Forward Air Corporation Reports First Quarter 2012 Results
Forward Air Corporation Reports First Quarter 2012 Results
GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ:FWRD) today reported revenue, operating income, net income and diluted earnings per share for the three months ended March 31, 2012.
Operating revenue for the quarter ended March 31, 2012 increased 14.1% to $137.1 million from $120.2 million for the same quarter in 2011. Income from operations was $16.8 million, compared with $13.3 million in the prior-year quarter. As a percent of operating revenue, income from operations increased to 12.3% from 11.1% for the same quarter last year. Net income during the period increased to $10.3 million from $7.9 million in the prior-year quarter. Income per diluted share for the first quarter of 2012 was $0.35 compared with $0.27 in the prior-year quarter.
Bruce A. Campbell, Chairman, President, and CEO, commenting on the first quarter said, “Our team delivered another solid operating performance achieving top line growth of 14% and impressive operating income and earnings growth of 26.3% and 29.6%, respectively.”
Commenting further, Mr. Campbell said, “Within our Forward Air, Inc. business segment, we continued to experience strong demand for our airport-to-airport service offering which was nicely complemented by considerable revenue growth from both our Logistics group, as well as, from our Forward Air Complete pick-up and delivery product. In the first quarter, Logistics revenue grew over 29% while Complete revenues grew nearly 31% as we achieved a record 19.4% attachment rate to our linehaul shipments.”
Turning to the Forward Air Solutions business segment, Mr. Campbell said, “Solutions showed year-over-year improvement and generated a small profit in March. As we exit the historically most challenging quarter for this service offering, we anticipate continued improvement in our year-over-year results as a number of key initiatives, begun in the first quarter, are completed and fully implemented.”
In closing, Mr. Campbell said, “As always, I would like to thank the Forward Air team of employees and independent contractors for their dedication and hard work. Without them, these results would not have been possible.”
Commenting on the Company’s guidance for the second quarter, Rodney L. Bell, Senior Vice President and CFO said, “We anticipate that our second quarter 2012 revenues will increase in the range of 8% to 12% over the comparable 2011 period, and we expect income per diluted share to be between $0.43 and $0.47 per share. This compares to $0.40 per share in the second quarter of 2011.”
Review of Financial Results
Forward Air will hold a conference call to discuss first quarter 2012 results on Friday, April 20, 2012 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800-230-1951. A replay of the conference call will be available at www.forwardair.com beginning shortly after the 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 terminals located on or near major airports in 85 cities 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 terminals and service locations in 20 cities within the Mid-Atlantic, Southeast, Midwest and Southwestern United States.
| Forward Air Corporation | ||||||||||
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Consolidated Statements of Comprehensive Income |
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| (In thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| Three months ended | ||||||||||
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March 31, |
March 31, |
