Exhibit 99.1

FORWARD AIR CORPORATION REPORTS
FOURTH QUARTER AND FISCAL 2008 RESULTS

GREENEVILLE, Tenn.—(BUSINESS WIRE) – February 9, 2009—Forward Air Corporation (NASDAQ:FWRD) today reported results for the fourth quarter and year ended December 31, 2008.

Operating revenue for the quarter ended December 31, 2008 increased 7.8% to $123.4 million from $114.5 million for the same quarter in 2007.  Income from operations was $14.0 million, compared with $20.0 million for the fourth quarter of 2007, a decrease of 30.0%.  As a percent of operating revenue, income from operations decreased to 11.3% from 17.5% for the same quarter last year.  Net income during the period decreased by $4.1 million, or 32.8%, to $8.3 million from $12.4 million in the fourth quarter of 2007.  Net income per diluted share for the fourth quarter of 2008 was $0.29 compared with $0.43 in the same quarter in 2007, a decrease of 32.6%.

Operating revenue for the year ended December 31, 2008 increased 20.8% to $474.4 million from $392.7 million for the same period in 2007.  Income from operations was $70.3 million, compared with $71.0 million in the prior-year period, a decrease of 1.0%.  As a percent of operating revenue, income from operations decreased to 14.8% for the year ended 2008 from 18.1% in 2007.  Net income during the period decreased 5.3% to $42.5 million from $44.9 million in the prior-year period.  Net income per diluted share from operations for the year ended 2008 was $1.47 compared with $1.50 for the year ended December 31, 2007, a decrease of 2.0%.
 
Bruce A. Campbell, Chairman, President, and CEO, said, "As noted in last months update we experienced an unprecedented decline in demand for our core airport-to-airport freight services during the fourth quarter 2008. This negative trend accelerated throughout the quarter with December volumes declining in excess of 20% from December of 2007. Thus far this year, volumes appear to have stabilized around negative 20% in our core business."
 
Commenting further, Mr. Campbell said, "In response to this dramatic decline in volume we have made further reductions in our work force, initiated an across the board salary and wage freeze, curtailed 2009 planned capital spending and continued to attack every expense line item in order to drive meaningful cost reductions. It is important to note that we have taken all of these measures without sacrificing the superior level of service that has differentiated Forward Air from our competitors. This is truly a testament to the dedication of our employees and independent owner operators and they have our sincerest appreciation."
 
In commenting on the fourth quarter, Rodney L. Bell, Senior Vice President and CFO, said “In the fourth quarter cash flow from operations was $21.1 million as compared to $18.6 million in the same quarter of 2007 further illustrating the strength of our non-asset model even in the most challenging of economic environments. As mentioned in our update, we ended the year with just over $22 million in cash and $42.2 million available on our $100 million line of credit.”

Commenting further, Mr. Bell said, “We anticipate first quarter year-over-year revenue in our Forward Air, Inc segment to decline between 10 and 15% while we expect revenue in our Forward Air Solutions segment to approximately double primarily on the strength of our two 2008 acquisitions. We anticipate income per diluted share to be between $0.10 and $0.15 per share.”

Review of Financial Results

Forward Air will hold a conference call to discuss fourth quarter 2008 results on Tuesday, February 10, 2009 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 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 82 terminals located on or near major airports 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 20 terminals within the Mid-Atlantic, Southeast, Midwest and Southwestern United States.
 
 

 
 
Consolidated Condensed Statements of Income
  
(In thousands, except per share data)
  
(Unaudited)
  
   
   
Three months ended
    
Year ended
  
   
December 31,
    
December 31,
    
December 31,
    
December 31,
  
   
2008
    
2007
    
2008
    
2007
  
Operating revenue:
                        
Forward Air
                        
   Airport-to-airport
   $ 77,713     $ 86,034     $ 334,860     $ 313,162  
   Logistics
     16,602       11,976       59,290       42,626  
   Other
     6,669       5,524       25,133       20,923  
Forward Air Solutions
                                
   Pool distribution
     22,468       10,956       55,153       16,026  
Total operating revenue
     123,452       114,490       474,436       392,737  
                                 
Operating expenses:
                                
Purchased transportation
                                
Forward Air
                                
   Airport-to-airport
     30,358       33,608       128,785       123,658  
   Logistics
     13,336       9,176       44,560       32,727  
   Other
     1,500       1,737       6,425       6,049  
Forward Air Solutions
                                
