Forward Air Corporation Reports Second Quarter 2019 Results

Reports record second quarter financial results, including revenue and cash flow from operations

Reports record year-to-date financial results, including revenue, cash flow from operations and free cash flow

GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ:FWRD) today reported financial results for the three and six months ended June 30, 2019.

Revenue for the three months ended June 30, 2019 increased 4.7% to $345.8 million from $330.3 million for the same period of 2018. Income from operations was $30.6 million compared to $32.9 million in the prior year period. Net income during the three months ended June 30, 2019 was $22.3 million compared to $24.3 million in the same period of 2018. Net income per diluted share for the three months ended June 30, 2019 was $0.78 compared to $0.82 in the prior year period.

Revenue for the six months ended June 30, 2019 increased 5.4% to $667.2 million from $633.0 million for the same period of 2018. Income from operations was $55.3 million compared to $57.1 million in the prior year period. Net income during the six months ended June 30, 2019 was $40.7 million compared to $42.0 million for the same period of 2018. Net income per diluted share for the six months ended June 30, 2019 was $1.41 compared to $1.42 for the same period of 2018.

For the three months ended June 30, 2019, the Company generated $30.2 million of cash flow from operations compared to $26.2 million for the same period in 2018. For the six months ended June 30, 2019, the Company generated $71.8 million of cash flow from operations compared to $67.0 million for the same period of 2018.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $41.2 million for the three months ended June 30, 2019 compared to $43.2 million for the same period of 2018. Free cash flow was $18.6 million for the three months ended June 30, 2019 compared to $19.0 million in the prior year period.

EBITDA was $76.8 million for the six months ended June 30, 2019 compared to $78.2 million for the same period of 2018. Free cash flow was $56.4 million for the six months ended June 30, 2019 compared to $54.2 million in the prior year period.

EBITDA and free cash flow are non-GAAP financial measures and reconciliations of these non-GAAP financial measures are provided in the attached financial tables.

Tom Schmitt, Chairman, President and CEO, commenting on second quarter results said, “Our growth strategies drove our record second quarter revenue, which increased 4.7%. Our operating income grew 5.5% before considering the net impact of the $5 million vehicle reserve recorded during the quarter.”

Commenting on the Company’s second quarter results, Michael J. Morris, CFO, said, “Our second quarter earnings per share of $0.78 was below our guidance range, driven by $0.11 per share net impact from the large vehicle reserve recorded during the quarter.” Regarding the Company’s third quarter 2019 guidance, Mr. Morris said, “We expect third quarter year-on-year revenue growth to be 7% to 11%. We expect net income per diluted share to be between $0.74 and $0.78 in the third quarter of 2019 compared to $0.76 in the third quarter of 2018. This earnings per share outlook reflects a $0.03 per share impact from executive transition expenses.”

On July 23, 2019, our Board of Directors declared a quarterly cash dividend of $0.18 per share of common stock. The dividend is payable to shareholders of record at the close of business on August 22, 2019 and is expected to be paid on September 6, 2019.

This quarterly dividend is made pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.72 for the full year 2019, payable in quarterly increments of $0.18 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 and position.

Review of Financial Results

Forward Air will hold a conference call to discuss second quarter 2019 results on Friday, July 26, 2019 at 9:00 a.m. EDT. The Company’s conference call will be available online on the Investor Relations portion of the Company’s website at www.forwardaircorp.com, where investors can easily find or navigate to pertinent information about us, or by dialing (800) 230-1092. A replay of the conference call will be available on the Investor Relations portion of the Company’s website at www.forwardaircorp.com beginning shortly after completion of the live call.

About Forward Air Corporation

Forward Air keeps your business moving forward by providing services within four business segments: Expedited LTL (provides expedited regional, inter-regional and national LTL services, including local pick-up and delivery, shipment consolidation/deconsolidation, warehousing, final mile solutions and customs brokerage by utilizing a comprehensive national network of terminals); Intermodal (provides first-and last-mile high-value drayage services both to and from seaports and railheads, dedicated contract and Container Freight Station warehouse and handling services); Truckload Premium Services (provides expedited truckload brokerage, dedicated fleet services, as well as high-security and temperature-controlled logistics services); and Pool Distribution (provides high-frequency handling and distribution of time sensitive product to numerous destinations within a specific geographic region). For more information, visit our website at www.forwardaircorp.com.

