Forward
Air Corporation
|
||||||||||||||||
Condensed
Consolidated Statements of Income
|
||||||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
months ended
|
Six
months ended
|
|||||||||||||||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Operating
revenue:
|
||||||||||||||||
Forward
Air
|
||||||||||||||||
Airport-to-airport
|
$ | 89,187 | $ | 77,237 | $ | 171,246 | $ | 151,458 | ||||||||
Logistics
|
14,838 | 10,680 | 27,091 | 18,865 | ||||||||||||
Other
|
6,188 | 5,230 | 11,977 | 10,178 | ||||||||||||
Forward
Air Solutions
|
||||||||||||||||
Pool
distribution
|
11,350 | -- | 19,187 | -- | ||||||||||||
Total
operating revenue
|
121,563 | 93,147 | 229,501 | 180,501 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Purchased
transportation
|
||||||||||||||||
Forward
Air
|
||||||||||||||||
Airport-to-airport
|
33,472 | 29,739 | 65,011 | 60,271 | ||||||||||||
Logistics
|
10,818 | 8,150 | 19,998 | 14,296 | ||||||||||||
Other
|
1,572 | 1,477 | 3,205 | 2,773 | ||||||||||||
Forward
Air Solutions
|
||||||||||||||||
Pool
distribution
|
2,069 | -- | 3,242 | -- | ||||||||||||
Total
purchased transportation
|
47,931 | 39,366 | 91,456 | 77,340 | ||||||||||||
Salaries,
wages and employee benefits
|
29,404 | 19,964 | 55,851 | 38,977 | ||||||||||||
Operating
leases
|
5,884 | 3,882 | 10,735 | 7,617 | ||||||||||||
Depreciation
and amortization
|
3,998 | 2,494 | 7,696 | 4,874 | ||||||||||||
Insurance
and claims
|
1,614 | 1,900 | 3,874 | 3,602 | ||||||||||||
Fuel
expense
|
3,289 | 271 | 5,413 | 509 | ||||||||||||
Other
operating expenses
|
9,181 | 6,957 | 17,564 | 13,429 | ||||||||||||
Total
operating expenses
|
101,301 | 74,834 | 192,589 | 146,348 | ||||||||||||
Income
from operations
|
20,262 | 18,313 | 36,912 | 34,153 | ||||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
expense
|
(328 | ) | (41 | ) | (629 | ) | (81 | ) | ||||||||
Other,
net
|
56 | 469 | 210 | 1,221 | ||||||||||||
Total
other income (expense)
|
(272 | ) | 428 | (419 | ) | 1,140 | ||||||||||
Income
before income taxes
|
19,990 | 18,741 | 36,493 | 35,293 | ||||||||||||
Income
taxes
|
7,888 | 7,266 | 14,383 | 13,525 | ||||||||||||
Net
income
|
$ | 12,102 | $ | 11,475 | $ | 22,110 | $ | 21,768 | ||||||||
Net
income per share:
|
||||||||||||||||
Basic
|
$ | 0.42 | $ | 0.38 | $ | 0.77 | $ | 0.72 | ||||||||
Diluted
|
$ | 0.42 | $ | 0.38 | $ | 0.76 | $ | 0.72 | ||||||||
Dividends
|
$ | 0.07 | $ | 0.07 | $ | 0.14 | $ | 0.14 | ||||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
28,805 | 29,805 | 28,737 | 30,070 | ||||||||||||
Diluted
|
29,126 | 30,162 | 29,041 | 30,412 |
Forward
Air Corporation
|
||||||||
Condensed
Consolidated Balance Sheet
|