   Pool distribution
     3,551       1,292       9,315       2,003  
Total purchased transportation
     48,745       45,813       189,085       164,437  
Salaries, wages and employee benefits
     32,149       27,800       116,504       88,803  
Operating leases
     7,485       4,670       24,403       16,761  
Depreciation and amortization
     4,785       3,095       16,615       10,824  
Insurance and claims
     2,409       2,434       8,099       7,685  
Fuel expense
     2,999       1,334       11,465       2,421  
Other operating expenses
     10,834       9,353       37,980       30,758  
Total operating expenses
     109,406       94,499       404,151       321,689  
Income from operations
     14,046       19,991       70,285       71,048  
                                 
Other income (expense):
                                
   Interest expense
     (396 )     (355 )     (1,236 )     (491 )
   Other, net
     37       231       362       1,756  
Total other income (expense)
     (359 )     (124 )     (874 )     1,265  
Income before income taxes
     13,687       19,867       69,411       72,313  
Income taxes
     5,350       7,463       26,869       27,388  
Net income
   $ 8,337     $ 12,404     $ 42,542     $ 44,925  
                                 
Net income per share:
                                
Basic
   $ 0.29     $ 0.43     $ 1.48     $ 1.52  
Diluted
   $ 0.29     $ 0.43     $ 1.47     $ 1.50  
Weighted average shares outstanding:
                                
Basic
     28,889       28,832       28,808       29,609  
Diluted
     28,987       29,154       29,025       29,962  
                                 
Dividends per share:
   $ 0.07     $ 0.07     $ 0.28     $ 0.28  
 

 
2
 
 
Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
           
   
December 31,
    
December 31,
   
2008
    
2007 (a)
Assets
          
Current assets:
          
   Cash
   $ 22,093     $ 4,909
   Accounts receivable, net
     57,206       59,734
   Other current assets
     12,290       6,807
Total current assets
     91,589       71,450
               
Property and equipment
     186,377       158,354
Less accumulated depreciation and amortization
     63,401       55,322
Total property and equipment, net
     122,976       103,032
Goodwill and other acquired intangibles:
              
   Goodwill
     50,230       36,053
   Other acquired intangibles, net
     40,708       29,991
Total goodwill and other acquired intangibles
     90,938       66,044
Other assets
     2,024       1,358
Total assets
   $ 307,527     $ 241,884
               
               
               
Liabilities and Shareholders’ Equity
              
Current liabilities:
              
   Accounts payable
   $ 11,633     $ 11,714
   Accrued expenses
     12,927       14,274
   Current portion of debt and capital lease obligations
     1,602       830
Total current liabilities
     26,162       26,818
               
Debt and capital lease obligations, less current portion
     53,035       31,486
Other long-term liabilities
     3,055       4,476
Deferred income taxes
     8,841       7,371
               
Shareholders’ equity:
              
   Common stock
     289       286
   Additional paid-in capital
     10,249       --
   Retained earnings
     205,896       171,447
Total shareholders’ equity
     216,434       171,733
Total liabilities and shareholders’ equity
   $ 307,527     $ 241,884


(a) Taken from audited financial statements, which are not presented in their entirety
 
 
3

 
 
Condensed Consolidated Statements of Cash Flows
  
(In thousands)
  
(Unaudited)
  
             
   
Year ended
  
   
December 31,
    
December 31,
  
   
2008
    
2007
  
Operating activities:
            
Net income
   $ 42,542     $ 44,925  
Adjustments to reconcile net income to net cash provided by operating activities
                
   Depreciation and amortization
     16,615       10,824  
   Share-based compensation
     6,267       3,710  
   Loss (gain) on disposal of property and equipment
     171       (172 )
   Provision for loss (recovery) on receivables
     903       (33 )
   Provision for revenue adjustments
     4,259       2,312  
   Deferred income taxes
     1,151       596  
   Tax benefit for stock options exercised
     (1,030 )     (1,261 )
   Changes in operating assets and liabilities, net of acquisitions
                
      Accounts receivable
     (2,376 )     (11,474 )
      Prepaid expenses and other current assets
     (2,102 )     291  
      Accounts payable and accrued expenses
     (2,665 )     6,606  
      Income taxes
     (4,652 )     6,069  
Net cash provided by operating activities
     59,083       62,393  
                 
Investing activities:
                