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| Operating revenue: | ||||||||||
| Forward Air | ||||||||||
| Airport-to-airport | $ | 90,627 | $ | 82,147 | ||||||
| Logistics | 21,313 | 16,494 | ||||||||
| Other | 6,202 | 6,403 | ||||||||
| Forward Air Solutions | ||||||||||
| Pool distribution | 18,939 | 15,157 | ||||||||
| Total operating revenue | 137,081 | 120,201 | ||||||||
| Operating expenses: | ||||||||||
| Purchased transportation | ||||||||||
| Forward Air | ||||||||||
| Airport-to-airport | 36,758 | 32,593 | ||||||||
| Logistics | 15,716 | 12,799 | ||||||||
| Other | 1,598 | 1,473 | ||||||||
| Forward Air Solutions | ||||||||||
| Pool distribution | 5,126 | 3,457 | ||||||||
| Total purchased transportation | 59,198 | 50,322 | ||||||||
| Salaries, wages and employee benefits | 33,174 | 30,495 | ||||||||
| Operating leases | 7,106 | 6,706 | ||||||||
| Depreciation and amortization | 5,121 | 5,082 | ||||||||
| Insurance and claims | 2,798 | 2,175 | ||||||||
| Fuel expense | 2,541 | 2,388 | ||||||||
| Other operating expenses | 10,354 | 9,747 | ||||||||
| Total operating expenses | 120,292 | 106,915 | ||||||||
| Income from operations | 16,789 | 13,286 | ||||||||
| Other income (expense): | ||||||||||
| Interest expense | (51 | ) | (195 | ) | ||||||
| Other, net | 17 | 16 | ||||||||
| Total other expense | (34 | ) | (179 | ) | ||||||
| Income before income taxes | 16,755 | 13,107 | ||||||||
| Income taxes | 6,482 | 5,238 | ||||||||
| Net income and comprehensive income | $ | 10,273 | $ | 7,869 | ||||||
| Net income per share: | ||||||||||
| Basic | $ | 0.36 | $ | 0.27 | ||||||
| Diluted | $ | 0.35 | $ | 0.27 | ||||||
| Weighted average shares outstanding: | ||||||||||
| Basic | 28,692 | 29,135 | ||||||||
| Diluted | 29,363 | 29,371 | ||||||||
| Dividends per share: | $ | 0.07 | $ | 0.07 | ||||||
| Forward Air Corporation | ||||||||
| Consolidated Balance Sheets | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
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March 31, |
December 31, |
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| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 69,397 | $ | 58,801 | ||||
| Accounts receivable, net | 75,376 | 70,922 | ||||||
| Other current assets | 10,669 | 9,994 | ||||||
| Total current assets | 155,442 | 139,717 | ||||||
| Property and equipment | 235,138 | 223,135 | ||||||
| Less accumulated depreciation and amortization | 96,531 | 93,267 | ||||||
| Net property and equipment | 138,607 | 129,868 | ||||||
| Goodwill and other acquired intangibles: | ||||||||
| Goodwill | 43,332 | 43,332 | ||||||
| Other acquired intangibles, net of accumulated amortization | 25,521 | 26,668 | ||||||
| Total net goodwill and other acquired intangibles | 68,853 | 70,000 | ||||||
| Other assets | 1,858 | 1,566 | ||||||
| Total assets | $ | 364,760 | $ | 341,151 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 16,563 | $ | 12,392 | ||||
| Accrued expenses | 23,163 | 20,986 | ||||||
| Current portion of debt and capital lease obligations | 521 | 552 | ||||||
| Total current liabilities | 40,247 | 33,930 | ||||||
| Debt and capital lease obligations, less current portion | 228 | 333 | ||||||
| Other long-term liabilities | 9,470 | 8,860 | ||||||
| Deferred income taxes | 10,058 | 11,126 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock | 289 | 285 | ||||||
| Additional paid-in capital | 52,212 | 42,212 | ||||||
| Retained earnings | 252,256 | 244,405 | ||||||
| Total shareholders’ equity | 304,757 | 286,902 | ||||||
| Total liabilities and shareholders’ equity | $ | 364,760 | $ | 341,151 | ||||
| (a) Taken from audited financial statements, which are not presented in their entirety. | ||||||||
