Forward Air Corporation Reports Third Quarter 2014 Results and Announces Quarterly Cash Dividend
Forward Air Corporation Reports Third Quarter 2014 Results and Announces Quarterly Cash Dividend
GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ:FWRD) today reported operating revenue, income from operations, net income and diluted earnings per share for the three and nine months ended September 30, 2014.
Operating revenue for the quarter ended September 30, 2014 increased 18.5% to $201.5 million from $170.0 million for the same quarter in 2013. Income from operations was $26.9 million, compared with $22.9 million in the prior-year quarter. As a percent of operating revenue, income from operations was 13.3%, compared with 13.5% in the same quarter last year. Net income during the period was $16.7 million compared to $14.2 million in the prior-year quarter. Net income per diluted share for the third quarter of 2014 was $0.54 compared with $0.46 in the prior-year quarter.
Operating revenue for the nine months ended September 30, 2014 increased 20.3% to $566.9 million from $471.4 million for the same period in 2013. Income from operations was $70.8 million, compared with $61.1 million in the prior-year period. As a percent of operating revenue, income from operations was 12.5%, compared with 13.0% in the same period last year. Net income during the period was $44.1 million compared to $38.9 million in the prior-year period. Net income per diluted share for the nine months ended September 30, 2014 was $1.41 compared with $1.27 in the prior-year period.
Bruce A. Campbell, Chairman, President, and CEO, commenting on the third quarter said, “We were pleased with our revenue and operating income performance across all of our business segments especially in light of the challenging capacity environment and its impact on our cost structure.”
Commenting on the Forward Air, Inc. (“FAI”) business segment, Mr. Campbell said, “FAI revenue continues to benefit from the acquisition of Central States Trucking Company (‘CST’) along with strong year-over-year growth in our tonnage volumes and improving airport-to-airport pricing. These positive trends were partially offset by higher purchased transportation and recruiting costs resulting from our efforts to grow our fleet to keep pace with our increased shipping activity. CST contributed approximately $21.1 million of revenue and $2.5 million of operating income during the third quarter of 2014.”
Commenting on the Forward Air Solutions (“Solutions”) segment, Mr. Campbell said, “Solutions continues to show significant improvement in operating income driven primarily by the general rate increases initiated in the first quarter and excellent operating discipline. Compared to the prior-year quarter results, Solutions operating results improved over $0.4 million, or 50.0% incremental profitability.”
Addressing the Total Quality, Inc. (“TQI”) business segment, Mr. Campbell said, “Despite a lack of revenue growth, we continue to experience improvement in operating income as a percentage of revenue as a result of operating efficiencies initiated during 2014.”
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.”
Commenting on the Company’s guidance for the fourth quarter, Rodney L. Bell, Senior Vice President and CFO said, “We anticipate that our fourth quarter 2014 revenues will increase in the range of 18% to 22% over the comparable 2013 period. We expect income per diluted share to be between $0.60 and $0.66 per share. This compares to $0.50 per share in the fourth quarter of 2013.”
On October 23, 2014, our Board of Directors declared a quarterly cash dividend of $0.12 per share of common stock. The dividend is payable to shareholders of record at the close of business on November 21, 2014, and is expected to be paid on December 8, 2014.
This quarterly dividend is pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.48 per share of common stock, payable in quarterly increments of $0.12 per share of common stock. The actual declaration of future cash dividends, and the establishment of record and payment dates, is subject to final determination by the Board of Directors each quarter after its review of the Company’s financial performance.
Review of Financial Results
Forward Air will hold a conference call to discuss third quarter 2014 results on Friday, October 24, 2014 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800-230-1092. 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 three business segments, Forward Air, Inc., Forward Air Solutions, Inc. and Total Quality, Inc.
Forward Air, Inc. is a leading provider of time-definite surface transportation and related logistics services to the North American expedited ground freight market. We offer our customers local pick-up and delivery (Forward Air CompleteSM) and scheduled surface transportation of cargo as a cost-effective, reliable alternative to air transportation. We transport 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. We also offer our customers an array of logistics and other services including: expedited full truckload (TLX); intermodal/drayage (Central States Trucking Co.); dedicated fleets; warehousing; customs brokerage; and shipment consolidation, deconsolidation and handling.
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 24 terminals within the mid-Atlantic, Southeast, Midwest and Southwestern United States.
