Forward Air Corporation Reports Third Quarter 2019 Results
Forward Air Corporation Reports Third Quarter 2019 Results
Reports record third quarter financial results, including revenue, operating income, earnings per share and EBITDA
Reports record year-to-date financial results, including revenue, earnings per share, cash from operating activities and free cash flow
GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ:FWRD) today reported financial results for the three and nine months ended September 30, 2019.
Revenue for the three months ended September 30, 2019 increased 9.1% to $361.7 million from $331.4 million for the same period of 2018. Income from operations was $30.7 million compared to $29.9 million in the prior year period. Net income during the three months ended September 30, 2019 was $22.2 million compared to $22.3 million in the same period of 2018. Net income per diluted share for the three months ended September 30, 2019 was $0.78 compared to $0.76 in the prior year period.
Revenue for the nine months ended September 30, 2019 increased 6.7% to $1,028.9 million from $964.3 million for the same period of 2018. Income from operations was $86.0 million compared to $87.0 million in the prior year period. Net income during the nine months ended September 30, 2019 was $62.9 million compared to $64.4 million for the same period of 2018. Net income per diluted share for the nine months ended September 30, 2019 was $2.19 compared to $2.18 for the same period of 2018.
For the three months ended September 30, 2019, the Company generated $46.0 million of cash flow from operations compared to $46.9 million for the same period in 2018. For the nine months ended September 30, 2019, the Company generated $117.7 million of cash flow from operations compared to $113.8 million for the same period of 2018.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") was $41.2 million for the three months ended September 30, 2019 compared to $40.2 million for the same period of 2018. Free cash flow was $36.3 million for the three months ended September 30, 2019 compared to $31.3 million in the prior year period.
EBITDA was $118.0 million for the nine months ended September 30, 2019 compared to $118.3 million for the same period of 2018. Free cash flow was $92.7 million for the nine months ended September 30, 2019 compared to $85.5 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 third quarter results said, “Our growth strategies drove our record third quarter results. Consolidated revenues grew 9.1% while consolidated operating income grew 10.1% before considering the net impact of a $2.5 million increased vehicle reserve recorded during the quarter.”
Commenting on the Company’s third quarter results, Michael J. Morris, CFO, said, “Our third quarter earnings per share of $0.78 was at the high end of our guidance range, and reflected a $0.06 per share net impact of an increased vehicular reserve for unfavorable development of claims previously disclosed on June 21, 2019.” Regarding the Company’s fourth quarter 2019 guidance, Mr. Morris said, “We expect fourth quarter year-on-year revenue growth to be 6% to 10% and net income per diluted share to be between $0.90 and $0.94 in the fourth quarter of 2019. This compares to $0.95 in the fourth quarter of 2018, which benefited from a low book tax rate of 20.0%.”
On October 22, 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 November 21, 2019 and is expected to be paid on December 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 third quarter 2019 results on Friday, October 25, 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) 230-1059. 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.
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Forward Air Corporation |
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Consolidated Statements of Comprehensive Income |
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(In thousands, except per share data) |
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(Unaudited) |
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Three months ended |
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Nine months ended |
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September 30,
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September 30,
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September 30,
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September 30,
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Operating revenue: |
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Expedited LTL |
$ |
210,060 |
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$ |
188,507 |
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$ |
594,336 |
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$ |
551,342 |
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Intermodal |
58,347 |
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|
50,545 |
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163,000 |
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148,275 |
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Truckload Premium Services |
45,458 |
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47,942 |