| Forward Air Corporation | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three months ended | ||||||||||
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March 31, |
March 31, |
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| Operating activities: | ||||||||||
| Net income | $ | 10,273 | $ | 7,869 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||
| Depreciation and amortization | 5,121 | 5,082 | ||||||||
| Share-based compensation | 1,606 | 1,443 | ||||||||
| Loss on disposal of property and equipment | 196 | 21 | ||||||||
| Provision for loss (recovery) on receivables | 110 | (50 | ) | |||||||
| Provision for revenue adjustments | 427 | 484 | ||||||||
| Deferred income taxes | (804 | ) | 20 | |||||||
| Tax benefit for stock options exercised | (204 | ) | (88 | ) | ||||||
| Changes in operating assets and liabilities | ||||||||||
| Accounts receivable | (2,491 | ) | (6,058 | ) | ||||||
| Prepaid expenses and other current assets | (925 | ) | (881 | ) | ||||||
| Accounts payable and accrued expenses | 4,646 | 7,377 | ||||||||
| Net cash provided by operating activities | 17,955 | 15,219 | ||||||||
| Investing activities: | ||||||||||
| Proceeds from disposal of property and equipment | 205 | 279 | ||||||||
| Purchases of property and equipment | (13,098 | ) | (7,329 | ) | ||||||
| Other | (306 | ) | 308 | |||||||
| Net cash used in investing activities | (13,199 | ) | (6,742 | ) | ||||||
| Financing activities: | ||||||||||
| Payments of debt and capital lease obligations | (136 | ) | (171 | ) | ||||||
| Proceeds from exercise of stock options | 8,192 | 4,838 | ||||||||
| Payments of cash dividends | (2,034 | ) | (2,055 | ) | ||||||
| Cash settlement of share-based awards for minimum tax withholdings | (386 | ) | — | |||||||
| Tax benefit for stock options exercised | 204 | 88 | ||||||||
| Net cash provided by financing activities | 5,840 | 2,700 | ||||||||
| Net increase in cash | 10,596 | 11,177 | ||||||||
| Cash at beginning of period | 58,801 | 74,504 | ||||||||
| Cash at end of period | $ | 69,397 | $ | 85,681 | ||||||
| Forward Air Corporation | |||||||||||||||||||||||||||
| Segment Information | |||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||
| March 31, | Percent of | March 31, | Percent of | Percent | |||||||||||||||||||||||
| 2012 | Revenue | 2011 | Revenue | Change | Change | ||||||||||||||||||||||
| Operating revenue | |||||||||||||||||||||||||||
| Forward Air | $ | 118.4 | 86.4 | % | $ | 105.2 | 87.5 | % | $ | 13.2 | 12.5 | % | |||||||||||||||
| FASI | 19.2 | 14.0 | 15.2 | 12.6 | 4.0 | 26.3 | |||||||||||||||||||||
| Intercompany eliminations | (0.5 | ) | (0.4 | ) | (0.2 | ) | (0.1 | ) | (0.3 | ) | 150.0 | ||||||||||||||||
| Total | 137.1 | 100.0 | 120.2 | 100.0 | 16.9 | 14.1 | |||||||||||||||||||||
| Purchased transportation | |||||||||||||||||||||||||||
| Forward Air | 54.3 | 45.9 | 46.9 | 44.6 | 7.4 | 15.8 | |||||||||||||||||||||
| FASI | 5.3 | 27.6 | 3.6 | 23.7 | 1.7 | 47.2 | |||||||||||||||||||||
| Intercompany eliminations | (0.4 | ) | 80.0 | (0.2 | ) | 100.0 | (0.2 | ) | 100.0 | ||||||||||||||||||
| Total | 59.2 | 43.2 | 50.3 | 41.8 | 8.9 | 17.7 | |||||||||||||||||||||
| Salaries, wages and employee benefits | |||||||||||||||||||||||||||
| Forward Air | 25.7 | 21.7 | 23.9 | 22.7 | 1.8 | 7.5 | |||||||||||||||||||||
| FASI | 7.5 | 39.1 | 6.6 | 43.4 | 0.9 | 13.6 | |||||||||||||||||||||
| Total | 33.2 | 24.2 | 30.5 | 25.4 | 2.7 | 8.9 | |||||||||||||||||||||
| Operating leases | |||||||||||||||||||||||||||
| Forward Air | 5.1 | 4.3 | 4.9 | 4.7 | 0.2 | 4.1 | |||||||||||||||||||||