Total Quality, Inc. utilizes industry-leading temperature-controlled equipment, 24-hour monitoring and tracking technology and layered security features to provide our customers with the highest level of service. In addition to our core pharmaceutical services, we provide brokerage transportation services. Headquartered in central Michigan, we service the United States, Canada and Mexico.
| Forward Air Corporation | ||||||||||||||||||||
| Consolidated Statements of Comprehensive Income | ||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
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September 30, 2014 |
September 30, 2013 |
September 30, 2014 |
September 30, 2013 |
|||||||||||||||||
| Operating revenue | $ | 201,477 | $ | 170,033 | $ | 566,897 | $ | 471,396 | ||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Purchased transportation | 85,874 | 75,211 | 242,259 | 206,462 | ||||||||||||||||
| Salaries, wages and employee benefits | 45,651 | 39,165 | 131,464 | 109,149 | ||||||||||||||||
| Operating leases | 8,503 | 6,991 | 25,019 | 20,923 | ||||||||||||||||
| Depreciation and amortization | 8,115 | 6,220 | 22,879 | 17,377 | ||||||||||||||||
| Insurance and claims | 3,747 | 3,290 | 10,978 | 9,164 | ||||||||||||||||
| Fuel expense | 5,012 | 3,871 | 14,990 | 10,535 | ||||||||||||||||
| Other operating expenses | 17,669 | 12,428 | 48,537 | 36,634 | ||||||||||||||||
| Total operating expenses | 174,571 | 147,176 | 496,126 | 410,244 | ||||||||||||||||
| Income from operations | 26,906 | 22,857 | 70,771 | 61,152 | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | (172 | ) | (145 | ) | (355 | ) | (401 | ) | ||||||||||||
| Other, net | (55 | ) | 27 | 144 | 72 | |||||||||||||||
| Total other income (expense) | (227 | ) | (118 | ) | (211 | ) | (329 | ) | ||||||||||||
| Income before income taxes | 26,679 | 22,739 | 70,560 | 60,823 | ||||||||||||||||
| Income taxes | 9,935 | 8,542 | 26,437 | 21,941 | ||||||||||||||||
| Net income and comprehensive income | $ | 16,744 | $ | 14,197 | $ | 44,123 | $ | 38,882 | ||||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 0.55 | $ | 0.47 | $ | 1.44 | $ | 1.30 | ||||||||||||
| Diluted | $ | 0.54 | $ | 0.46 | $ | 1.41 | $ | 1.27 | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 30,415 | 30,374 | 30,710 | 30,017 | ||||||||||||||||
| Diluted | 30,932 | 30,986 | 31,234 | 30,677 | ||||||||||||||||
| Dividends per share: | $ | 0.12 | $ | 0.10 | $ | 0.36 | $ | 0.30 | ||||||||||||
| Forward Air Corporation | |||||||||||||||||||||||||||
| Components of Consolidated Revenue and Purchased Transportation | |||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||
| September 30, | Percent of | September 30, | Percent of | Percent | |||||||||||||||||||||||
| 2014 | Revenue | 2013 | Revenue | Change | Change | ||||||||||||||||||||||
| Operating Revenue | |||||||||||||||||||||||||||
| Forward Air | |||||||||||||||||||||||||||
| Airport-to-airport | $ | 111,429 | 69.6 | % | $ | 101,238 | 78.6 | % | $ | 10,191 | 10.1 | % | |||||||||||||||
| Logistics services | |||||||||||||||||||||||||||
| Expedited full truckload - TLX | 19,955 | 12.5 | 19,138 | 14.9 | 817 | 4.3 | |||||||||||||||||||||
| Intermodal/drayage | 15,799 | 9.9 | 1,090 | 0.8 | 14,709 | 1,349.4 | |||||||||||||||||||||
| Total Logistics services | 35,754 | 22.4 | 20,228 | 15.7 | 15,526 | 76.8 | |||||||||||||||||||||
| Other Forward Air services | 12,902 | 8.0 | 7,325 | 5.7 | 5,577 | 76.1 | |||||||||||||||||||||
| Forward Air - Total revenue | 160,085 | 79.4 | 128,791 | 75.8 | 31,294 | 24.3 | |||||||||||||||||||||
| TQI - Pharmaceutical services | 12,029 | 6.0 | 12,431 | 7.3 | (402 | ) | (3.2 | ) | |||||||||||||||||||