 

Forward Air Corporation

Consolidated Statements of Comprehensive Income

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30,
2019

 

June 30,
2018

 

June 30,
2019

 

June 30,
2018

Operating revenue:

 

 

 

 

 

 

 

Expedited LTL

$

205,722

 

 

$

192,891

 

 

$

384,275

 

 

$

362,835

 

Intermodal

50,539

 

 

49,162

 

 

104,654

 

 

97,731

 

Truckload Premium Services

46,113

 

 

48,947

 

 

91,780

 

 

95,040

 

Pool Distribution

45,805

 

 

43,305

 

 

90,990

 

 

85,976

 

Eliminations and other operations

(2,423

)

 

(3,962

)

 

(4,472

)

 

(8,631

)

Operating revenue

345,756

 

 

330,343

 

 

667,227

 

 

632,951

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Purchased transportation

155,124

 

 

155,716

 

 

299,138

 

 

295,382

 

Salaries, wages and employee benefits

80,278

 

 

72,073

 

 

156,640

 

 

141,655

 

Operating leases

20,326

 

 

18,006

 

 

39,499

 

 

35,970

 

Depreciation and amortization

10,681

 

 

10,362

 

 

21,508

 

 

21,052

 

Insurance and claims

13,229

 

 

10,086

 

 

22,601

 

 

17,238

 

Fuel expense

5,929

 

 

5,598

 

 

11,537

 

 

11,152

 

Other operating expenses

29,639

 

 

25,632

 

 

61,020

 

 

53,397

 

Total operating expenses

315,206

 

 

297,473

 

 

611,943

 

 

575,846

 

Income (loss) from operations:

 

 

 

 

 

 

 

Expedited LTL

26,889

 

 

26,526

 

 

46,436

 

 

47,298

 

Intermodal

5,245

 

 

5,543

 

 

11,426

 

 

9,012

 

Truckload Premium Services

689

 

 

1,717

 

 

1,530

 

 

1,674

 

Pool Distribution

1,567

 

 

1,589

 

 

2,818

 

 

2,960

 

Other operations

(3,840

)

 

(2,505

)

 

(6,926

)

 

(3,839

)

Income from operations

30,550

 

 

32,870

 

 

55,284

 

 

57,105

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

Interest expense

(581

)

 

(483

)

 

(1,156

)

 

(854

)

Other, net

(1

)

 

(1

)

 

(2

)

 

(1

)

Total other expense

(582

)

 

(484

)

 

(1,158

)

 

(855

)

Income before income taxes

29,968

 

 

32,386

 

 

54,126

 

 

56,250

 

Income tax expense

7,638

 

 

8,088

 

 

13,389

 

 

14,212

 

Net income and comprehensive income

$

22,330

 

 

$

24,298

 

 

$

40,737

 

 

$

42,038

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.78

 

 

$

0.83

 

 

$

1.42

 

 

$

1.42

 

Diluted

$

0.78

 

 

$

0.82

 

 

$

1.41

 

 

$

1.42

 

 

 

 

 

 

 

 

 

Dividends per share:

$

0.18

 

 

$

0.15

 

 

$

0.36

 

 

$

0.30

 

 
 

Expedited LTL Segment Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

June 30,

 

Percent of

 

June 30,

 

Percent of

 

 

 

Percent

 

2019

 

Revenue

 

2018

 

Revenue

 

Change

 

Change

Operating revenue

$

205.7

 

 

100.0

%

 

$

192.9

 

 

100.0

%

 

$

12.8

 

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

90.6

 

 

44.0

 

 

90.5

 

 

46.9

 

 

0.1

 

 

0.1

 

Salaries, wages and employee benefits

46.2

 

 

22.5

 

 

41.2

 

 

21.4

 

 

5.0

 

 

12.1

 

Operating leases

11.8

 

 

5.7

 

 

10.2

 

 

5.3

 

 

1.6

 

 

15.7

 

Depreciation and amortization

5.9

 

 

2.9

 

 

5.6

 

 

2.9

 

 

0.3

 

 

5.4

 

Insurance and claims

5.3

 

 

2.6

 

 

3.6

 

 

1.9

 

 

1.7

 

 

47.2

 

Fuel expense

2.0

 

 

1.0

 

 

1.6

 

 

0.8

 

 

0.4

 

 

25.0

 

Other operating expenses

17.0

 

 

8.3

 

 

13.7

 

 

7.1

 

 

3.3

 

 

24.1

 

Total operating expenses

178.8

 

 

86.9

 

 

166.4

 

 

