Exhibit 99.1
Logo


NEWS RELEASE


FORWARD AIR CORPORATION REPORTS
FIRST QUARTER 2007 RESULTS


GREENEVILLE, Tenn.—(BUSINESS WIRE)—April 23, 2007—Forward Air Corporation (NASDAQ:FWRD) today reported results for the first quarter ended March 31, 2007.

Operating revenue for the quarter ended March 31, 2007 increased 6.1% to $87.4 million from $82.3 million for the same quarter in 2006. Income from operations was $15.8 million, compared with $17.0 million in the prior-year quarter, a decrease of 6.5%. As a percent of operating revenue, income from operations declined to 18.2% from 20.7% for the same quarter last year. Net income for the quarter ended March 31, 2007 was $10.3 million, compared with $11.0 million in the prior-year quarter. Income per diluted share from operations for the first quarter of 2007 was $0.34 compared with $0.35 in the prior-year quarter, a decrease of 2.9%.

Bruce Campbell, President and CEO, commented, “Without question, the first quarter of 2007 presented many challenges for the Forward Air team. The chief challenge for our team was trying to effectively manage and control our purchased transportation costs in light of the difficult operating conditions. These increased costs drove lower operating margins for the quarter than we had anticipated. We have implemented new procedures which should result in an immediate improvement in our management of purchased transportation costs going forward.  Fortunately, our strict cost discipline in other key operating expense areas proved effective during the quarter despite the environment.”
 
Commenting further, “While our system weight volume for the quarter was flat, we continued to experience an increase in shipment count, which was effectively offset by a smaller average weight per shipment.  During the quarter, we were very encouraged by the results achieved and progress made in our 'Completing the Model' initiatives, especially our logistics initiative, which once again produced excellent results.”

Rodney L. Bell, Senior Vice President and CFO, said, “The Company’s cash flows from operations were strong in the first quarter generating $10.4 million, which was a 16.6% increase from the $8.9 million generated in the first quarter of 2006. We spent approximately $22.2 million in the quarter completing our Chicago facility and purchasing the land for our Dallas facility.”

Review of Financial Results

Forward Air will hold a conference call to discuss first quarter 2007 results on Tuesday, April 24, 2007 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800-841-9385. A replay of the conference call will be available at www.forwardair.com beginning shortly after completion of the live call.

About Forward Air

Forward Air is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of 81 terminals located on or near major airports in the United States and Canada.  The Company provides these services as a cost-effective alternative to air transportation of cargo that must be delivered at a specific time but is relatively less time-sensitive than traditional air freight or when air transportation is not economical.

 
 

FORWARD AIR CORPORATION
Condensed Statements of Income (Unaudited)
(In thousands, except per share data)
  
 
 
Three months ended
 
 
 
3/31/07
  
3/31/06
 
Operating revenue
 
$
87,353
 
$
82,330
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Purchased transportation
 
 
37,974
 
 
32,436
 
Salaries, wages and employee benefits
 
 
19,013
 
 
18,793
 
Operating leases
 
 
3,735
 
 
3,446
 
Depreciation and amortization
 
 
2,380
 
 
2,399
 
Insurance and claims
 
 
1,702
 
 
1,481
 
Other operating expenses
 
 
6,710
 
 
6,819
 
Total operating expenses
 
 
71,514
 
 
65,374
 
Income from operations
 
 
15,839
 
 
16,956
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Interest expense
 
 
(40
)
 
(25
)
Other, net
 
 
753
 
 
634
 
Total other income
 
 
713
 
 
609
 
Income before income taxes
 
 
16,552
 
 
17,565
 
Income taxes
 
 
6,259
 
 
6,557
 
Net income
 
$
10,293
 
$
11,008
 
 
 
 
 
 
 
 
 
Income per share:
 
 
 
 
 
 
 
Basic
 
$
0.34
 
$
0.35
 
Diluted
 
$
0.34
 
$
0.35
 


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FORWARD AIR CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except share data)
 
 
 
 3/31/07
 
 12/31/06
 
 
 
(Unaudited)
  
Audited (a)
 
Assets
 
 
  
 
 
  
 
Current assets:
 
 
  
 
 
  
 
Cash
 
$
5,435
 
$
8,231
 
Short-term investments
 
  
42,075
 
  
61,650
 
Accounts receivable, less allowance of $810 in 2007 and $860 in 2006
 
  
48,908
 
  
48,486
 
Other current assets
 
  
10,247
 
  
9,196
 
Total current assets
 
  
106,665
 
  
127,563
 
 
 