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137,239 |
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142,982 |
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Pool Distribution |
50,962 |
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47,280 |
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141,952 |
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133,256 |
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Eliminations and other operations |
(3,164 |
) |
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(2,899 |
) |
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(7,636 |
) |
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(11,530 |
) |
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Operating revenue |
361,663 |
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|
331,375 |
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1,028,891 |
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964,325 |
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Operating expenses: |
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Purchased transportation |
163,606 |
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|
155,451 |
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|
462,744 |
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|
450,833 |
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Salaries, wages and employee benefits |
87,259 |
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|
76,028 |
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|
243,899 |
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|
217,682 |
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Operating leases |
20,521 |
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|
18,671 |
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|
60,021 |
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|
54,640 |
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Depreciation and amortization |
10,528 |
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|
10,295 |
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|
32,036 |
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|
31,346 |
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Insurance and claims |
10,930 |
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|
9,203 |
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33,531 |
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|
26,442 |
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Fuel expense |
6,105 |
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5,634 |
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17,642 |
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|
16,786 |
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Other operating expenses |
32,025 |
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|
26,214 |
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|
93,045 |
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|
79,612 |
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Total operating expenses |
330,974 |
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301,496 |
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|
942,918 |
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|
877,341 |
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Income (loss) from operations: |
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Expedited LTL |
25,896 |
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|
23,724 |
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72,332 |
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|
71,023 |
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Intermodal |
6,900 |
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7,321 |
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18,326 |
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16,333 |
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Truckload Premium Services |
606 |
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1,673 |
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2,137 |
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3,348 |
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Pool Distribution |
1,867 |
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|
735 |
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4,685 |
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3,695 |
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Other operations |
(4,580 |
) |
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(3,574 |
) |
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(11,507 |
) |
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(7,415 |
) |
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Income from operations |
30,689 |
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|
29,879 |
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|
85,973 |
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|
86,984 |
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Other expense: |
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Interest expense |
(761 |
) |
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(472 |
) |
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(1,916 |