86.3

 

 

12.4

 

 

7.5

 

Income from operations

$

26.9

 

 

13.1

%

 

$

26.5

 

 

13.7

%

 

$

0.4

 

 

1.5

%

 
 

Expedited LTL Operating Statistics

 

 

 

 

 

 

 

Three months ended

 

June 30,

 

June 30,

 

Percent

 

2019

 

2018

 

Change

 

 

 

 

 

 

Business days

64

 

 

64

 

 

%

 

 

 

 

 

 

Tonnage

 

 

 

 

 

Total pounds 1

626,748

 

 

668,129

 

 

(6.2

)

Pounds per day 1

9,793

 

 

10,440

 

 

(6.2

)

 

 

 

 

 

 

Shipments

 

 

 

 

 

Total shipments 1

1,014.3

 

 

1,094.9

 

 

(7.4

)

Shipments per day 1

15.8

 

 

17.1

 

 

(7.4

)

 

 

 

 

 

 

Weight per shipment

618

 

 

610

 

 

1.3

 

 

 

 

 

 

 

Revenue per hundredweight

$

27.39

 

 

$

25.91

 

 

5.7

 

Revenue per hundredweight, ex fuel

22.91

 

 

21.89

 

 

4.7

 

 

 

 

 

 

 

Revenue per shipment

$

171

 

 

$

160

 

 

6.9

 

Revenue per shipment, ex fuel

144

 

 

136

 

 

5.9

 

 

 

 

 

 

 

Network revenue from door-to-door shipments as a percentage of network revenue 2,3

39.9

%

 

36.0

%

 

10.8

%

 

 

 

 

 

 

1 In thousands

 

 

 

 

 

2 Door-to-door shipments include all shipments with a pickup and/or delivery

3 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and final mile revenue 

 
 

Intermodal Segment Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

June 30,

 

Percent of

 

June 30,

 

Percent of

 

 

 

Percent

 

2019

 

Revenue

 

2018

 

Revenue

 

Change

 

Change

Operating revenue

$

50.5

 

 

100.0

%

 

$

49.2

 

 

100.0

%

 

$

1.3

 

 

2.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

18.2

 

 

36.0

 

 

19.4

 

 

39.4

 

 

(1.2

)

 

(6.2

)

Salaries, wages and employee benefits

12.4

 

 

24.6

 

 

10.5

 

 

21.3

 

 

1.9

 

 

18.1

 

Operating leases

4.0

 

 

7.9

 

 

3.9

 

 

7.9

 

 

0.1

 

 

2.6

 

Depreciation and amortization

1.8

 

 

3.6

 

 

1.5

 

 

3.1

 

 

0.3

 

 

20.0

 

Insurance and claims

1.7

 

 

3.4

 

 

1.4

 

 

2.8

 

 

0.3

 

 

21.4

 

Fuel expense

1.7

 

 

3.4

 

 

1.7

 

 

3.5

 

 

 

 

 

Other operating expenses

5.5

 

 

10.9

 

 

5.2

 

 

10.6

 

 

0.3

 

 

5.8

 

Total operating expenses

45.3

 

 

89.7

 

 

43.6

 

 

88.6

 

 

1.7

 

 

3.9

 

Income from operations

$

5.2

 

 

10.3

%

 

$

5.6

 

 

11.4

%

 

$

(0.4

)

 

(7.1

)%

 
 

Intermodal Operating Statistics

 

 

 

Three months ended

 

June 30,

 

June 30,

 

Percent

 

2019

 

2018

 

Change

 

 

 

 

 

 

Drayage shipments

76,074

 

 

74,021

 

 

2.8

%

Drayage revenue per shipment

$

571

 

 

$

565

 

 

1.1

 

Number of locations

21

 

 

19

 

 

10.5

%

 
 

Truckload Premium Services Segment Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

June 30,

 

Percent of

 

June 30,

 

Percent of

 

 

 

Percent

 

2019

 

Revenue

 

2018

 

Revenue

 

Change

 

Change

Operating revenue

$

46.1

 

 

100.0

%

 

$

48.9

 

 

100.0

%

 

$

(2.8

)

 

(5.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

34.5

 

 

74.8

 

 

37.0

 

 

75.7

 

 

(2.5

)

 

(6.8

)

Salaries, wages and employee benefits

4.6

 

 

10.0

 

 

4.6

 

 

9.4

 

 

 

 

 

Operating leases

0.4

 

 

0.9

 

 