    
 
    
 
Property and equipment
 
  
126,356
 
  
101,190
 
Less accumulated depreciation and amortization
 
  
49,374
    
47,875
 
Total property and equipment, net
 
  
76,982
 
  
53,315
 
Goodwill and other acquired intangibles:
 
    
 
    
 
Goodwill
 
  
15,588
 
  
15,588
 
Other acquired intangibles, net of accumulated amortization of $2,338 in 2007 and $2,019 in 2006
 
  
10,912
 
  
10,731
 
Total goodwill and other acquired intangibles
 
  
26,500
 
  
26,319
 
Other assets
 
  
2,705
 
  
5,817
 
Total assets
 
$
212,852
 
$
213,014
 
 
 
    
 
    
 
Liabilities and Shareholders’ Equity
 
    
 
    
 
Current liabilities:
 
    
 
    
 
Accounts payable
 
$
6,777
 
$
7,949
 
Accrued expenses
 
  
9,905
 
  
11,144
 
Current portion of capital lease obligations
 
  
41
 
  
40
 
Total current liabilities
 
  
16,723
 
  
19,133
 
 
 
    
 
    
 
Capital lease obligations, less current portion
 
  
786
 
  
796
 
Other long-term liabilities
    
2,345
    
1,271
  
Deferred income taxes
 
  
7,558
 
  
6,587
 
 
 
    
 
    
 
Shareholders’ equity:
 
    
 
    
 
Common stock, $0.01 par value:
 
    
 
    
 
Authorized shares - 50,000,000
 
    
 
    
 
Issued and outstanding shares - 30,167,408 in 2007 and 30,372,082 in 2006
 
  
302
 
  
304
 
Retained earnings
 
  
185,138
 
  
184,923
 
Total shareholders’ equity
 
  
185,440
 
  
185,227
 
Total liabilities and shareholders’ equity
 
$
212,852
 
$
213,014
 
 
(a)
Taken from audited financial statements, which are not presented in their entirety.
 

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FORWARD AIR CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 
 
Three months ended 
 
    
3/31/07
    
3/31/06
  
Operating activities:
          
Net income
  
$
10,293
  
$
11,008
  
Adjustments to reconcile net income to net cash provided by operating activities:
              
Depreciation and amortization
    
2,380
    
2,399
  
Share-based compensation
    
593
    
224
  
Gain on sale of property and equipment
    
(62
)
  
(191
)
Provision for (recovery) loss on receivables
    
(93
)
  
39
  
Provision for revenue adjustments
    
655
    
593
  
Deferred income taxes
    
1,797
    
327
  
Increase in income taxes payable for stock options exercised
    
7
    
(394
)
Changes in operating assets and liabilities
              
Accounts receivable
    
(952
)
  
(1,013
)
Prepaid expenses and other current assets
    
(440
)
  
(128
)
Accounts payable and accrued expenses
    
(2,734
)
  
(5,682
)
Income taxes
    
(1,024
)
  
1,753
  
Net cash provided by operating activities
    
10,420
    
8,935
  
Investing activities:
              
Proceeds from disposal of property and equipment
    
188
    
3,105
  
Purchases of property and equipment
    
(22,570
)
  
(2,421
)
Proceeds from sales or maturities of available-for-sale securities
    
64,095
    
45,700
  
Purchases of available-for-sale securities
    
(44,520
)
  
(46,155
)
Other
    
(704
)
  
(25
)
Net cash (used in) provided by investing activities
    
(3,511
)
  
204
  
Financing activities:
              
Payments of capital lease obligations
    
(9
)
  
(9
)
Payments on line of credit
    
--
    
(1,504
)
Proceeds from exercise of stock options
    
196
    
1,431
  
Payments of cash dividends
    
(2,127
)
  
(2,200
)
Repurchase of common stock
    
(7,538
)
  
(4,400
)
Cash settlement of share-based awards for minimum tax withholdings
    
(220
)
  
--
  
Increase in income taxes payable for stock options exercised
    
(7
)
  
394
  
Net cash used in financing activities
    
(9,705
)
  
(6,288
)
Net (decrease) increase in cash
    
(2,796
)
  
2,851
  
Cash at beginning of period
    
8,231
    
332
  
Cash at end of period
  
$
5,435
  
$
3,183
  
 
 
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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.

-END-

CONTACT:
Forward Air Corporation
Rodney L. Bell, 423-636-7000
rbell@forwardair.com
 

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