| FASI | 2.0 | 10.4 | 1.8 | 11.8 | 0.2 | 11.1 | |||||||||||||||||||||
| Total | 7.1 | 5.2 | 6.7 | 5.6 | 0.4 | 6.0 | |||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||
| Forward Air | 4.0 | 3.4 | 4.1 | 3.9 | (0.1 | ) | (2.4 | ) | |||||||||||||||||||
| FASI | 1.1 | 5.7 | 1.0 | 6.6 | 0.1 | 10.0 | |||||||||||||||||||||
| Total | 5.1 | 3.7 | 5.1 | 4.2 | — | — | |||||||||||||||||||||
| Insurance and claims | |||||||||||||||||||||||||||
| Forward Air | 2.1 | 1.8 | 1.6 | 1.5 | 0.5 | 31.3 | |||||||||||||||||||||
| FASI | 0.7 | 3.6 | 0.6 | 3.9 | 0.1 | 16.7 | |||||||||||||||||||||
| Total | 2.8 | 2.0 | 2.2 | 1.8 | 0.6 | 27.3 | |||||||||||||||||||||
| Fuel expense | |||||||||||||||||||||||||||
| Forward Air | 1.1 | 0.9 | 1.1 | 1.0 | — | — | |||||||||||||||||||||
| FASI | 1.4 | 7.3 | 1.3 | 8.6 | 0.1 | 7.7 | |||||||||||||||||||||
| Total | 2.5 | 1.8 | 2.4 | 2.0 | 0.1 | 4.2 | |||||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||||||
| Forward Air | 8.7 | 7.3 | 8.4 | 8.0 | 0.3 | 3.6 | |||||||||||||||||||||
| FASI | 1.8 | 9.4 | 1.3 | 8.6 | 0.5 | 38.5 | |||||||||||||||||||||
| Intercompany eliminations | (0.1 | ) | 20.0 | — | — | (0.1 | ) | (100.0 | ) | ||||||||||||||||||
| Total | 10.4 | 7.6 | 9.7 | 8.1 | 0.7 | 7.2 | |||||||||||||||||||||
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Income (loss) from operations |
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| Forward Air | 17.4 | 14.7 | 14.3 | 13.6 | 3.1 | 21.7 | |||||||||||||||||||||
| FASI | (0.6 | ) | (3.1 | ) | (1.0 | ) | (6.6 | ) | 0.4 | (40.0 | ) | ||||||||||||||||
| Total | $ | 16.8 | 12.3 | % | $ | 13.3 | 11.1 | % | $ | 3.5 | 26.3 | % | |||||||||||||||
| Forward Air Corporation | ||||||||||||||
| Forward Air Inc. Operating Statistics | ||||||||||||||
| Three months ended | ||||||||||||||
| March 31, | March 31, | Percent | ||||||||||||
| 2012 | 2011 | Change | ||||||||||||
| Operating ratio | 85.3 | % | 86.4 | % | (1.3 | )% | ||||||||
| Business days | 64.0 | 64.0 | — | |||||||||||
| Business weeks | 12.8 | 12.8 | — | |||||||||||
| Airport-to-airport: | ||||||||||||||
| Tonnage | ||||||||||||||
| Total pounds ¹ | 422,139 | 400,558 | 5.4 | |||||||||||
| Average weekly pounds ¹ | 32,980 | 31,294 | 5.4 | |||||||||||
| Linehaul shipments | ||||||||||||||
| Total linehaul | 637,438 | 572,456 | 11.4 | |||||||||||
| Average weekly | 49,800 | 44,723 | 11.4 | |||||||||||
| Forward Air Complete shipments | 123,366 | 83,006 | 48.6 | |||||||||||
| As a percentage of linehaul shipments | 19.4 | % | 14.5 | % | 33.8 | |||||||||
| Average linehaul shipment size | 662 | 700 | (5.4 | ) | ||||||||||
| Revenue per pound ² | ||||||||||||||
| Linehaul yield | $ | 16.89 | $ | 16.69 | 1.0 | |||||||||
| Fuel surcharge impact | 1.91 | 1.66 | 1.2 | |||||||||||
| Forward Air Complete impact | 2.70 | 2.18 | 2.5 | |||||||||||
| Total airport-to-airport yield | $ | 21.50 | $ | 20.53 | 4.7 | |||||||||
| Logistics: | ||||||||||||||
| Miles | ||||||||||||||
| Owner operator ¹ | 8,920 | 6,980 | 27.8 | |||||||||||
| Third party ¹ | 3,687 | 3,259 | 13.1 | |||||||||||
| Total Miles | 12,607 | 10,239 | 23.1 | |||||||||||
| Revenue per mile | $ | 1.69 | $ | 1.62 | 4.3 | |||||||||
| Cost per mile | $ | 1.25 | $ | 1.25 | — | % | ||||||||
| ¹ - In thousands | ||||||||||||||
| ² - In cents per pound; percentage change is expressed as a percent of total yield. | ||||||||||||||
Important Information
This press release 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. 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.
Forward Air Corporation
Rodney L. Bell, 423-636-7000
rbell@forwardair.com
Source: Forward Air Corporation
Released April 19, 2012