0.1

 

 

0.2

 

 

0.3

 

 

300.0

 

Depreciation and amortization

1.5

 

 

3.3

 

 

1.6

 

 

3.3

 

 

(0.1

)

 

(6.3

)

Insurance and claims

1.3

 

 

2.8

 

 

0.9

 

 

1.8

 

 

0.4

 

 

44.4

 

Fuel expense

0.8

 

 

1.7

 

 

0.8

 

 

1.6

 

 

 

 

 

Other operating expenses

2.3

 

 

5.0

 

 

2.2

 

 

4.5

 

 

0.1

 

 

4.5

 

Total operating expenses

45.4

 

 

98.5

 

 

47.2

 

 

96.5

 

 

(1.8

)

 

(3.8

)

Income from operations

$

0.7

 

 

1.5

%

 

$

1.7

 

 

3.5

%

 

$

(1.0

)

 

(58.8

)%

 
 

Truckload Premium Services Operating Statistics

 

 

 

Three months ended

 

June 30,

 

June 30,

 

Percent

 

2019

 

2018

 

Change

 

 

 

 

 

 

Total Miles 1

19,259

 

 

20,136

 

 

(4.4

)%

Empty Miles Percentage

6.6

%

 

9.3

%

 

(29.0

)

Tractors (avg)

337

 

 

321

 

 

5.0

 

Miles per tractor per week 2

1,912

 

 

2,284

 

 

(16.3

)

 

 

 

 

 

 

Revenue per mile

$

2.29

 

 

$

2.32

 

 

(1.3

)

Cost per mile

$

1.83

 

 

$

1.86

 

 

(1.6

)%

 

 

 

 

 

 

1 In thousands

2 Calculated using Company-employed driver and owner-operator miles

 
 

Pool Distribution Segment Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

June 30,

 

Percent of

 

June 30,

 

Percent of

 

 

 

Percent

 

2019

 

Revenue

 

2018

 

Revenue

 

Change

 

Change

Operating revenue

$

45.8

 

 

100.0

%

 

$

43.3

 

 

100.0

%

 

$

2.5

 

 

5.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

13.8

 

 

30.1

 

 

12.4

 

 

28.6

 

 

1.4

 

 

11.3

 

Salaries, wages and employee benefits

16.8

 

 

36.7

 

 

15.9

 

 

36.7

 

 

0.9

 

 

5.7

 

Operating leases

4.2

 

 

9.2

 

 

3.8

 

 

8.8

 

 

0.4

 

 

10.5

 

Depreciation and amortization

1.5

 

 

3.3

 

 

1.7

 

 

3.9

 

 

(0.2

)

 

(11.8

)

Insurance and claims

1.5

 

 

3.3

 

 

1.0

 

 

2.3

 

 

0.5

 

 

50.0

 

Fuel expense

1.5

 

 

3.3

 

 

1.6

 

 

3.7

 

 

(0.1

)

 

(6.3

)

Other operating expenses

4.9

 

 

10.7

 

 

5.3

 

 

12.3

 

 

(0.4

)

 

(7.5

)

Total operating expenses

44.2

 

 

96.5

 

 

41.7

 

 

96.3

 

 

2.5

 

 

6.0

 

Income from operations

$

1.6

 

 

3.5

%

 

$

1.6

 

 

3.7

%

 

$

 

 

%

 
 

Pool Operating Statistics

 

 

 

Three months ended

 

June 30,

 

June 30,

 

Percent

 

2019

 

2018

 

Change

 

 

 

 

 

 

Cartons 1

23,031

 

 

20,101

 

 

14.6

%

Revenue per carton

$

1.99

 

 

$

2.15

 

 

(7.4

)

Terminals

28

 

 

28

 

 

%

 

 

 

 

 

 

1 In thousands

 
 

Forward Air Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

June 30,
2019

 

December 31,
2018

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

14,777

 

 

$

25,657

 

Accounts receivable, net

154,715

 

 

156,359

 

Other current assets

23,580

 

 

19,066

 

Total current assets

193,072

 

 

201,082

 

 

 

 

 

Property and equipment

422,968

 

 

413,900

 

Less accumulated depreciation and amortization

214,126

 

 

204,005

 

Total property and equipment, net

208,842

 

 

209,895

 

Operating lease right-of-use assets

149,544

 

 

 

Goodwill and other acquired intangibles:

 

 

 

Goodwill

218,373

 

 

199,092

 