) |
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(1,327 |
) |
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Other, net |
1 |
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(1 |
) |
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(1 |
) |
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(2 |
) |
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Total other expense |
(760 |
) |
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(473 |
) |
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(1,917 |
) |
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(1,329 |
) |
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Income before income taxes |
29,929 |
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|
29,406 |
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84,056 |
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85,655 |
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Income tax expense |
7,734 |
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7,077 |
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21,124 |
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21,289 |
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Net income and comprehensive income |
$ |
22,195 |
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$ |
22,329 |
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$ |
62,932 |
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$ |
64,366 |
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Net income per share: |
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Basic |
$ |
0.78 |
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$ |
0.76 |
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$ |
2.20 |
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$ |
2.18 |
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Diluted |
$ |
0.78 |
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$ |
0.76 |
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$ |
2.19 |
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$ |
2.18 |
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Dividends per share: |
$ |
0.18 |
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$ |
0.15 |
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$ |
0.54 |
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$ |
0.45 |
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Expedited LTL Segment Information |
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(In millions) |
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(Unaudited) |
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Three months ended |
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September 30, |
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Percent of |
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September 30, |
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Percent of |
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Percent |
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2019 |
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Revenue |
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2018 |
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Revenue |
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Change |
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Change |
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Operating revenue |
$ |
210.1 |
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|
100.0 |
% |
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$ |
188.5 |
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|
100.0 |
% |
|
$ |
21.6 |
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|
11.5 |
% |
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Operating expenses: |
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Purchased transportation |
95.5 |
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|
45.5 |
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|
88.6 |
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|
47.0 |
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|
6.9 |
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|
7.8 |
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Salaries, wages and employee benefits |
47.9 |
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|
22.8 |
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|
41.6 |
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|
22.1 |
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|
6.3 |
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|
15.1 |
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Operating leases |
11.1 |
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|
5.3 |
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|
10.3 |
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|
5.5 |
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|
0.8 |
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|
7.8 |
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Depreciation and amortization |
5.2 |
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|
2.5 |
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|
5.6 |
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|
