other 405 (167 )
Net cash used in investing activities (18,192 ) (42,100 )
Financing activities:
Payments of debt and capital lease obligations (1,163 ) (1,172 )
Borrowings on line of credit -- 45,000
Payments on line of credit -- (25,000 )
Proceeds from exercise of stock options 8 3,085
Payments of cash dividends (6,081 ) (6,062 )
Common stock issued under employee stock purchase plan 99 145
Repurchase of common stock (242 ) --
Cash settlement of share-based awards for minimum tax withholdings -- (384 )
Tax benefit for stock options exercised 1 1,148
Net cash (used in) provided by financing activities (7,378 ) 16,760
Net increase in cash 5,137 12,682
Cash at beginning of period 22,093 4,909
Cash at end of period $ 27,230 $ 17,591
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Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
Three months ended
September 30, Percent of September 30, Percent of Percent
2009 Revenue 2008 Revenue Change Change
Operating revenue
Forward Air $ 85.7 83.1 % $ 108.6 89.4 % $ (22.9 ) (21.1 ) %
FASI 17.8 17.3 13.6 11.2 4.2 30.9
Intercompany Eliminations (0.4 ) (0.4 ) (0.7 ) (0.6 ) 0.3 (42.9 )
Total 103.1 100.0 121.5 100.0 (18.4 ) (15.1 )
Purchased transportation
Forward Air 39.8 46.4 46.5 42.8 (6.7 ) (14.4 )
FASI 4.0 22.5 3.1 22.8 0.9 29.0
Intercompany Eliminations (0.3 ) 75.0 (0.7 ) 100.0 0.4 (57.1 )
Total 43.5 42.2 48.9 40.2 (5.4 ) (11.0 )
Salaries, wages and employee benefits
Forward Air 20.6 24.0 23.0 21.2 (2.4 ) (10.4 )
FASI 8.0 44.9 5.5 40.5 2.5 45.5
Total 28.6 27.7 28.5 23.5 0.1 0.4
Operating leases
Forward Air 4.6 5.4 4.7 4.3 (0.1 ) (2.1 )
FASI 2.0 11.2 1.5 11.0 0.5 33.3
Total 6.6 6.4 6.2 5.1 0.4 6.5
Depreciation and amortization
Forward Air 4.1 4.8 3.6 3.3 0.5 13.9
FASI 0.9 5.1 0.5 3.7 0.4 80.0
Total 5.0 4.9 4.1 3.4 0.9 22.0
Insurance and claims
Forward Air 1.6 1.9 1.7 1.6 (0.1 ) (5.9 )
FASI 0.4 2.2 0.1 0.7 0.3 300.0
Total 2.0 1.9 1.8 1.5 0.2 11.1
Fuel expense
Forward Air 0.8 0.9 1.6 1.5 (0.8 ) (50.0 )
FASI 1.1 6.2 1.5 11.0 (0.4 ) (26.7 )
Total 1.9 1.8 3.1 2.5 (1.2 ) (38.7 )
Other operating expenses
Forward Air 7.0 8.2 8.2 7.5 (1.2 ) (14.6 )
FASI 1.9 10.7 1.4 10.3 0.5 35.7
Intercompany Eliminations (0.1 ) 25.0 -- -- (0.1 ) (100.0 )
Total 8.8 8.6 9.6 7.9 (0.8 ) (8.3 )
Income (loss) from operations
Forward Air 7.2 8.4 19.3 17.8 (12.1 ) (62.7 )
FASI (0.5 ) (2.8 ) -- -- (0.5 ) (100.0 )
Total $ 6.7 6.5 % $ 19.3 15.9 % $ (12.6 ) (65.3 ) %
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Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
Nine months ended
September 30, Percent of September 30, Percent of Percent
2009 Revenue 2008 Revenue Change Change
Operating revenue
Forward Air $ 251.2 83.9 % $ 319.8 91.1 % $ (68.6 ) (21.5 ) %
FASI 49.2 16.4 32.8 9.4 16.4 50.0
Intercompany Eliminations (1.0 ) (0.3 ) (1.6 ) (0.5 ) 0.6 (37.5 )
Total 299.4 100.0 351.0 100.0 (51.6 ) (14.7 )
Purchased transportation
Forward Air 116.1 46.2 134.6 42.1 (18.5 ) (13.7 )
FASI 10.4 21.1 7.3 22.3 3.1 42.5
Intercompany Eliminations (0.9 ) 90.0 (1.6 ) 100.0 0.7 (43.8 )
Total 125.6 42.0 140.3 40.0 (14.7 ) (10.5 )
Salaries, wages and employee benefits
Forward Air 63.1 25.1 70.3 22.0 (7.2 ) (10.2 )
FASI 23.7 48.2 14.1 43.0 9.6 68.1
Total 86.8 29.0 84.4 24.1 2.4 2.8
Operating leases
Forward Air 14.1 5.6 13.6 4.2 0.5 3.7
FASI 6.3 12.8 3.3 10.0 3.0 90.9
Total 20.4 6.8 16.9 4.8 3.5 20.7
Depreciation and amortization
Forward Air 12.0 4.8 10.6 3.3 1.4 13.2
FASI 2.7 5.5 1.2 3.6 1.5 125.0
Total 14.7 4.9 11.8 3.4 2.9 24.6
Insurance and claims
Forward Air 5.6 2.2 5.1 1.6 0.5 9.8
FASI 1.4 2.8 0.6 1.8 0.8 133.3
Total 7.0 2.3 5.7 1.6 1.3 22.8
Fuel expense
Forward Air 2.3 0.9 4.8 1.5 (2.5 ) (52.1 )
FASI 2.9 5.9 3.7 11.3 (0.8 ) (21.6 )
Total 5.2 1.7 8.5 2.4 (3.3 ) (38.8 )
Other operating expenses
Forward Air 21.0 8.4 23.7 7.4 (2.7 ) (11.4 )
FASI 5.1 10.4 3.5 10.7 1.6 45.7
Intercompany Eliminations (0.1 ) 10.0 -- -- (0.1 ) (100.0 )
Total 26.0 8.7 27.2 7.7 (1.2 ) (4.4 )
Impairment of goodwill and other intangible assets
Forward Air 0.2 0.1 -- -- 0.2 100.0