| Forward Air Solutions - Pool distribution | 30,615 | 15.2 | 29,827 | 17.5 | 788 | 2.6 | |||||||||||||||||||||
| Intersegment eliminations | (1,252 | ) | (0.6 | ) | (1,016 | ) | (0.6 | ) | (236 | ) | 23.2 | ||||||||||||||||
| Consolidated operating revenue | $ | 201,477 | 100.0 | % | $ | 170,033 | 100.0 | % | $ | 31,444 | 18.5 | % | |||||||||||||||
| Three months ended | |||||||||||||||||||||||||||
| September 30, | Percent of | September 30, | Percent of | Percent | |||||||||||||||||||||||
| 2014 | Revenue | 2013 | Revenue | Change | Change | ||||||||||||||||||||||
| Purchased Transportation | |||||||||||||||||||||||||||
| Forward Air | |||||||||||||||||||||||||||
| Airport-to-airport | $ | 47,720 | 42.8 | % | $ | 42,542 | 42.0 | % | $ | 5,178 | 12.2 | % | |||||||||||||||
| Logistics services | |||||||||||||||||||||||||||
| Expedited full truckload - TLX | 15,048 | 75.4 | 14,545 | 76.0 | 503 | 3.5 | |||||||||||||||||||||
| Intermodal/drayage | 5,966 | 37.8 | 708 | 65.0 | 5,258 | 742.7 | |||||||||||||||||||||
| Total Logistics services | 21,014 | 58.8 | 15,253 | 75.4 | 5,761 | 37.8 | |||||||||||||||||||||
| Other Forward Air services | 3,191 | 24.7 | 2,116 | 28.9 | 1,075 | 50.8 | |||||||||||||||||||||
| Forward Air - Total purchased transportation | 71,925 | 44.9 | 59,911 | 46.5 | 12,014 | 20.1 | |||||||||||||||||||||
| TQI - Pharmaceutical services | 6,018 | 50.0 | 6,921 | 55.7 | (903 | ) | (13.0 | ) | |||||||||||||||||||
| Forward Air Solutions - Pool distribution | 8,767 | 28.6 | 9,094 | 30.5 | (327 | ) | (3.6 | ) | |||||||||||||||||||
| Intersegment eliminations | (836 | ) | 66.8 | (715 | ) | 70.4 | (121 | ) | 16.9 | ||||||||||||||||||
| Consolidated purchased transportation | $ | 85,874 | 42.6 | % | $ | 75,211 | 44.2 | % | $ | 10,663 | 14.2 | % | |||||||||||||||
| Forward Air Corporation | |||||||||||||||||||||||||||
| Components of Consolidated Revenue and Purchased Transportation | |||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Nine months ended | |||||||||||||||||||||||||||
| September 30, | Percent of | September 30, | Percent of | Percent | |||||||||||||||||||||||
| 2014 | Revenue | 2013 | Revenue | Change | Change | ||||||||||||||||||||||
| Operating Revenue | |||||||||||||||||||||||||||
| Forward Air | |||||||||||||||||||||||||||
| Airport-to-airport | $ | 317,147 | 70.7 | % | $ | 289,163 | 78.4 | % | $ | 27,984 | 9.7 | % | |||||||||||||||
| Logistics services | |||||||||||||||||||||||||||
| Expedited full truckload - TLX | 56,582 | 12.6 | 55,219 | 15.0 | 1,363 | 2.5 | |||||||||||||||||||||
| Intermodal/drayage | 39,146 | 8.7 | 3,801 | 1.0 | 35,345 | 929.9 | |||||||||||||||||||||
| Total Logistics services | 95,728 | 21.3 | 59,020 | 16.0 | 36,708 | 62.2 | |||||||||||||||||||||
| Other Forward Air services | 35,663 | 8.0 | 20,797 | 5.6 | 14,866 | 71.5 | |||||||||||||||||||||
| Forward Air - Total revenue | 448,538 | 79.1 | 368,980 | 78.3 | 79,558 | 21.6 | |||||||||||||||||||||
| TQI - Pharmaceutical services | 36,771 | 6.5 | 28,545 | 6.1 | 8,226 | 28.8 | |||||||||||||||||||||
| Forward Air Solutions - Pool distribution | 84,872 | 15.0 | 76,381 | 16.1 | 8,491 | 11.1 | |||||||||||||||||||||
| Intersegment eliminations | (3,284 | ) | (0.6 | ) | (2,510 | ) | (0.5 | ) | (774 | ) | 30.8 | ||||||||||||||||
| Consolidated operating revenue | $ | 566,897 | 100.0 | % | $ | 471,396 | 100.0 | % | $ | 95,501 | 20.3 | % | |||||||||||||||
| Nine months ended | |||||||||||||||||||||||||||
| September 30, | Percent of | September 30, | Percent of | Percent | |||||||||||||||||||||||
| 2014 | Revenue | 2013 | Revenue | Change | Change | ||||||||||||||||||||||