3.0 |
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|
(0.4 |
) |
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(7.1 |
) |
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Insurance and claims |
4.0 |
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|
1.9 |
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|
3.9 |
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|
2.1 |
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|
0.1 |
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|
2.6 |
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Fuel expense |
1.8 |
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|
0.9 |
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|
1.6 |
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|
0.8 |
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|
0.2 |
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|
12.5 |
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Other operating expenses |
18.7 |
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|
8.9 |
|
|
13.2 |
|
|
7.0 |
|
|
5.5 |
|
|
41.7 |
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Total operating expenses |
184.2 |
|
|
87.7 |
|
|
164.8 |
|
|
87.4 |
|
|
19.4 |
|
|
11.8 |
|
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Income from operations |
$ |
25.9 |
|
|
12.3 |
% |
|
$ |
23.7 |
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|
12.6 |
% |
|
$ |
2.2 |
|
|
9.3 |
% |
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Expedited LTL Operating Statistics |
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Three months ended |
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September 30, |
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September 30, |
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Percent |
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2019 |
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2018 |
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Change |
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Business days |
64 |
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|
63 |
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1.6 |
% |
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Tonnage |
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Total pounds ¹ |
613,812 |
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|
636,831 |
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(3.6 |
) |
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Pounds per day ¹ |
9,591 |
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|
10,108 |
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(5.1 |
) |
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Shipments |
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Total shipments ¹ |
977 |
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|
1,003 |
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(2.6 |
) |
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Shipments per day ¹ |
15.3 |
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|
15.9 |
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|
(4.1 |
) |
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Weight per shipment |
628 |
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|
635 |
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(1.1 |
) |
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Revenue per hundredweight |
$ |
27.65 |
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$ |
26.56 |
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|
4.1 |
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Revenue per hundredweight, ex fuel |
23.23 |
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|
22.31 |
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|
4.1 |
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|
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Revenue per shipment |
$ |
176 |
|
|
$ |
171 |
|
|
2.9 |
|
|
Revenue per shipment, ex fuel |
148 |
|
|
144 |
|
|
2.8 |
|
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|
|
|
|
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|
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Network revenue from door-to-door shipments as a percentage of network revenue 2,3 |
40.7 |
% |
|
35.3 |
% |
|
15.3 |
% |
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1 In thousands |
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2 Door-to-door shipments include all shipments with a pickup and/or delivery |
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3 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and final mile revenue |
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Intermodal Segment Information |
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(In millions) |
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(Unaudited) |
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Three months ended |
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September 30, |
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Percent of |
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September 30, |
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Percent of |