Other acquired intangibles, net of accumulated amortization

126,482

 

 

113,661

 

Total goodwill and other acquired intangibles, net

344,855

 

 

312,753

 

Other assets

40,244

 

 

36,485

 

Total assets

$

936,557

 

 

$

760,215

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

30,585

 

 

$

34,630

 

Accrued expenses

50,414

 

 

39,784

 

Other current liabilities

6,069

 

 

 

Current portion of debt and finance lease obligations

197

 

 

309

 

Current portion of operating lease obligations

49,370

 

 

 

Total current liabilities

136,635

 

 

74,723

 

 

 

 

 

Debt and finance lease obligations, less current portion

57,311

 

 

47,335

 

Operating lease obligations, less current portion

100,752

 

 

 

Other long-term liabilities

51,365

 

 

47,739

 

Deferred income taxes

40,452

 

 

37,174

 

 

 

 

 

Shareholders’ equity:

 

 

 

Common stock

280

 

 

285

 

Additional paid-in capital

218,080

 

 

210,296

 

Retained earnings

331,682

 

 

342,663

 

Total shareholders’ equity

550,042

 

 

553,244

 

Total liabilities and shareholders’ equity

$

936,557

 

 

$

760,215

 

 
 

Forward Air Corporation

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Three months ended

 

June 30, 2019

 

June 30, 2018

Operating activities:

 

 

 

Net income

$

22,330

 

 

$

24,298

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

Depreciation and amortization

10,681

 

 

10,362

 

Share-based compensation

3,197

 

 

2,417

 

Gain on disposal of property and equipment

(27

)

 

(216

)

Provision for loss on receivables

2

 

 

323

 

Provision for revenue adjustments

740

 

 

1,012

 

Deferred income tax expense

2,442

 

 

781

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable

(4,834

)

 

(7,537

)

Prepaid expenses and other current assets

(7,683

)

 

(6,354

)

Income taxes

(6,813

)

 

(3,196

)

Accounts payable and accrued expenses

10,203

 

 

4,288

 

Net cash provided by operating activities

30,238

 

 

26,178

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from disposal of property and equipment

865

 

 

4,195

 

Purchases of property and equipment

(12,508

)

 

(11,385

)

Acquisition of business, net of cash acquired

(27,000

)

 

 

Other

6

 

 

(257

)

Net cash used in investing activities

(38,637

)

 

(7,447

)

 

 

 

 

Financing activities:

 

 

 

Payments of finance lease obligations

(69

)

 

(77

)

Proceeds from senior credit facility

10,000

 

 

 

Proceeds from exercise of stock options

448

 

 

1,112

 

Payments of cash dividends

(5,144

)

 

(4,415

)

Repurchase of common stock (repurchase program)

(24,436

)

 

(8,172

)

Proceeds from common stock issued under employee stock purchase plan

261

 

 

237

 

Cash settlement of share-based awards for tax withholdings

(49

)

 

(49

)

Net cash used in financing activities

(18,989

)

 

(11,364

)

Net (decrease) increase in cash

(27,388

)

 

7,367

 

Cash at beginning of period

42,165

 

 

12,735

 

Cash at end of period

$

14,777

 

 

$

20,102

 

 
 

Forward Air Corporation

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six months ended

 

June 30, 2019

 

June 30, 2018

Operating activities:

 

 

 

Net income

$

40,737

 

 

$

42,038

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

Depreciation and amortization

21,508

 

 

21,052

 

Share-based compensation

6,244

 

 

4,678

 

Gain on disposal of property and equipment

(88

)

 

(134

)

Provision for loss on receivables

631

 

 

457

 

Provision for revenue adjustments

1,280

 

 

1,829

 

Deferred income tax expense

3,278

 

 

4,494

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable

(267

)

 

(6,732

)

Prepaid expenses and other current assets

(4,984

)

 

(3,639

)

Income taxes

(2,182

)

 

(1,428

)

Accounts payable and accrued expenses

5,607

 

 

4,375

 

Net cash provided by operating activities

71,764

 

 

66,990

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from disposal of property and equipment

1,272

 

 

4,839

 

Purchases of property and equipment

(16,598

)

 

(17,606

)

Acquisition of business, net of cash acquired

(27,000

)

 

 

Other

 

 

(347

)

Net cash used in investing activities

(42,326

)

 

(13,114

)

 

 

 

 

Financing activities:

 

 

 

Payments of finance lease obligations

(137

)

 

(151

)