| Purchased Transportation | |||||||||||||||||||||||||||
| Forward Air | |||||||||||||||||||||||||||
| Airport-to-airport | $ | 133,245 | 42.0 | % | $ | 119,007 | 41.2 | % | $ | 14,238 | 12.0 | % | |||||||||||||||
| Logistics services | |||||||||||||||||||||||||||
| Expedited full truckload - TLX | 43,419 | 76.7 | 41,579 | 75.3 | 1,840 | 4.4 | |||||||||||||||||||||
| Intermodal/drayage | 15,859 | 40.5 | 2,328 | 61.2 | 13,531 | 581.2 | |||||||||||||||||||||
| Total Logistics services | 59,278 | 61.9 | 43,907 | 74.4 | 15,371 | 35.0 | |||||||||||||||||||||
| Other Forward Air services | 8,774 | 24.6 | 6,006 | 28.9 | 2,768 | 46.1 | |||||||||||||||||||||
| Forward Air - Total purchased transportation | 201,297 | 44.9 | 168,920 | 45.8 | 32,377 | 19.2 | |||||||||||||||||||||
| TQI - Pharmaceutical services | 18,698 | 50.8 | 15,835 | 55.5 | 2,863 | 18.1 | |||||||||||||||||||||
| Forward Air Solutions - Pool distribution | 24,681 | 29.1 | 23,621 | 30.9 | 1,060 | 4.5 | |||||||||||||||||||||
| Intersegment eliminations | (2,417 | ) | 73.6 | (1,914 | ) | 76.3 | (503 | ) | 26.3 | ||||||||||||||||||
| Consolidated purchased transportation | $ | 242,259 | 42.7 | % | $ | 206,462 | 43.8 | % | $ | 35,797 | 17.3 | % | |||||||||||||||
| Forward Air Corporation | ||||||||
| Consolidated Balance Sheets | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
|
September 30, 2014 |
December 31, 2013(a) |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 24,573 | $ | 127,367 | ||||
| Accounts receivable, net | 100,016 | 76,500 | ||||||
| Other current assets | 14,057 | 16,493 | ||||||
| Total current assets | 138,646 | 220,360 | ||||||
| Property and equipment | 303,755 | 271,050 | ||||||
| Less accumulated depreciation and amortization | 127,259 | 116,287 | ||||||
| Net property and equipment | 176,496 | 154,763 | ||||||
| Goodwill and other acquired intangibles: | ||||||||
| Goodwill | 140,678 | 88,496 | ||||||
| Other acquired intangibles, net of accumulated amortization | 71,778 | 40,110 | ||||||
| Total net goodwill and other acquired intangibles | 212,456 | 128,606 | ||||||
| Other assets | 2,347 | 2,540 | ||||||
| Total assets | $ | 529,945 | $ | 506,269 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 21,395 | $ | 16,267 | ||||
| Accrued expenses | 23,356 | 18,275 | ||||||
| Current portion of debt and capital lease obligations | 280 | 69 | ||||||
| Total current liabilities | 45,031 | 34,611 | ||||||
| Debt and capital lease obligations, less current portion | 1,346 | 3 | ||||||
| Other long-term liabilities | 8,148 | 8,940 | ||||||
| Deferred income taxes | 28,838 | 26,850 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock | 302 | 305 | ||||||
| Additional paid-in capital | 126,516 | 107,726 | ||||||
| Retained earnings | 319,764 | 327,834 | ||||||
| Total shareholders’ equity | 446,582 | 435,865 | ||||||
| Total liabilities and shareholders’ equity | $ | 529,945 | $ | 506,269 | ||||
| (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 | ||||||||||
|
September 30, 2014 |
September 30, 2013 |
|||||||||
| Operating activities: | ||||||||||
| Net income | $ | 16,744 | $ | 14,197 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||
| Depreciation and amortization | 8,115 | 6,220 | ||||||||
| Share-based compensation | 1,676 | 1,525 | ||||||||
| Gain on disposal of property and equipment | (329 | ) | (185 | ) | ||||||
| Provision for loss (recovery) on receivables | 46 | (56 | ) | |||||||
| Provision for revenue adjustments | 646 | 579 | ||||||||
| Deferred income tax | 156 | 1,722 | ||||||||
| Excess tax benefit for stock options exercised | 353 | (337 | ) | |||||||