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|
Percent |
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|
2019 |
|
Revenue |
|
2018 |
|
Revenue |
|
Change |
|
Change |
|||||||||
|
Operating revenue |
$ |
58.3 |
|
|
100.0 |
% |
|
$ |
50.5 |
|
|
100.0 |
% |
|
$ |
7.8 |
|
|
15.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
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|
|||||||||
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Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
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Purchased transportation |
21.0 |
|
|
36.0 |
|
|
19.3 |
|
|
38.2 |
|
|
1.7 |
|
|
8.8 |
|
|||
|
Salaries, wages and employee benefits |
14.2 |
|
|
24.4 |
|
|
10.9 |
|
|
21.6 |
|
|
3.3 |
|
|
30.3 |
|
|||
|
Operating leases |
4.3 |
|
|
7.4 |
|
|
4.0 |
|
|
7.9 |
|
|
0.3 |
|
|
7.5 |
|
|||
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Depreciation and amortization |
2.6 |
|
|
4.5 |
|
|
1.5 |
|
|
3.0 |
|
|
1.1 |
|
|
73.3 |
|
|||
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Insurance and claims |
1.8 |
|
|
3.1 |
|
|
1.4 |
|
|
2.8 |
|
|
0.4 |
|
|
28.6 |
|
|||
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Fuel expense |
2.2 |
|
|
3.8 |
|
|
1.6 |
|
|
3.2 |
|
|
0.6 |
|
|
37.5 |
|
|||
|
Other operating expenses |
5.3 |
|
|
9.1 |
|
|
4.5 |
|
|
8.9 |
|
|
0.8 |
|
|
17.8 |
|
|||
|
Total operating expenses |
51.4 |
|
|
88.2 |
|
|
43.2 |
|
|
85.5 |
|
|
8.2 |
|
|
19.0 |
|
|||
|
Income from operations |
$ |
6.9 |
|
|
11.8 |
% |
|
$ |
7.3 |
|
|
14.5 |
% |
|
$ |
(0.4 |
) |
|
(5.5 |
)% |
|
Intermodal Operating Statistics |
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Three months ended |
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|
September 30, |
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September 30, |
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Percent |
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|
2019 |
|
2018 |
|
Change |
|||||
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|
|
|
|
|
|
|||||
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Drayage shipments |
84,230 |
|
|
75,981 |
|
|
10.9 |
% |
||
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Drayage revenue per shipment |
$ |
597 |
|
|
$ |
574 |
|
|
4.0 |
|
|
Number of locations |
21 |
|
|
19 |
|
|
10.5 |
% |
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Truckload Premium Services Segment Information |
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(In millions) |
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(Unaudited) |
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Three months ended |
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September 30, |
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Percent of |
|
September 30, |
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Percent of |
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|
|
Percent |
|||||||||
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|
2019 |
|
Revenue |
|
2018 |
|
Revenue |
|
Change |
|
Change |
|||||||||
|
Operating revenue |
$ |
45.5 |
|
|
100.0 |
% |
|
$ |
47.9 |
|
|
100.0 |
% |
|
$ |
(2.4 |
) |
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Purchased transportation |
34.5 |
|
|
75.8 |
|
|
35.8 |
|
|
74.7 |
|
|
(1.3 |
) |
|
(3.6 |
) |
|||
|
Salaries, wages and employee benefits |
4.3 |
|
|
9.5 |
|
|
4.7 |
|
|
9.8 |
|
|
(0.4 |
) |
|
(8.5 |
) |
|||
|
Operating leases |
0.4 |
|
|
0.9 |
|
|
0.1 |
|
|
0.2 |
|
|
0.3 |
|
|
300.0 |
|
|||
|
Depreciation and amortization |
1.2 |
|
|
2.6 |
|
|
1.5 |
|
|
3.1 |
|
|
(0.3 |
) |
|
(20.0 |
) |
|||
|
Insurance and claims |
1.3 |
|
|
2.9 |
|
|
1.2 |
|
|
2.5 |
|
|
0.1 |
|
|
8.3 |
|
|||
|
Fuel expense |
0.7 |
|
|
1.5 |
|
|
0.7 |
|
|
1.5 |
|
|
— |
|
|
— |
|
|||
|
Other operating expenses |
2.5 |
|
|
5.5 |
|
|
2.2 |
|
|
4.6 |
|
|
0.3 |
|
|
13.6 |
|
|||
|
Total operating expenses |
44.9 |
|
|
98.7 |
|
|
46.2 |
|
|
96.5 |
|
|
(1.3 |
) |
|
(2.8 |
) |
|||
|
Income from operations |
$ |
0.6 |
|
|
1.3 |
% |
|
$ |
1.7 |
|
|
3.5 |
% |
|
$ |
(1.1 |
) |
|
(64.7 |
)% |
|
Truckload Premium Services Operating Statistics |
||||||||||
|
|
|
|||||||||
|
|
Three months ended |
|||||||||
|
|
September 30, |
|
September 30, |
|
Percent |
|||||
|
|
2019 |
|
2018 |
|
Change |
|||||
|
|
|
|
|
|
|
|||||
|
Total Miles ¹ |
19,813 |
|
|
19,197 |
|
|
3.2 |
% |
||
|
Empty Miles Percentage |
7.7 |
% |
|
8.5 |
% |
|
(9.4 |
) |
||
|
Tractors (avg) |
391 |
|
|
291 |
|
|
34.4 |
|
||
|
Miles per tractor per week 2 |
2,006 |
|
|
2,317 |
|
|
(13.4 |
) |
||
|
|
|
|
|
|
|
|||||
|
Revenue per mile |
$ |
2.21 |
|
|
$ |
2.37 |
|
|
(6.8 |
) |
|
Cost per mile |
$ |
1.79 |
|
|
$ |
1.88 |
|
|
(4.8 |
)% |
|
|
||||||||||
|
1 In thousands |
||||||||||
|
2 Calculated using Company-employed driver and owner-operator miles |
||||||||||
|
Pool Distribution Segment Information |
||||||||||||||||||||
|
(In millions) |
||||||||||||||||||||
|
(Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Three months ended |
|||||||||||||||||||
|
|
September 30, |
|
Percent of |
|
September 30, |
|
Percent of |
|
|
|
Percent |
|||||||||
|
|
2019 |
|
Revenue |
|
2018 |
|
Revenue |
|
Change |
|
Change |
|||||||||
|
Operating revenue |
$ |
51.0 |
|
|
100.0 |
% |
|
$ |
47.3 |
|
|
100.0 |
% |
|
$ |
3.7 |