Proceeds from disposal of property and equipment
     87       574  
Purchases of property and equipment
     (26,699 )     (47,026 )
Proceeds from sales or maturities of available-for-sale securities
     --       143,410  
Purchases of available-for-sale securities
     --       (82,282 )
Acquisition of businesses
     (29,329 )     (48,627 )
Other
     (247 )     (119 )
Net cash used in investing activities
     (56,188 )     (34,070 )
                 
Financing activities:
                
Payments of debt and capital lease obligations
     (1,603 )     (493 )
Borrowings on line of credit
     45,000       40,000  
Payments on line of credit
     (25,000 )     (10,000 )
Proceeds from exercise of stock options
     3,085       1,017  
Payments of cash dividends
     (8,089 )     (8,305 )
Proceeds from common stock issued under employee stock purchase plan
     255       259  
Cash settlement of share-based awards for minimum tax withholdings
     (389 )     (250 )
Repurchase of common stock
     --       (55,134 )
Tax benefit for stock options exercised
     1,030       1,261  
Net cash provided by (used in) financing activities
     14,289       (31,645 )
Net increase (decrease) in cash
     17,184       (3,322 )
Cash at beginning of period
     4,909       8,231  
Cash at end of period
   $ 22,093     $ 4,909  
 
 
 
4
 
 
Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
 
 
Three months ended
 
December 31,
  
Percent of
  
December 31,
  
Percent of
      
%
    
 
2008
  
Revenue
  
2007
  
Revenue
  
Change
  
Change
    
Operating revenue
                                
      Forward Air
$
101.4
  
82.2
%
$
103.6
  
90.5
%
$
(2.2
)
(2.1
)
%
      FASI
  
22.5
  
18.2
    
11.0
  
9.6
    
11.5
  
104.5
    
      Intercompany Eliminations
  
(0.5
)
(0.4
)
  
(0.1
)
(0.1
)
  
(0.4
)
400.0
    
            Total
  
123.4
  
100.0
    
114.5
  
100.0
    
8.9
  
7.8
    
                                 
Purchased transportation
                                
      Forward Air
  
45.3
  
44.7
    
44.5
  
43.0
    
0.8
  
1.8
    
      FASI
  
3.9
  
17.3
    
1.4
  
12.7
    
2.5
  
178.6
    
      Intercompany Eliminations
  
(0.5
)
100.0
    
(0.1
)
100.0
    
(0.4
)
400.0
    
            Total
  
48.7
  
39.5
    
45.8
  
40.0
    
2.9
  
6.3
    
                                 
Salaries, wages and employee benefits
                                
      Forward Air
  
22.2
  
21.9
    
23.2
  
22.4
    
(1.0
)
(4.3
)
  
      FASI
  
9.9
  
44.0
    
4.6
  
41.8
    
5.3
  
115.2
    
            Total
  
32.1
  
26.0
    
27.8
  
24.3
    
4.3
  
15.5
    
                                 
Operating leases
                                
      Forward Air
  
4.9
  
4.8
    
4.1
  
3.9
    
0.8
  
19.5
    
      FASI
  
2.6
  
11.6
    
0.6
  
5.5
    
2.0
  
333.3
    
            Total
  
7.5
  
6.1
    
4.7
  
4.1
    
2.8
  
59.6
    
                                 
Depreciation and amortization
                                
      Forward Air
  
3.8
  
3.7
    
2.9
  
2.8
    
0.9
  
31.0
    
      FASI
  
1.0
  
4.4
    
0.2
  
1.8
    
0.8
  
400.0
    
            Total
  
4.8
  
3.9
    
3.1
  
2.7
    
1.7
  
54.8
    
                                 
Insurance and claims
                                
      Forward Air
  
2.2
  
2.2
    
2.0
  
1.9
    
0.2
  
10.0
    
      FASI
  
0.2
  
0.9
    
0.4
  
3.6
    
(0.2
)
(50.0
)
  
            Total
  
2.4
  
2.0
    
2.4
  
2.1
    
--
  
--
    
                                 
Fuel expense
                                
      Forward Air
  
1.0
  
1.0
    
0.5
  
0.5
    
0.5
  
100.0
    
      FASI
  
2.0
  
8.9
    
0.8
  
7.3
    
1.2
  
150.0
    
            Total
  
3.0
  
2.4
    
1.3
  
1.1
    
1.7
  
130.8
    
                                 
Other operating expenses
                                
      Forward Air
  
8.5
  
8.4
    
8.2
  
7.9
    
0.3
  
3.7
    
      FASI
  
2.4
  
10.7
    
1.2
  
10.9
    
1.2
  
100.0
    
            Total
  
10.9
  
8.8
    
9.4
  
8.2
    
1.5
  
16.0
    
                                 
Income from operations
                                
      Forward Air
  
13.5
  
13.3
    
18.2
  
17.6
    
(4.7
)
(25.8
)
  