| Changes in operating assets and liabilities | ||||||||||
| Accounts receivable | (3,148 | ) | (7,458 | ) | ||||||
| Prepaid expenses and other current assets | 1,032 | 515 | ||||||||
| Accounts payable and accrued expenses | 587 | 6,515 | ||||||||
| Net cash provided by operating activities | 25,878 | 23,237 | ||||||||
| Investing activities: | ||||||||||
| Proceeds from disposal of property and equipment | 1,120 | 617 | ||||||||
| Purchases of property and equipment | (3,681 | ) | (5,272 | ) | ||||||
| Acquisition of business, net of cash acquired | (1,350 | ) | — | |||||||
| Other | 246 | (51 | ) | |||||||
| Net cash used in investing activities | (3,665 | ) | (4,706 | ) | ||||||
| Financing activities: | ||||||||||
| Payments of debt and capital lease obligations | (84 | ) | (48 | ) | ||||||
| Proceeds from exercise of stock options | 1,503 | 1,687 | ||||||||
| Payments of cash dividends | (3,662 | ) | (3,057 | ) | ||||||
| Repurchase of common stock (repurchase program) | (19,987 | ) | — | |||||||
| Excess tax benefit for stock options exercised | (353 | ) | 337 | |||||||
| Net cash used in financing activities | (22,583 | ) | (1,081 | ) | ||||||
| Net (decrease) increase in cash | (370 | ) | 17,450 | |||||||
| Cash at beginning of period | 24,943 | 81,101 | ||||||||
| Cash at end of period | $ | 24,573 | $ | 98,551 | ||||||
| Forward Air Corporation | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Nine months ended | ||||||||||
|
September 30, 2014 |
September 30, 2013 |
|||||||||
| Operating activities: | ||||||||||
| Net income | $ | 44,123 | $ | 38,882 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||
| Depreciation and amortization | 22,879 | 17,377 | ||||||||
| Share-based compensation | 5,005 | 4,619 | ||||||||
| Gain on disposal of property and equipment | (441 | ) | (468 | ) | ||||||
| Provision for (recovery) loss on receivables | (39 | ) | 234 | |||||||
| Provision for revenue adjustments | 1,896 | 1,705 | ||||||||
| Deferred income tax | 1,729 | 4,658 | ||||||||
| Excess tax benefit for stock options exercised | (554 | ) | (3,207 | ) | ||||||
| Changes in operating assets and liabilities | ||||||||||
| Accounts receivable | (15,875 | ) | (4,262 | ) | ||||||
| Prepaid expenses and other current assets | (1,397 | ) | (1,575 | ) | ||||||
| Accounts payable and accrued expenses | 7,767 | 2,524 | ||||||||
| Net cash provided by operating activities | 65,093 | 60,487 | ||||||||
| Investing activities: | ||||||||||
| Proceeds from disposal of property and equipment | 1,582 | 1,665 | ||||||||
| Purchases of property and equipment | (37,101 | ) | (33,266 | ) | ||||||
| Acquisition of business, net of cash acquired | (84,348 | ) | (45,328 | ) | ||||||
| Other | 53 | (111 | ) | |||||||
| Net cash used in investing activities | (119,814 | ) | (77,040 | ) | ||||||
| Financing activities: | ||||||||||
| Payments of debt and capital lease obligations | (9,662 | ) | (20,351 | ) | ||||||
| Proceeds from exercise of stock options | 13,083 | 29,866 | ||||||||
| Payments of cash dividends | (11,141 | ) | (9,071 | ) | ||||||
| Repurchase of common stock (repurchase program) | (39,972 | ) | — | |||||||
| Common stock issued under employee stock purchase plan | 148 | 137 | ||||||||
| Cash settlement of share-based awards for minimum tax withholdings | (1,083 | ) | (866 | ) | ||||||
| Excess tax benefit for stock options exercised | 554 | 3,207 | ||||||||
| Net cash (used in) provided by financing activities | (48,073 | ) | 2,922 | |||||||
| Net decrease in cash | (102,794 | ) | (13,631 | ) | ||||||
| Cash at beginning of period | 127,367 | 112,182 | ||||||||
| Cash at end of period | $ | 24,573 | $ | 98,551 | ||||||