||||||||
(In
thousands, except per share data)
|
||||||||
(Unaudited)
|
||||||||
June
30,
|
December
31,
|
|||||||
2008
|
2007
(a)
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
|
$ | 1,082 | $ | 4,909 | ||||
Accounts
receivable, net
|
75,973 | 59,734 | ||||||
Other
current assets
|
9,153 | 6,807 | ||||||
Total
current assets
|
86,208 | 71,450 | ||||||
Property
and equipment
|
160,988 | 158,354 | ||||||
Less
accumulated depreciation and amortization
|
57,240 | 55,322 | ||||||
Total
property and equipment, net
|
103,748 | 103,032 | ||||||
Goodwill
and other acquired intangibles:
|
||||||||
Goodwill
|
45,045 | 36,053 | ||||||
Other
acquired intangibles, net
|
37,067 | 29,991 | ||||||
Total
goodwill and other acquired intangibles
|
82,112 | 66,044 | ||||||
Other
assets
|
1,955 | 1,358 | ||||||
Total
assets
|
$ | 274,023 | $ | 241,884 | ||||
Liabilities
and Shareholders’ Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 13,512 | $ | 11,714 | ||||
Accrued
expenses
|
16,688 | 14,274 | ||||||
Current
portion of debt and capital lease obligations
|
592 | 830 | ||||||
Total
current liabilities
|
30,792 | 26,818 | ||||||
Debt
and capital lease obligations, less current portion
|
36,441 | 31,486 | ||||||
Other
long-term liabilities
|
2,740 | 4,476 | ||||||
Deferred
income taxes
|
8,138 | 7,371 | ||||||
Shareholders’
equity:
|
||||||||
Common
stock
|
288 | 286 | ||||||
Additional
paid-in capital
|
6,106 | -- | ||||||
Retained
earnings
|
189,518 | 171,447 | ||||||
Total
shareholders’ equity
|
195,912 | 171,733 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 274,023 | $ | 241,884 |
Forward
Air Corporation
|
||||||||
Condensed
Consolidated Statement of Cash Flows
|
||||||||
(In
thousands)
|
||||||||
(Unaudited)
|
||||||||
Six
months ended
|
||||||||
June
30,
|
June
30,
|
|||||||
2008
|
2007
|
|||||||
Operating
activities:
|
||||||||
Net
Income
|
$ | 22,110 | $ | 21,768 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
Depreciation
and amortization
|
7,696 | 4,874 | ||||||
Share-based
compensation
|
3,120 | 1,483 | ||||||
Loss
(gain) on sale of property and equipment
|
21 | (235 | ) | |||||
Provision
for loss (recovery) on receivables
|
113 | (114 | ) | |||||
Provision
for revenue adjustments
|
1,904 | 1,165 | ||||||
Deferred
income taxes
|
1,428 | 1,514 | ||||||
Tax
benefit for stock options exercised
|
(1,079 | ) | (8 | ) | ||||
Changes
in operating assets and liabilities
|
||||||||
Accounts
receivable
|
(18,301 | ) | (4,312 | ) | ||||
Prepaid
expenses and other current assets
|
(2,371 | ) | 1,347 | |||||
Accounts
payable and accrued expenses
|
2,514 | (2,240 | ) | |||||
Net
cash provided by operating activities
