Forward Air Corporation Reports Third Quarter 2011 Results

GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NASDAQ:FWRD) today reported revenue, operating income, net income and diluted earnings per share for the third quarter and nine months ended September 30, 2011.

Operating revenue for the quarter ended September 30, 2011 increased 11.7% to $135.7 million from $121.5 million for the same quarter in 2010. Income from operations was $20.3 million for the third quarter of 2011, compared with $15.5 million in the prior-year quarter. As a percent of operating revenue, income from operations increased to 15.0% in the third quarter of 2011 from 12.8% for the same quarter last year. Net income during the third quarter of 2011 increased to $12.9 million from $8.9 million in the prior-year quarter. Income per diluted share for the third quarter of 2011 was $0.44 compared with $0.31 in the prior-year quarter.

Operating revenue for the nine months ended September 30, 2011 increased 10.7% to $388.1 million from $350.6 million for the same period in 2010. Income from operations was $53.5 million for the first nine months of 2011, compared with $35.1 million in the prior-year period. As a percent of operating revenue, income from operations increased to 13.8% for the nine months ended September 30, 2011 from 10.0% for the same period in 2010. Net income during the period was $32.8 million compared to $20.2 million in the prior-year period. Income per diluted share for the nine months ended September 30, 2011 was $1.11 compared with $0.69 in the prior-year period.

Bruce A. Campbell, Chairman, President, and CEO, commenting on the third quarter said, “We are pleased to announce another quarter of outstanding operating performance. As compared to the third quarter of 2010, our nearly 12% increase in operating revenue translated to approximately 34% of incremental profit, once again demonstrating the significant leverage of our operating model.”

Commenting further, Mr. Campbell said, “We started the quarter with some intermittent softness in network volumes. Over the course of the quarter, tonnage firmed up very nicely ending the quarter with system tonnage up 9.5% for the month of September as compared to September one year ago. We would characterize current volume trends as being moderately better than normal seasonality.”

In closing, Mr. Campbell said, “As always, I would like to express my gratitude for the ongoing efforts of our employees and independent contractors whose hard work made these results possible.”

Also commenting on the quarter, Rodney L. Bell, Senior Vice President and CFO said, “Cash for the quarter declined $8.7 million to $87.5 million. Cash flow from operations was an impressive $22.3 million in the third quarter of 2011 as compared to $19.0 million in the third quarter of 2010. Toward the end of the quarter, we took advantage of our undervalued stock price to repurchase 904,729 shares of our company stock for $24.3 million with an average share price of $26.88.”

Commenting further, Mr. Bell said, “Included in our third quarter results we booked an approximately $0.02 per share benefit related to federal income taxes. This resulted primarily from the reinstatement of an expired alternative energy tax credit related to our use of propane. The credit, covering 2010 and year to date through the third quarter 2011, was for approximately $0.6 million. We anticipate our fourth quarter 2011 tax rate to be approximately 39.5%.”

Commenting on the Company’s guidance for the fourth quarter, Mr. Bell said, “We anticipate that our fourth quarter 2011 revenues will increase in the range of 10% to 14% over the comparable 2010 period, and we expect income per diluted share to be between $0.47 and $0.51 per share. This compares to $0.41 per share in the fourth quarter of 2010.”

Review of Financial Results

Forward Air will hold a conference call to discuss third quarter 2011 results on Thursday, October 20, 2011 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800.230.1085. A replay of the conference call will be available at www.forwardair.com beginning shortly after the completion of the live call.

About Forward Air Corporation

Forward Air Corporation operates two business segments, Forward Air, Inc. and Forward Air Solutions, Inc.

Forward Air, Inc. is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of terminals located on or near major airports in 85 cities in the United States and Canada. It provides these services as a cost-effective alternative to air transportation of cargo that must be delivered at a specific time but is relatively less time-sensitive than traditional air freight or when air transportation is not economical.

Forward Air Solutions, Inc. is a provider of pool distribution services. Pool distribution involves the consolidation and shipment of several smaller less-than-truckload shipments to a common area or region. Once at the regional destination, the loads are deconsolidated, then grouped with other shipments with common delivery points, and delivered in a very precise, time-sensitive manner. Our pool distribution network consists of terminals and service locations in 19 cities within the Mid-Atlantic, Southeast, Midwest and Southwestern United States.

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 19, 2011