| Forward Air Corporation | |||||||||||||||||||||||||||
| Segment Information | |||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||
| September 30, | Percent of | September 30, | Percent of | Percent | |||||||||||||||||||||||
| 2014 | Revenue | 2013 | Revenue | Change | Change | ||||||||||||||||||||||
| Operating revenue | |||||||||||||||||||||||||||
| Forward Air | $ | 160.1 | 79.4 | % | $ | 128.8 | 75.8 | % | $ | 31.3 | 24.3 | % | |||||||||||||||
| FASI | 30.6 | 15.2 | 29.8 | 17.5 | 0.8 | 2.7 | |||||||||||||||||||||
| TQI | 12.0 | 6.0 | 12.4 | 7.3 | (0.4 | ) | (3.2 | ) | |||||||||||||||||||
| Intercompany eliminations | (1.2 | ) | (0.6 | ) | (1.0 | ) | (0.6 | ) | (0.2 | ) | 20.0 | ||||||||||||||||
| Total | 201.5 | 100.0 | 170.0 | 100.0 | 31.5 | 18.5 | |||||||||||||||||||||
| Purchased transportation | |||||||||||||||||||||||||||
| Forward Air | 71.9 | 44.9 | 59.9 | 46.5 | 12.0 | 20.0 | |||||||||||||||||||||
| FASI | 8.8 | 28.8 | 9.1 | 30.5 | (0.3 | ) | (3.3 | ) | |||||||||||||||||||
| TQI | 6.0 | 50.0 | 6.9 | 55.6 | (0.9 | ) | (13.0 | ) | |||||||||||||||||||
| Intercompany eliminations | (0.8 | ) | 66.7 | (0.7 | ) | 70.0 | (0.1 | ) | 14.3 | ||||||||||||||||||
| Total | 85.9 | 42.6 | 75.2 | 44.2 | 10.7 | 14.2 | |||||||||||||||||||||
| Salaries, wages and employee benefits | |||||||||||||||||||||||||||
| Forward Air | 33.1 | 20.7 | 27.3 | 21.2 | 5.8 | 21.2 | |||||||||||||||||||||
| FASI | 10.4 | 34.0 | 10.0 | 33.6 | 0.4 | 4.0 | |||||||||||||||||||||
| TQI | 2.2 | 18.3 | 1.8 | 14.5 | 0.4 | 22.2 | |||||||||||||||||||||
| Total | 45.7 | 22.7 | 39.1 | 23.0 | 6.6 | 16.9 | |||||||||||||||||||||
| Operating leases | |||||||||||||||||||||||||||
| Forward Air | 6.5 | 4.1 | 4.9 | 3.8 | 1.6 | 32.7 | |||||||||||||||||||||
| FASI | 2.0 | 6.5 | 2.1 | 7.0 | (0.1 | ) | (4.8 | ) | |||||||||||||||||||
| TQI | — | — | — | — | — | — | |||||||||||||||||||||
| Total | 8.5 | 4.2 | 7.0 | 4.1 | 1.5 | 21.4 | |||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||
| Forward Air | 5.7 | 3.6 | 4.2 | 3.3 | 1.5 | 35.7 | |||||||||||||||||||||
| FASI | 1.5 | 4.9 | 1.3 | 4.4 | 0.2 | 15.4 | |||||||||||||||||||||
| TQI | 0.9 | 7.5 | 0.7 | 5.7 | 0.2 | 28.6 | |||||||||||||||||||||
| Total | 8.1 | 4.0 | 6.2 | 3.7 | 1.9 | 30.6 | |||||||||||||||||||||
| Insurance and claims | |||||||||||||||||||||||||||
| Forward Air | 3.1 | 1.9 | 2.3 | 1.8 | 0.8 | 34.8 | |||||||||||||||||||||
| FASI | 0.4 | 1.3 | 0.8 | 2.7 | (0.4 | ) | (50.0 | ) | |||||||||||||||||||
| TQI | 0.2 | 1.7 | 0.2 | 1.6 | — | — | |||||||||||||||||||||
| Total | 3.7 | 1.9 | 3.3 | 1.9 | 0.4 | 12.1 | |||||||||||||||||||||
| Fuel expense | |||||||||||||||||||||||||||
| Forward Air | 2.1 | 1.3 | 0.9 | 0.7 | 1.2 | 133.3 | |||||||||||||||||||||
| FASI | 1.8 | 5.9 | 1.7 | 5.7 | 0.1 | 5.9 | |||||||||||||||||||||
| TQI | 1.1 | 9.2 | 1.3 | 10.5 | (0.2 | ) | (15.4 | ) | |||||||||||||||||||
| Total | 5.0 | 2.5 | 3.9 | 2.3 | 1.1 | 28.2 | |||||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||||||
| Forward Air | 13.5 | 8.4 | 8.7 | 6.7 | 4.8 | 55.2 | |||||||||||||||||||||
| FASI | 3.9 | 12.7 | 3.4 | 11.4 | 0.5 | 14.7 | |||||||||||||||||||||
| TQI | 0.7 | 5.8 | 0.6 | 4.8 | 0.1 | 16.7 | |||||||||||||||||||||
| Intercompany eliminations | (0.4 | ) | 33.3 | (0.3 | ) | 30.0 | (0.1 | ) | 33.3 | ||||||||||||||||||
| Total | 17.7 | 8.8 | 12.4 | 7.3 | 5.3 | 42.7 | |||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||||||
| Forward Air | 24.2 | 15.1 | 20.6 | 16.0 | 3.6 | 17.5 | |||||||||||||||||||||
| FASI | 1.8 | 5.9 | 1.4 | 4.7 | 0.4 | 28.6 | |||||||||||||||||||||
| TQI | 0.9 | 7.5 | 0.9 | 7.3 | — | — | |||||||||||||||||||||