|
17,155 | 25,242 | ||||||
Investing
activities:
|
||||||||
Proceeds
from disposal of property and equipment
|
33 | 273 | ||||||
Purchases
of property and equipment
|
(5,355 | ) | (38,535 | ) | ||||
Proceeds
from sales or maturities of available-for-sale securities
|
-- | 126,635 | ||||||
Purchases
of available-for-sale securities
|
-- | (75,560 | ) | |||||
Acquisition
of business
|
(18,646 | ) | -- | |||||
Other
|
(93 | ) | (676 | ) | ||||
Net
cash (used in) provided by investing activities
|
(24,061 | ) | 12,137 | |||||
Financing
activities
|
||||||||
Payments
on debt and capital lease obligations
|
(870 | ) | (19 | ) | ||||
Borrowings
on line of credit
|
30,000 | -- | ||||||
Payments
on line of credit
|
(25,000 | ) | -- | |||||
Proceeds
from exercise of stock options
|
2,138 | 275 | ||||||
Payments
of cash dividends
|
(4,036 | ) | (4,222 | ) | ||||
Common
stock issued under employee stock purchase plan
|
145 | 138 | ||||||
Repurchase
of common stock
|
-- | (31,220 | ) | |||||
Cash
settlement of share-based awards for minimum tax
withholdings
|
(377 | ) | (234 | ) | ||||
Tax
benefit for stock options exercised
|
1,079 | 8 | ||||||
Net
cash provided by (used in) financing activities
|
3,079 | (35,274 | ) | |||||
Net
(decrease) increase in cash
|
(3,827 | ) | 2,105 | |||||
Cash
at beginning of period
|
4,909 | 8,231 | ||||||
Cash
at end of period
|
$ | 1,082 | $ | 10,336 |
Forward
Air Corporation
|
||||||||||||
Segment
Information
|
||||||||||||
(In
millions)
|
||||||||||||
(Unaudited)
|
||||||||||||
Three
months ended
|
||||||||||||
June
30,
|
Percent
of
|
June
30,
|
Percent
of
|
|||||||||
2008
|
Revenue
|
2007
|
Revenue
|
|||||||||
Operating
revenue
|
||||||||||||
Forward
Air
|
$
|
110.9
|
91.2
|
%
|
$
|
93.1
|
100.0
|
%
|
||||
FASI
|
11.4
|
9.4
|
--
|
--
|
||||||||
Intercompany
Eliminations
|
(0.7
|
)
|
(0.6
|
)
|
--
|
--
|
||||||
Total
|
121.6
|
100.0
|
93.1
|
100.0
|
||||||||
Purchased
transportation
|
||||||||||||
Forward
Air
|
45.9
|
41.4
|
39.4
|
42.3
|
||||||||
FASI
|
2.7
|
23.7
|
--
|
--
|
||||||||
Intercompany
Eliminations
|
(0.7
|
)
|
100.0
|
--
|
--
|
|||||||
Total
|
47.9
|
39.4
|
39.4
|
42.3
|
||||||||
Salaries,
wages and employee benefits
|
||||||||||||
Forward
Air
|
24.7
|
22.3
|
19.9
|
21.4
|
||||||||
FASI
|
4.7
|
41.2
|
--
|
--
|
||||||||
Total
|
29.4
|
24.2
|
19.9
|
21.4
|
||||||||
Operating
leases
|
||||||||||||
Forward
Air
|
4.6
|
4.2
|
3.9
|
4.2
|
||||||||
FASI
|
1.3
|
11.4
|
--
|
--
|
||||||||
Total
|
5.9
|
4.8
|
3.9
|
4.2
|
||||||||
Depreciation
and amortization
|
||||||||||||
Forward
Air
|
3.6
|
3.2
|
2.5
|
2.7
|
||||||||
FASI
|
0.4
|
3.5
|
--
|
--
|
||||||||
Total
|
4.0
|
3.3