      FASI
  
0.5
  
2.2
    
1.8
  
16.4
    
(1.3
)
(72.2
)
  
            Total
$
14.0
  
11.3
%
$
20.0
  
17.5
%
$
(6.0
)
(30.0
)
%
 
 
 
5

 
Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
 
 
Year ended
 
December 31,
  
Percent of
  
December 31,
  
Percent of
      
%
    
 
2008
  
Revenue
  
2007
  
Revenue
  
Change
  
Change
    
Operating revenue
                                
      Forward Air
$
421.2
  
88.8
%
$
376.8
  
95.9
%
$
44.4
  
11.8
  
%
      FASI
  
55.3
  
11.6
    
16.0
  
4.1
    
39.3
  
245.6
    
      Intercompany Eliminations
  
(2.1
)
(0.4
)
  
(0.1
)
--
    
(2.0
)
(2,000.0
)
  
            Total
  
474.4
  
100.0
    
392.7
  
100.0
    
81.7
  
20.8
    
                                 
Purchased transportation
                                
      Forward Air
  
179.9
  
42.7
    
162.4
  
43.1
    
17.5
  
10.8
    
      FASI
  
11.2
  
20.2
    
2.1
  
13.1
    
9.1
  
433.3
    
      Intercompany Eliminations
  
(2.1
)
100.0
    
(0.1
)
100.0
    
(2.0
)
(2,000.0
)
  
            Total
  
189.0
  
39.9
    
164.4
  
41.9
    
24.6
  
15.0
    
                                 
Salaries, wages and employee benefits
                                
      Forward Air
  
92.5
  
22.0
    
82.0
  
21.8
    
10.5
  
12.8
    
      FASI
  
24.0
  
43.4
    
6.8
  
42.5
    
17.2
  
252.9
    
            Total
  
116.5
  
24.6
    
88.8
  
22.6
    
27.7
  
31.2
    
                                 
Operating leases
                                
      Forward Air
  
18.5
  
4.4
    
15.8
  
4.2
    
2.7
  
17.1
    
      FASI
  
5.9
  
10.7
    
1.0
  
6.3
    
4.9
  
490.0
    
            Total
  
24.4
  
5.1
    
16.8
  
4.3
    
7.6
  
45.2
    
                                 
Depreciation and amortization
                                
      Forward Air
  
14.4
  
3.4
    
10.4
  
2.8
    
4.0
  
38.5
    
      FASI
  
2.2
  
4.0
    
0.5
  
3.1
    
1.7
  
340.0
    
            Total
  
16.6
  
3.5
    
10.9
  
2.8
    
5.7
  
52.3
    
                                 
Insurance and claims
                                
      Forward Air
  
7.3
  
1.7
    
7.2
  
1.9
    
0.1
  
1.4
    
      FASI
  
0.8
  
1.4
    
0.5
  
3.1
    
0.3
  
60.0
    
            Total
  
8.1
  
1.7
    
7.7
  
1.9
    
0.4
  
5.2
    
                                 
Fuel expense
                                
      Forward Air
  
5.8
  
1.4
    
1.3
  
0.3
    
4.5
  
346.2
    
      FASI
  
5.7
  
10.3
    
1.1
  
6.9
    
4.6
  
418.2
    
            Total
  
11.5
  
2.4
    
2.4
  
0.6
    
9.1
  
379.2
    
                                 
Other operating expenses
                                
      Forward Air
  
32.1
  
7.6
    
29.0
  
7.7
    
3.1
  
10.7
    
      FASI
  
5.9
  
10.7
    
1.7
  
10.6
    
4.2
  
247.1
    
            Total
  
38.0
  
8.0
    
30.7
  
7.8
    
7.3
  
23.8
    
                                 
Income (loss) from operations
                                
      Forward Air
  
70.7
  
16.8
    
68.7
  
18.2
    
2.0
  
2.9
    
      FASI
  
(0.4
)
(0.7
)
  
2.3
  
14.4
    
(2.7
)
(117.4
)
  
            Total
$
70.3
  
14.8
%
$
71.0
  
18.1
%
$
(0.7
)
(1.0
)
%
 
 
 
6

 
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.

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