| Total | $ | 26.9 | 13.3 | % | $ | 22.9 | 13.5 | % | $ | 4.0 | 17.5 | % | |||||||||||||||
| Forward Air Corporation | |||||||||||||||||||||||||||
| Segment Information | |||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Nine months ended | |||||||||||||||||||||||||||
| September 30, | Percent of | September 30, | Percent of | Percent | |||||||||||||||||||||||
| 2014 | Revenue | 2013 | Revenue | Change | Change | ||||||||||||||||||||||
| Operating revenue | |||||||||||||||||||||||||||
| Forward Air | $ | 448.5 | 79.1 | % | $ | 369.0 | 78.3 | % | $ | 79.5 | 21.5 | % | |||||||||||||||
| FASI | 84.9 | 15.0 | 76.4 | 16.2 | 8.5 | 11.1 | |||||||||||||||||||||
| TQI | 36.8 | 6.5 | 28.5 | 6.0 | 8.3 | 29.1 | |||||||||||||||||||||
| Intercompany eliminations | (3.3 | ) | (0.6 | ) | (2.5 | ) | (0.5 | ) | (0.8 | ) | 32.0 | ||||||||||||||||
| Total | 566.9 | 100.0 | 471.4 | 100.0 | 95.5 | 20.3 | |||||||||||||||||||||
| Purchased transportation | |||||||||||||||||||||||||||
| Forward Air | 201.3 | 44.9 | 168.9 | 45.8 | 32.4 | 19.2 | |||||||||||||||||||||
| FASI | 24.6 | 29.0 | 23.6 | 30.9 | 1.0 | 4.2 | |||||||||||||||||||||
| TQI | 18.7 | 50.8 | 15.9 | 55.8 | 2.8 | 17.6 | |||||||||||||||||||||
| Intercompany eliminations | (2.4 | ) | 72.7 | (1.9 | ) | 76.0 | (0.5 | ) | 26.3 | ||||||||||||||||||
| Total | 242.2 | 42.7 | 206.5 | 43.8 | 35.7 | 17.3 | |||||||||||||||||||||
| Salaries, wages and employee benefits | |||||||||||||||||||||||||||
| Forward Air | 96.1 | 21.4 | 78.0 | 21.1 | 18.1 | 23.2 | |||||||||||||||||||||
| FASI | 29.0 | 34.2 | 26.8 | 35.1 | 2.2 | 8.2 | |||||||||||||||||||||
| TQI | 6.4 | 17.4 | 4.4 | 15.4 | 2.0 | 45.5 | |||||||||||||||||||||
| Total | 131.5 | 23.2 | 109.2 | 23.2 | 22.3 | 20.4 | |||||||||||||||||||||
| Operating leases | |||||||||||||||||||||||||||
| Forward Air | 18.4 | 4.1 | 14.9 | 4.0 | 3.5 | 23.5 | |||||||||||||||||||||
| FASI | 6.5 | 7.7 | 5.9 | 7.7 | 0.6 | 10.2 | |||||||||||||||||||||
| TQI | 0.1 | 0.3 | 0.1 | 0.4 | — | — | |||||||||||||||||||||
| Total | 25.0 | 4.4 | 20.9 | 4.4 | 4.1 | 19.6 | |||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||
| Forward Air | 16.0 | 3.6 | 12.1 | 3.3 | 3.9 | 32.2 | |||||||||||||||||||||
| FASI | 4.2 | 4.9 | 3.6 | 4.7 | 0.6 | 16.7 | |||||||||||||||||||||
| TQI | 2.7 | 7.3 | 1.7 | 6.0 | 1.0 | 58.8 | |||||||||||||||||||||
| Total | 22.9 | 4.0 | 17.4 | 3.7 | 5.5 | 31.6 | |||||||||||||||||||||
| Insurance and claims | |||||||||||||||||||||||||||
| Forward Air | 8.7 | 1.9 | 6.5 | 1.8 | 2.2 | 33.8 | |||||||||||||||||||||
| FASI | 1.8 | 2.1 | 2.3 | 3.0 | (0.5 | ) | (21.7 | ) | |||||||||||||||||||
| TQI | 0.5 | 1.4 | 0.4 | 1.4 | 0.1 | 25.0 | |||||||||||||||||||||
| Total | 11.0 | 2.0 | 9.2 | 1.9 | 1.8 | 19.6 | |||||||||||||||||||||
| Fuel expense | |||||||||||||||||||||||||||
| Forward Air | 6.2 | 1.4 | 2.9 | 0.8 | 3.3 | 113.8 | |||||||||||||||||||||
| FASI | 5.3 | 6.2 | 4.8 | 6.3 | 0.5 | 10.4 | |||||||||||||||||||||
| TQI | 3.5 | 9.5 | 2.8 | 9.8 | 0.7 | 25.0 | |||||||||||||||||||||
| Total | 15.0 | 2.6 | 10.5 | 2.2 | 4.5 | 42.9 | |||||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||||||
| Forward Air | 37.0 | 8.3 | 26.9 | 7.3 | 10.1 | 37.5 | |||||||||||||||||||||
| FASI | 10.7 | 12.6 | 9.0 | 11.8 | 1.7 | 18.9 | |||||||||||||||||||||
| TQI | 1.7 | 4.6 | 1.3 | 4.5 | 0.4 | 30.8 | |||||||||||||||||||||
| Intercompany eliminations | (0.9 | ) | 27.3 | (0.6 | ) | 24.0 | (0.3 | ) | 50.0 | ||||||||||||||||||
| Total | 48.5 | 8.6 | 36.6 | 7.8 | 11.9 | 32.5 | |||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||||||
| Forward Air | 64.8 | 14.4 | 58.8 | 15.9 | 6.0 | 10.2 | |||||||||||||||||||||
| FASI | 2.8 | 3.3 | 0.4 | 0.5 | 2.4 | 600.0 | |||||||||||||||||||||