FASI 7.0 14.2 -- -- 7.0 100.0
Total 7.2 2.4 -- -- 7.2 100.0
Income (loss) from operations
Forward Air 16.8 6.7 57.1 17.9 (40.3 ) (70.6 )
FASI (10.3 ) (20.9 ) (0.9 ) (2.7 ) (9.4 ) 1,044.4
Total $ 6.5 2.2 % $ 56.2 16.0 % $ (49.7 ) (88.4 ) %
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Forward Air Corporation
Forward Air Inc. Operating Statistics
Three months ended Nine months ended
September 30, September 30, Percent September 30, September 30, Percent
2009 2008 Change 2009 2008 Change
Operating ratio 91.6 % 82.2 % (11.4 ) % 93.3 % 82.1 % (13.6 ) %
Business days 64.0 64.0 -- 191.0 192.0 (0.5 )
Business weeks 12.8 12.8 -- 38.2 38.4 (0.5 )
Airport-to-airport:
Tonnage
Total pounds? 357,768 441,269 (18.9 ) 1,054,048 1,336,801 (21.2 )
Average weekly pounds? 27,951 34,474 (18.9 ) 27,593 34,813 (20.7 )
Linehaul shipments
Total linehaul 511,959 568,031 (9.9 ) 1,529,233 1,746,828 (12.5 )
Average weekly 39,997 44,377 (9.9 ) 40,032 45,490 (12.0 )
Forward Air Complete shipments 73,696 53,161 38.6 194,694 145,452 33.9
As a percentage of linehaul shipments 14.4 % 9.4 % 53.8 12.7 % 8.3 % 53.0
Average linehaul shipment size 699 777 (10.0 ) 689 765 (9.9 )
Revenue per pound?
Linehaul yield 15.91 16.39 (2.4 ) 16.14 16.56 (2.2 )
Fuel surcharge impact 0.93 2.15 (6.2 ) 0.79 1.81 (5.3 )
Forward Air Complete impact 1.83 1.17 3.3 1.60 0.95 3.4
Total airport-to-airport yield 18.67 19.71 (5.3 ) 18.53 19.32 (4.1 )
Logistics:
Miles
Owner operator? 6,111 4,812 27.0 17,916 13,432 33.4
Third party? 2,288 3,618 (36.8 ) 6,709 11,055 (39.3 )
Total Miles 8,399 8,430 (0.4 ) 24,625 24,487 0.6
Revenue per mile $ 1.58 $ 1.80 (12.2 ) $ 1.58 $ 1.74 (9.2 )
Cost per mile $ 1.23 $ 1.33 (7.5 ) % $ 1.22 $ 1.25 (2.4 ) %
? - In thousands
? - In cents per pound; percentage change is expressed as a percent of total yield.
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Important Information
This press release contains "forward-looking statements," as defined in
Section27A of the Securities Act of 1933, as amended, and Section21E
of the Securities Exchange Act of 1934, as amended. Forward-looking
statements are statements other than historical information or
statements of current condition and relate to future events or our
future financial performance. Some forward-looking statements may be
identified by use of such terms as "believes," "anticipates," "intends,"
"plans," "estimates," "projects" or "expects." Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
The following is a list of factors, among others, that could cause
actual results to differ materially from those contemplated by the
forward-looking statements: economic factors such as recessions,
inflation, higher interest rates and downturns in customer business
cycles, our inability to maintain our historical growth rate because of
a decreased volume of freight moving through our network or decreased
average revenue per pound of freight moving through our network,
increasing competition and pricing pressure, surplus inventories, loss
of a major customer, the creditworthiness of our customers and their
ability to pay for services rendered, our ability to secure terminal
facilities in desirable locations at reasonable rates, the inability of
our information systems to handle an increased volume of freight moving
through our network, changes in fuel prices, claims for property damage,
personal injuries or workers' compensation, employment matters including
rising health care costs, enforcement of and changes in governmental
regulations, environmental and tax matters, the handling of hazardous
materials, the availability and compensation of qualified independent
owner-operators and freight handlers needed to serve our transportation
needs and our inability to successfully integrate acquisitions. As a
result of the foregoing, no assurance can be given as to future
financial condition, cash flows or results of operations. We undertake
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
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