|
2.5
|
2.7
|
||||||||
Insurance
and claims
|
||||||||||||
Forward
Air
|
1.6
|
1.4
|
1.9
|
2.0
|
||||||||
FASI
|
--
|
--
|
--
|
--
|
||||||||
Total
|
1.6
|
1.3
|
1.9
|
2.0
|
||||||||
Fuel
expense
|
||||||||||||
Forward
Air
|
1.8
|
1.6
|
0.3
|
0.3
|
||||||||
FASI
|
1.5
|
13.2
|
--
|
--
|
||||||||
Total
|
3.3
|
2.7
|
0.3
|
0.3
|
||||||||
Other
operating expenses
|
||||||||||||
Forward
Air
|
8.0
|
7.2
|
6.9
|
7.4
|
||||||||
FASI
|
1.2
|
10.5
|
--
|
--
|
||||||||
Total
|
9.2
|
7.6
|
6.9
|
7.4
|
||||||||
Income
(loss) from operations
|
||||||||||||
Forward
Air
|
20.7
|
18.7
|
18.3
|
19.7
|
||||||||
FASI
|
(0.4
|
)
|
(3.5
|
)
|
--
|
--
|
||||||
Total
|
$
|
20.3
|
16.7
|
%
|
$
|
18.3
|
19.7
|
%
|
Forward
Air Corporation
|
||||||||||||
Segment
Information
|
||||||||||||
(In
millions)
|
||||||||||||
(Unaudited)
|
||||||||||||
Six
months ended
|
||||||||||||
June
30,
|
Percent
of
|
June
30,
|
Percent
of
|
|||||||||
2008
|
Revenue
|
2007
|
Revenue
|
|||||||||
Operating
revenue
|
||||||||||||
Forward
Air
|
$
|
211.2
|
92.0
|
%
|
$
|
180.5
|
100.0
|
%
|
||||
FASI
|
19.2
|
8.4
|
--
|
--
|
||||||||
Intercompany
Eliminations
|
(0.9
|
)
|
(0.4
|
)
|
--
|
--
|
||||||
Total
|
229.5
|
100.0
|
180.5
|
100.0
|
||||||||
Purchased
transportation
|
||||||||||||
Forward
Air
|
88.2
|
41.8
|
77.4
|
42.9
|
||||||||
FASI
|
4.1
|
21.4
|
--
|
--
|
||||||||
Intercompany
Eliminations
|
(0.9
|
)
|
100.0
|
--
|
--
|
|||||||
Total
|
91.4
|
39.8
|
77.4
|
42.9
|
||||||||
Salaries,
wages and employee benefits
|
||||||||||||
Forward
Air
|
47.3
|
22.4
|
38.9
|
21.6
|
||||||||
FASI
|
8.6
|
44.8
|
--
|
--
|
||||||||
Total
|
55.9
|
24.3
|
38.9
|
21.6
|
||||||||
Operating
leases
|
||||||||||||
Forward
Air
|
8.9
|
4.2
|
7.6
|
4.2
|
||||||||
FASI
|
1.8
|
9.4
|
--
|
--
|
||||||||
Total
|
10.7
|
4.7
|
7.6
|
4.2
|
||||||||
Depreciation
and amortization
|
||||||||||||
Forward
Air
|
7.0
|
3.3
|
4.9
|
2.7
|
||||||||
FASI
|
0.7
|
3.6
|
--
|
--
|
||||||||
Total
|
7.7
|
3.4
|
4.9
|
2.7
|
||||||||
Insurance
and claims
|
||||||||||||
Forward
Air
|
3.4
|
1.6
|
3.6
|
2.0
|
||||||||
FASI
|
0.5
|
2.6
|
--
|
--
|
||||||||
Total
|
3.9
|
1.7
|
3.6
|
2.0
|
||||||||
Fuel
expense
|
||||||||||||
Forward
Air
|
3.1
|
1.4
|
0.5
|
0.3
|
||||||||
FASI
|
2.3
|
12.0
|
--
|
--
|
||||||||
Total
|
5.4
|
2.4
|
0.5
|
0.3
|
||||||||
Other
operating expenses
|
||||||||||||
Forward
Air
|
15.4
|
7.3
|
13.4
|
7.4
|
||||||||
FASI
|
2.1
|
10.9
|
--
|
--
|
||||||||
Total
|
17.5
|
7.6
|
13.4
|
7.4
|
||||||||
Income
(loss) from operations
|
||||||||||||
Forward
Air
|
37.9
|
18.0
|
34.2
|
18.9
|
||||||||
FASI
|
(0.9
|
)
|
(4.7
|
)
|
--
|
--
|
||||||
Total
|
$
|
37.0
|
16.1
|
%
|
$
|
34.2
|
18.9
|
%
|