| TQI | 3.2 | 8.7 | 1.9 | 6.7 | 1.3 | 68.4 | |||||||||||||||||||||
| Total | $ | 70.8 | 12.5 | % | $ | 61.1 | 13.0 | % | $ | 9.7 | 15.9 | % | |||||||||||||||
| Forward Air Corporation | ||||||||||||||
| Forward Air Inc. Operating Statistics | ||||||||||||||
| Three months ended | ||||||||||||||
| September 30, | September 30, | Percent | ||||||||||||
| 2014 | 2013 | Change | ||||||||||||
| Operating ratio | 84.9 | % | 84.0 | % | 1.1 | % | ||||||||
| Business days | 64.0 | 64.0 | — | |||||||||||
| Business weeks | 12.8 | 12.8 | — | |||||||||||
| Airport-to-airport: | ||||||||||||||
| Tonnage | ||||||||||||||
|
Total pounds1 |
484,827 | 462,297 | 4.9 | |||||||||||
|
Average weekly pounds1 |
37,877 | 36,117 | 4.9 | |||||||||||
| Linehaul shipments | ||||||||||||||
| Total linehaul | 734,163 | 688,257 | 6.7 | |||||||||||
| Average weekly | 57,356 | 53,770 | 6.7 | |||||||||||
| Forward Air Complete shipments | 146,024 | 124,184 | 17.6 | |||||||||||
| As a percentage of linehaul shipments | 19.9 | % | 18.0 | % | 10.6 | |||||||||
| Average linehaul shipment size | 660 | 672 | (1.8 | ) | ||||||||||
|
Revenue per pound2 |
||||||||||||||
| Linehaul yield | $ | 17.69 | $ | 16.97 | 3.3 | |||||||||
| Fuel surcharge impact | 1.94 | 1.85 | 0.4 | |||||||||||
| Forward Air Complete impact | 3.35 | 3.08 | 1.2 | |||||||||||
| Total airport-to-airport yield | $ | 22.98 | $ | 21.90 | 4.9 | |||||||||
| Expedited full truckload - TLX: | ||||||||||||||
| Miles | ||||||||||||||
|
Owner operator1 |
6,391 | 8,915 | (28.3 | ) | ||||||||||
|
Third party1 |
4,895 | 3,815 | 28.3 | |||||||||||
| Total Miles | 11,286 | 12,730 | (11.3 | ) | ||||||||||
| Revenue per mile | $ | 1.77 | $ | 1.50 | 18.0 | |||||||||
| Cost per mile | $ | 1.33 | $ | 1.14 | 16.7 | % | ||||||||
|
1 - In thousands |
||||||||||||||
|
2 - In dollars per hundred pound; percentage change is expressed as a percent of total yield. |
||||||||||||||
| Forward Air Corporation | ||||||||||||||
| Forward Air Inc. Operating Statistics | ||||||||||||||
| Nine months ended | ||||||||||||||
| September 30, | September 30, | Percent | ||||||||||||
| 2014 | 2013 | Change | ||||||||||||
| Operating ratio | 85.6 | % | 84.1 | % | 1.8 | % | ||||||||
| Business days | 191.0 | 191.0 | — | |||||||||||
| Business weeks | 38.2 | 38.2 | — | |||||||||||
| Airport-to-airport: | ||||||||||||||
| Tonnage | ||||||||||||||
|
Total pounds1 |
1,399,687 | 1,320,382 | 6.0 | |||||||||||
|
Average weekly pounds1 |
36,641 | 34,565 | 6.0 | |||||||||||
| Linehaul shipments | ||||||||||||||
| Total linehaul | 2,127,645 | 2,038,599 | 4.4 | |||||||||||
| Average weekly | 55,698 | 53,366 | 4.4 | |||||||||||
| Forward Air Complete shipments | 393,170 | 353,270 | 11.3 | |||||||||||
| As a percentage of linehaul shipments | 18.5 | % | 17.3 | % | 6.9 | |||||||||
| Average linehaul shipment size | 658 | 648 | 1.5 | |||||||||||
|
Revenue per pound2 |
||||||||||||||
| Linehaul yield | $ | 17.56 | $ | 17.08 | 2.2 | |||||||||
| Fuel surcharge impact | 2.00 | 1.92 | 0.4 | |||||||||||
| Forward Air Complete impact | 3.10 | 2.90 | 0.9 | |||||||||||
| Total airport-to-airport yield | $ | 22.66 | $ | 21.90 | 3.5 | |||||||||
| Expedited full truckload - TLX: | ||||||||||||||
| Miles | ||||||||||||||
|
Owner operator1 |
20,288 | 26,399 | (23.1 | ) | ||||||||||
|
Third party1 |
13,547 | 10,663 | 27.0 | |||||||||||
| Total Miles | 33,835 | 37,062 | (8.7 | ) | ||||||||||
| Revenue per mile | $ | 1.67 | $ | 1.49 | 12.1 | |||||||||
| Cost per mile | $ | 1.28 | $ | 1.12 | 14.3 | % | ||||||||
|
1 - In thousands |
||||||||||||||
|
2 - In dollars per hundred 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 October 23, 2014