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Purchased transportation |
15.5 |
|
|
30.4 |
|
|
14.3 |
|
|
30.2 |
|
|
1.2 |
|
|
8.4 |
|
|||
|
Salaries, wages and employee benefits |
19.0 |
|
|
37.3 |
|
|
17.5 |
|
|
37.0 |
|
|
1.5 |
|
|
8.6 |
|
|||
|
Operating leases |
4.7 |
|
|
9.2 |
|
|
4.2 |
|
|
8.9 |
|
|
0.5 |
|
|
11.9 |
|
|||
|
Depreciation and amortization |
1.5 |
|
|
2.9 |
|
|
1.7 |
|
|
3.6 |
|
|
(0.2 |
) |
|
(11.8 |
) |
|||
|
Insurance and claims |
1.3 |
|
|
2.5 |
|
|
1.3 |
|
|
2.7 |
|
|
— |
|
|
— |
|
|||
|
Fuel expense |
1.5 |
|
|
2.9 |
|
|
1.6 |
|
|
3.4 |
|
|
(0.1 |
) |
|
(6.3 |
) |
|||
|
Other operating expenses |
5.6 |
|
|
11.0 |
|
|
6.0 |
|
|
12.7 |
|
|
(0.4 |
) |
|
(6.7 |
) |
|||
|
Total operating expenses |
49.1 |
|
|
96.3 |
|
|
46.6 |
|
|
98.5 |
|
|
2.5 |
|
|
5.4 |
|
|||
|
Income from operations |
$ |
1.9 |
|
|
3.7 |
% |
|
$ |
0.7 |
|
|
1.5 |
% |
|
$ |
1.2 |
|
|
171.4 |
% |
|
Pool Operating Statistics |
||||||||||
|
|
|
|||||||||
|
|
Three months ended |
|||||||||
|
|
September 30, |
|
September 30, |
|
Percent |
|||||
|
|
2019 |
|
2018 |
|
Change |
|||||
|
|
|
|
|
|
|
|||||
|
Cartons ¹ |
25,692 |
|
|
22,218 |
|
|
15.6 |
% |
||
|
Revenue per carton |
$ |
1.98 |
|
|
$ |
2.13 |
|
|
(7.0 |
) |
|
Terminals |
30 |
|
|
28 |
|
|
7.1 |
% |
||
|
|
|
|
|
|
|
|||||
|
1 In thousands |
|
|
|
|
|
|||||
|
Forward Air Corporation |
|||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(In thousands) |
|||||||
|
(Unaudited) |
|||||||
|
|
September 30,
|
|
December 31,
|
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
34,824 |
|
|
$ |
25,657 |
|
|
Accounts receivable, net |
157,494 |
|
|
156,359 |
|
||
|
Other current assets |
23,393 |
|
|
19,066 |
|
||
|
Total current assets |
215,711 |
|
|
201,082 |
|
||
|
|
|
|
|
||||
|
Property and equipment |
438,656 |
|
|
413,900 |
|
||
|
Less accumulated depreciation and amortization |
217,813 |
|
|
204,005 |
|
||
|
Total property and equipment, net |
220,843 |
|
|
209,895 |
|
||
|
Operating lease right-of-use assets |
158,977 |
|
|
— |
|
||
|
Goodwill and other acquired intangibles: |
|
|
|
||||
|
Goodwill |
220,423 |
|
|
199,092 |
|
||
|
Other acquired intangibles, net of accumulated amortization |
130,038 |
|
|
113,661 |
|
||
|
Total goodwill and other acquired intangibles, net |
350,461 |
|
|
312,753 |
|
||
|
Other assets |
34,641 |
|
|
36,485 |
|
||
|
Total assets |
$ |
980,633 |
|
|
$ |
760,215 |
|
|
|
|
|
|
||||
|
Liabilities and Shareholders’ Equity |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
32,599 |
|
|
$ |
34,630 |
|
|
Accrued expenses |
51,412 |
|
|
39,784 |
|
||
|
Other current liabilities |
7,049 |
|
|
— |
|
||
|
Current portion of debt and finance lease obligations |
1,578 |
|
|
309 |
|
||
|
Current portion of operating lease obligations |
47,137 |
|
|
— |
|
||
|
Total current liabilities |
139,775 |
|
|
74,723 |
|
||
|
|
|
|
|
||||
|
Debt and finance lease obligations, less current portion |
72,738 |
|
|
47,335 |
|
||
|
Operating lease obligations, less current portion |
112,553 |
|
|
— |
|
||
|
Other long-term liabilities |
51,316 |
|
|
47,739 |
|
||
|
Deferred income taxes |
43,106 |
|
|
37,174 |
|
||
|
|
|
|
|
||||
|
Shareholders’ equity: |
|
|
|
||||
|
Common stock |
279 |
|
|
285 |
|
||
|
Additional paid-in capital |
221,629 |
|
|
210,296 |
|
||
|
Retained earnings |
339,237 |
|
|
342,663 |
|
||
|
Total shareholders’ equity |
561,145 |
|
|
553,244 |
|
||
|
Total liabilities and shareholders’ equity |
$ |
980,633 |
|
|
$ |
760,215 |
|
|
Forward Air Corporation |
|||||||
|
Consolidated Statements of Cash Flows |
|||||||
|
(In thousands) |
|||||||
|
(Unaudited) |
|||||||
|
|
|
||||||
|
|
Three months ended |
||||||
|
|
September 30,
|
|
September 30,
|
||||
|
Operating activities: |
|
|
|
||||
|
Net income |
$ |
22,195 |
|
|
$ |
22,329 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
||||
|
Depreciation and amortization |
10,528 |
|
|
10,295 |
|
||
|
Change in fair value of earn-out liability |
890 |
|
|
(455 |
) |
||
|
Share-based compensation |
2,762 |
|
|
2,847 |
|
||
|
Loss on disposal of property and equipment, net |
1,098 |
|
|
120 |
|
||
|
Provision for loss (recovery) on receivables |
197 |
|
|
(509 |
) |
||
|
Provision for revenue adjustments |
963 |
|
|
1,092 |
|
||
|
Deferred income tax expense |
2,653 |
|
|
2,182 |
|
||
|
Changes in operating assets and liabilities |
|
|
|
||||
|
Accounts receivable |
(3,939 |
) |
|
3,345 |
|
||
|
Prepaid expenses and other current assets |
511 |
|
|
(1,241 |
) |
||
|
Income taxes |
(374 |
) |
|
(1,765 |
) |
||
|
Accounts payable and accrued expenses |
8,483 |
|
|
8,615 |
|
||
|
Net cash provided by operating activities |
45,967 |
|
|
46,855 |
|
||
|
|
|
|
|
||||
|
Investing activities: |
|
|
|
||||
|
Proceeds from disposal of property and equipment |
829 |
|
|
1,150 |
|
||
|
Purchases of property and equipment |
(10,504 |
) |
|
(16,738 |
) |
||
|
Acquisition of business, net of cash acquired |
(12,000 |
) |
|
(3,737 |
) |
||
|
Other |
— |
|
|
(9 |
) |
||
|
Net cash used in investing activities |
(21,675 |
) |
|
(19,334 |
) |
||
|
|
|
|
|
||||
|
Financing activities: |
|
|
|
||||
|
Payments of finance lease obligations |
(391 |
) |
|
(77 |
) |
||
|
Proceeds from senior credit facility |
10,000 |
|
|
— |
|
||
|
