Forward Air Corporation Reports First Quarter 2008 Results
Forward Air Corporation Reports First Quarter 2008 Results
GREENEVILLE, Tenn.--(BUSINESS WIRE)--
Forward Air Corporation (NASDAQ:FWRD) today reported results for the first quarter ended March 31, 2008.
Operating revenue for the quarter ended March 31, 2008 increased 23.6% to $107.9 million from $87.3 million for the same quarter in 2007. Income from operations was $16.7 million, compared with $15.8 million in the prior-year quarter, an increase of 5.1%. As a percent of operating revenue, income from operations declined to 15.5% from 18.1% for the same quarter last year. Net income for the quarter ended March 31, 2008 was $10.0 million, compared with $10.3 million in the prior-year quarter. Net income per diluted share for the first quarter of 2008 was $0.35 compared with $0.34 in the prior-year quarter, an increase of 2.9%.
Bruce Campbell, Chairman, President and CEO, commented, "We were pleased with our performance in the first quarter. Despite the strong economic headwinds and challenging operating environment that persisted throughout the first quarter, we were able to achieve improved year-over-year operating revenue, income from operations and net income per diluted share. These results were made possible by the hard work and dedication of our employees and independent contractors and they have my sincerest gratitude for their efforts."
Commenting further, Mr. Campbell stated: "Also, in mid March, we were able to successfully complete the acquisition of certain assets of Pinch Holdings, Inc. and its related company AFTCO Enterprises, Inc. We were able to quickly tuck-in the Pinch/AFTCO airport-to-airport business component and our Forward Air Solutions team is working diligently to fully integrate their pool distribution business during the second quarter. As we move forward, we will continue to maintain discipline in our core business while also focusing our efforts on our 'Completing the Model' initiative. We believe that this approach will enable us to weather this challenging environment in the near term and properly position us for growth when the environment improves."
In commenting on the second quarter, Rodney L. Bell, Senior Vice President and CFO, said, "We anticipate second quarter year-over-year revenue growth in the 22 to 27% range. Additionally, we expect income per diluted share for the second quarter to be $0.38 to $0.42."
Review of Financial Results
Forward Air will hold a conference call to discuss first quarter 2008 results on Tuesday, April 22, 2008 at 9:00 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
Forward Air is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of terminals located in 83 cities on or near major airports in the United States and Canada. The Company 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 Corporation
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three months ended
------------------------------
March 31, 2008 March 31, 2007
-------------- --------------
(In thousands, except per
share data)
Operating revenue:
Forward Air
Airport-to-airport $ 82,059 $ 74,221
Logistics 12,253 8,184
Other 5,789 4,948
Forward Air Solutions
Pool distribution 7,837 --
-------------- --------------
Total operation revenue 107,938 87,353
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport 31,540 30,532
Logistics 9,180 6,146
Other 1,633 1,296
Forward Air Solutions
Pool distribution 1,172 --
-------------- --------------
Total purchased transportation 43,525 37,974
Salaries, wages and employee
benefits 26,447 19,013
Operating leases 4,851 3,735
Depreciation and amortization 3,698 2,380
Insurance and claims 2,260 1,702
Other operating expenses 10,507 6,710
-------------- --------------
Total operating expenses 91,288 71,514
-------------- --------------
Income from operations 16,650 15,839
Other income (expense):
Interest expense (301) (40)
Other, net 154 753
-------------- --------------
Total other (expense) income (147) 713
-------------- --------------
Income before income taxes 16,503 16,552
Income taxes 6,495 6,259
-------------- --------------
Net income $ 10,008 $ 10,293
============== ==============
Net income per share:
Basic $ 0.35 $ 0.34
============== ==============
Diluted $ 0.35 $ 0.34
============== ==============
Dividends $ 0.07 $ 0.07
============== ==============
Weighted average shares outstanding:
Basic 28,694 30,338
Diluted 28,982 30,665
Forward Air Corporation
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
March 31, December 31,
2008 2007(a)
------------ -------------
Assets
Current assets:
Cash $ 3,235 $ 4,909
Short-term investments 522 522
Accounts receivable, net 64,080 59,734
Other current assets 8,422 6,285
------------ -------------
Total current assets 76,259 71,450