Proceeds from senior credit facility

10,000

 

 

 

Proceeds from exercise of stock options

1,278

 

 

1,112

 

Payments of cash dividends

(10,333

)

 

(8,828

)

Repurchase of common stock (repurchase program)

(38,617

)

 

(28,165

)

Proceeds from common stock issued under employee stock purchase plan

261

 

 

237

 

Cash settlement of share-based awards for tax withholdings

(2,770

)

 

(1,872

)

Net cash used in financing activities

(40,318

)

 

(37,667

)

Net (decrease) increase in cash

(10,880

)

 

16,209

 

Cash at beginning of period

25,657

 

 

3,893

 

Cash at end of period

$

14,777

 

 

$

20,102

 

 

Forward Air Corporation Reconciliation of U.S. GAAP and Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP (also referred to herein as “reported”). However, the Company also uses “non-GAAP financial measures” that are derived on the basis of methodologies other than in accordance with GAAP. Specifically, the Company believes that meaningful analysis of its financial performance in 2019 and 2018 requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions and in evaluating the Company’s performance.

This press release contains the following non-GAAP financial measures on a consolidated basis: earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the three and six months ended June 30, 2019 and 2018; and free cash flow for the three and six months ended June 30, 2019 and 2018. The Company believes that including these items will assist investors in understanding its core operating performance and allow for more accurate comparisons of results.

The Company believes that EBITDA improves comparability from period to period by removing the impact of its capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments as set out in the attached tables. The Company believes that free cash flow is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance stockholder value.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. Non-GAAP financial information does not represent a comprehensive basis of accounting. As required by the Securities and Exchange Act of 1933 and the rules and regulations promulgated thereunder, the tables below present, for the periods indicated, a reconciliation of the Company's presented non-GAAP financial measures to the most directly comparable GAAP financial measures.

 

Forward Air Corporation

Reconciliation to U.S. GAAP

(In thousands)

(Unaudited)

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

Net income

$

22,330

 

 

$

24,298

 

 

$

40,737

 

 

$

42,038

 

Interest expense and other, net

582

 

 

484

 

 

1,158

 

 

855

 

Income tax expense

7,638

 

 

8,088

 

 

13,389

 

 

14,212

 

Depreciation and amortization

10,681

 

 

10,362

 

 

21,508

 

 

21,052

 

EBITDA

$

41,231

 

 

$

43,232

 

 

$

76,792

 

 

$

78,157

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

Net cash provided by operating activities

$

30,238

 

 

$

26,178

 

 

$

71,764

 

 

$

66,990

 

Proceeds from disposal of property and equipment

865

 

 

4,195

 

 

1,272

 

 

4,839

 

Purchases of property and equipment

(12,508

)

 

(11,385

)

 

(16,598

)

 

(17,606

)

Free cash flow

$

18,595

 

 

$

18,988

 

 

$

56,438

 

 

$

54,223

 

 

The following table summarizes supplemental guidance information that management believes to be useful.

Forward Air Corporation

Additional Guidance Data

(In thousands, except per share data)

(Unaudited)

 

 

 

Three months ended

Actual

June 30, 2019

Net income

$

22,330

 

Income allocated to participating securities

(251

)

Numerator for diluted income per share - net income

$

22,079

 

 

 

Fully diluted share count

28,373

 

Diluted earnings per share

$

0.78

 

 

 

 

 

Projected

Full year 2019

Projected tax rate

25.5

%

 

 

Projected capital expenditures, net

$

30,500

 

 

 

Projected

December 31, 2019

Projected year end fully diluted share count

28,100

 

 

 

Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements included in this press release relate to expected third quarter 2019 financial growth, including revenue growth and net income per diluted shares, full year 2019 projected tax rate, share count, capital expenditures and the future declaration of dividends.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these 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, the creditworthiness of our customers and their ability to pay for services rendered, the availability and compensation of qualified independent owner-operators and freight handlers as well as contracted, third-party carriers needed to serve our customers’ transportation needs, the inability of our information systems to handle an increased volume of freight moving through our network, changes in fuel prices, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, loss of a major customer, increasing competition and pricing pressure, our ability to secure terminal facilities in desirable locations at reasonable rates, our inability to successfully integrate acquisitions, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental and tax matters, insurance matters, the handling of hazardous materials and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2018.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Forward Air Corporation
Michael J. Morris, 404-362-8933
mmorris@forwardair.com

Source: Forward Air Corporation