Proceeds from exercise of stock options |
785 |
|
|
2,570 |
|
||
|
Payments of cash dividends |
(5,088 |
) |
|
(4,385 |
) |
||
|
Repurchase of common stock (repurchase program) |
(9,289 |
) |
|
(16,820 |
) |
||
|
Cash settlement of share-based awards for tax withholdings |
(262 |
) |
|
— |
|
||
|
Net cash used in financing activities |
(4,245 |
) |
|
(18,712 |
) |
||
|
Net increase in cash |
20,047 |
|
|
8,809 |
|
||
|
Cash at beginning of period |
14,777 |
|
|
20,102 |
|
||
|
Cash at end of period |
$ |
34,824 |
|
|
$ |
28,911 |
|
|
Forward Air Corporation |
|||||||
|
Consolidated Statements of Cash Flows |
|||||||
|
(In thousands) |
|||||||
|
(Unaudited) |
|||||||
|
|
|
||||||
|
|
Nine months ended |
||||||
|
|
September 30,
|
|
September 30,
|
||||
|
Operating activities: |
|
|
|
||||
|
Net income |
$ |
62,932 |
|
|
$ |
64,366 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
||||
|
Depreciation and amortization |
32,036 |
|
|
31,346 |
|
||
|
Change in fair value of earn-out liability |
890 |
|
|
(455 |
) |
||
|
Share-based compensation |
9,006 |
|
|
7,525 |
|
||
|
Loss (gain) on disposal of property and equipment, net |
1,010 |
|
|
(14 |
) |
||
|
Provision for loss (recovery) on receivables |
828 |
|
|
(52 |
) |
||
|
Provision for revenue adjustments |
2,243 |
|
|
2,921 |
|
||
|
Deferred income tax expense |
5,931 |
|
|
6,676 |
|
||
|
Changes in operating assets and liabilities |
|
|
|
||||
|
Accounts receivable |
(4,206 |
) |
|
(3,386 |
) |
||
|
Prepaid expenses and other current assets |
(4,473 |
) |
|
(4,880 |
) |
||
|
Income taxes |
(2,556 |
) |
|
(3,193 |
) |
||
|
Accounts payable and accrued expenses |
14,090 |
|
|
12,991 |
|
||
|
Net cash provided by operating activities |
117,731 |
|
|
113,845 |
|
||
|
|
|
|
|
||||
|
Investing activities: |
|
|
|
||||
|
Proceeds from disposal of property and equipment |
2,101 |
|
|
5,989 |
|
||
|
Purchases of property and equipment |
(27,102 |
) |
|
(34,344 |
) |
||
|
Acquisition of business, net of cash acquired |
(39,000 |
) |
|
(3,737 |
) |
||
|
Other |
— |
|
|
(356 |
) |
||
|
Net cash used in investing activities |
(64,001 |
) |
|
(32,448 |
) |
||
|
|
|
|
|
||||
|
Financing activities: |
|
|
|
||||
|
Payments of finance lease obligations |
(528 |
) |
|
(228 |
) |
||
|
Proceeds from senior credit facility |
20,000 |
|
|
— |
|
||
|
Proceeds from exercise of stock options |
2,063 |
|
|
3,682 |
|
||
|
Payments of cash dividends |
(15,421 |
) |
|
(13,213 |
) |
||
|
Repurchase of common stock (repurchase program) |
(47,906 |
) |
|
(44,985 |
) |
||
|
Proceeds from common stock issued under employee stock purchase plan |
261 |
|
|
237 |
|
||
|
Cash settlement of share-based awards for tax withholdings |
(3,032 |
) |
|
(1,872 |
) |
||
|
Net cash used in financing activities |
(44,563 |
) |
|
(56,379 |
) |
||
|
Net increase in cash |
9,167 |
|
|
25,018 |
|
||
|
Cash at beginning of period |
25,657 |
|
|
3,893 |
|
||
|
Cash at end of period |
$ |
34,824 |
|
|
$ |
28,911 |
|
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 nine months ended September 30, 2019 and 2018; operating income growth before considering the net impact of increased vehicle reserve for the three months ended September 30, 2019; and free cash flow for the three and nine months ended September 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, as they eliminate the impact of investing activities.
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 excluding the increased vehicle reserve is useful to investors because it provides a view of the Company's operating income excluding the effects of a significant non-operation cost. 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 |
|
Nine months ended |
||||||||||||
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
||||||||
|
Net income |
$ |
22,195 |
|
|
$ |
22,329 |
|
|
$ |
62,932 |
|
|
$ |
64,366 |
|
|
Interest expense and other, net |
760 |
|
|
473 |
|
|
1,917 |
|
|
1,329 |
|
||||
|
Income tax expense |
7,734 |
|
|
7,077 |
|
|
21,124 |
|
|
21,289 |
|
||||
|
Depreciation and amortization |
10,528 |
|
|
10,295 |
|
|
32,036 |
|
|
31,346 |
|
||||
|
EBITDA |
$ |
41,217 |
|
|
$ |
40,174 |
|
|
$ |
118,009 |
|
|
$ |
118,330 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
||||||||
|
Net cash provided by operating activities |
$ |
45,967 |
|
|
$ |
46,855 |
|
|
$ |
117,731 |
|
|
$ |
113,845 |
|
|
Proceeds from disposal of property and equipment |
829 |
|
|
1,150 |
|
|
2,101 |
|
|
5,989 |
|
||||
|
Purchases of property and equipment |
(10,504 |
) |
|
(16,738 |
) |
|
(27,102 |
) |
|
(34,344 |
) |
||||
|
Free cash flow |
$ |
36,292 |
|
|
$ |
31,267 |
|
|
$ |
92,730 |
|
|
$ |
85,490 |
|
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 |
September 30, 2019 |
||
|
Net income |
$ |
22,195 |
|
|
Income allocated to participating securities |
(236 |
) |
|
|
Numerator for diluted income per share - net income |
$ |
21,959 |
|
|
|
|
||
|
Fully diluted share count |
28,082 |
|
|
|
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 fourth 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 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191024005834/en/
Forward Air Corporation
Michael J. Morris, 404-362-8933
mmorris@forwardair.com
Source: Forward Air Corporation
Released October 24, 2019