Property and equipment 161,982 158,354
Less accumulated depreciation and
amortization 58,121 55,322
------------ -------------
Total property and equipment, net 103,861 103,032
Goodwill and other acquired intangibles:
Goodwill 53,939 36,053
Other acquired intangibles, net 29,097 29,991
------------ -------------
Total goodwill and other acquired
intangibles 83,036 66,044
Other assets 1,389 1,358
------------ -------------
Total assets $ 264,545 $ 241,884
============ =============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 14,354 $ 11,714
Accrued expenses 12,939 14,274
Current portion of debt and capital lease
obligations 701 830
------------ -------------
Total current liabilities 27,994 26,818
Debt and capital lease obligations, less
current portion 41,359 31,486
Other long-term liabilities 4,605 4,476
Deferred income taxes 8,005 7,371
Shareholders' equity:
Common stock 287 286
Additional paid-in capital 2,855 --
Retained earnings 179,440 171,447
------------ -------------
Total shareholders' equity 182,582 171,733
------------ -------------
Total liabilities and shareholders' equity $ 264,545 $ 241,884
============ =============
(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
-------------------
March 31, March 31,
2008 2007
--------- ---------
Operating activities:
Net income $ 10,008 $ 10,293
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,698 2,380
Share-based compensation 1,535 593
Loss (gain) on sale of property and equipment 16 (62)
Provision for loss (recovery) on receivables 95 (93)
Provision for revenue adjustments 996 655
Deferred income taxes 514 1,797
Tax (benefit) provision for stock options
exercised (725) 7
Changes in operating assets and liabilities
Accounts receivable (5,437) (952)
Prepaid expenses and other current assets 459 (440)
Accounts payable and accrued expenses (317) (3,758)
------- -------
Net cash provided by operating activities 10,842 10,420
Investing activities:
Proceeds from disposal of property and equipment 4 188
Purchases of property and equipment (2,645) (22,570)
Proceeds from sales or maturities of available-
for-sale securities -- 64,095
Purchases of available-for-sale securities -- (44,520)
Acquisition of business (18,526) --
Other (49) (704)
-------- --------
Net cash used in investing activities (21,216) (3,511)
Financing activities:
Payments of debt and capital lease obligations (606) (9)
Borrowings on line of credit 20,000 --
Payments on line of credit (10,000) --
Proceeds from exercise of stock options 956 196
Payments of cash dividends (2,013) (2,127)
Repurchase of common stock -- (7,538)
Cash settlement of share-based awards for minimum
tax withholdings (362) (220)
Tax benefit (provision) for stock options
exercised 725 (7)
-------- --------
Net cash provided by (used in) financing
activities 8,700 (9,705)
-------- --------
Net decrease in cash (1,674) (2,796)
Cash at beginning of period 4,909 8,231
-------- --------
Cash at end of period $ 3,235 $ 5,435
======== ========
Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
Three months ended
--------------------------------------------
March 31, Percent of March 31, Percent of
2008 Revenue 2007 Revenue
---------- ---------- ---------- -----------
Operating Revenue
Forward Air $ 100.1 92.8% $ 87.3 100.0%
FASI 7.8 7.2 - -
---------- ---------- ---------- ----------
Total 107.9 100.0 87.3 100.0
---------- ---------- ---------- ----------
Purchased Transportation
Forward Air 42.3 42.3 38.0 43.5
FASI 1.2 15.4 - -
---------- ---------- ---------- ----------
Total 43.5 40.3 38.0 43.5
---------- ---------- ---------- ----------
Salaries, wages and
employee benefits
Forward Air 22.6 22.6 19.0 21.8
FASI 3.8 48.7 - -
---------- ---------- ---------- ----------
Total 26.4 24.5 19.0 21.8
---------- ---------- ---------- ----------
Operating Leases
Forward Air 4.3 4.3 3.7 4.2
FASI 0.5 6.4 - -
---------- ---------- ---------- ----------
Total 4.8 4.5 3.7 4.2
---------- ---------- ---------- ----------
Depreciation and
Amortization
Forward Air 3.4 3.4 2.4 2.8
FASI 0.3 3.8 - -
---------- ---------- ---------- ----------
Total 3.7 3.4 2.4 2.8
---------- ---------- ---------- ----------
Insurance and claims
Forward Air 1.8 1.8 1.7 1.9
FASI 0.5 6.4 - -
---------- ---------- ---------- ----------
Total 2.3 2.1 1.7 1.9
---------- ---------- ---------- ----------
Other operating expenses
Forward Air 8.7 8.7 6.7 7.7
FASI 1.8 23.1 - -
---------- ---------- ---------- ----------
Total 10.5 9.7 6.7 7.7
---------- ---------- ---------- ----------
Income (loss) from
operations
Forward Air 17.0 16.9 15.8 18.1
FASI (0.3) (3.8) - -
---------- ---------- ---------- ----------
Total $ 16.7 15.5% $ 15.8 18.1%
========== ========== ========== ==========
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.
Source: Forward Air Corporation
Released April 21, 2008