ex99_1.htm

Operating revenue for the quarter ended March 31, 2010 increased 10.8% to $107.0 million from $96.6 million for the first quarter of 2009. Income from operations was $6.1 million, compared with a $5.0 million loss from operations for the same quarter of 2009. As a percent of operating revenue, income from operations increased to 5.7%. Net income during the period increased by $6.5 million to $3.4 million from a $3.1 million net loss for the first quarter of 2009. Net income per diluted share for the first quarter of 2010 was $0.12 compared with a $0.11 net loss per share in the same quarter of 2009.

The first quarter of 2009 included a $7.2 million non-cash, pre-tax impairment charge. Excluding the $7.2 million non-cash, pre-tax impairment charge from the results of operations for the first quarter of 2009, income from operations for the first quarter of 2010 increased $4.0 million from $2.1 million for the first quarter of 2009, and net income for the first quarter of 2010 increased $2.2 million from $1.2 million for the first quarter of 2009. Similarly, earnings per diluted share for the first quarter of 2010 increased $0.08 compared to the adjusted earnings per diluted share of $0.04 for the first quarter of 2009.

“Our airport-to-airport network, Forward Air Complete pick-up and delivery as well as TLX expedited truckload brokerage were all solid contributors within our Forward Air, Inc. business segment. Our Forward Air Solutions pool distribution segment, while posting a loss for the first quarter, on the strength of better volumes did generate a profit in March. Since the first quarter is traditionally the weakest period, we are hopeful this may be a sign that the consumer is finally returning to retail sales.”

Commenting on the Company’s guidance for the second quarter, Rodney L. Bell, Senior Vice President and CFO, said, “Starting May 1, 2010 we will begin experiencing the benefit of a general rate increase on the linehaul portion of our airport-to-airport network. Inclusive of this partial quarter benefit, we anticipate that our second quarter 2010 revenues will increase in the range of 13 to 18% over the comparable 2009 period, and we expect income per diluted share to be between $0.20 and $0.24 per share.”

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.

Forward Air Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

	Three months ended
	March 31,			March 31,
	2010			2009
Operating revenue:
Forward Air
Airport-to-airport	$	70,888		$	63,055
Logistics		13,855			13,044
Other		5,875			5,867
Forward Air Solutions
Pool distribution		16,359			14,650
Total operating revenue		106,977			96,616

Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport		28,799			26,153
Logistics		10,768			10,279
Other		1,492			1,064
Forward Air Solutions
Pool distribution		3,442			2,632
Total purchased transportation		44,501			40,128
Salaries, wages and employee benefits		30,670			29,056
Operating leases		6,629			6,989
Depreciation and amortization		4,949			4,858
Insurance and claims		2,331			2,716
Fuel expense		2,058			1,682
Other operating expenses		9,784			9,056
Impairment of goodwill and other intangible assets		--			7,157
Total operating expenses		100,922			101,642
Income (loss) from operations		6,055			(5,026	)

Other income (expense):
Interest expense		(185	)		(141	)
Other, net		30			(22	)
Total other expense		(155	)		(163	)
Income (loss) before income taxes		5,900			(5,189	)
Income taxes		2,481			(2,085	)
Net income (loss)	$	3,419		$	(3,104	)

Net income (loss) per share:
Basic	$	0.12		$	(0.11	)
Diluted	$	0.12		$	(0.11	)
Weighted average shares outstanding:
Basic		28,951			28,906
Diluted		29,074			28,906

Dividends per share:	$	0.07		$	0.07

Forward Air Corporation
Reconciliation of U.S. GAAP Financial Results to Adjusted Financial Results
(In thousands, except per share data)
(Unaudited)

	Three months ended
							Adjusted
	March 31,			Impairment			March 31,
	2009 (1)			Charge			2009
(Loss) income from operations	$	(5,026	)	$	7,157		$	2,131

Income taxes		(2,085	)		(2,875	)		790

Net (loss) income		(3,104	)		4,282			1,178

Diluted/weighted average shares outstanding		28,906						28,963

Net (loss) income per share:	$	(0.11	)				$	0.04

(1) - As reported in accordance with United States generally accepted accounting principles.

Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

	March 31,		December 31,
	2010		2009 (a)
Assets
Current assets:
Cash	$	44,612	$	42,035
Accounts receivable, net		58,425		55,720
Other current assets		7,688		9,471
Total current assets		110,725		107,226

Property and equipment		208,654		204,716
Less accumulated depreciation and amortization		78,323		75,990
Total property and equipment, net		130,331		128,726
Goodwill and other acquired intangibles:
Goodwill		43,332		43,332
Other acquired intangibles, net		34,701		35,849
Total goodwill and other acquired intangibles		78,033		79,181
Other assets		1,534		1,597
Total assets	$	320,623	$	316,730

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	9,837	$	10,333
Accrued expenses		20,745		18,531
Current portion of debt and capital lease obligations		835		919
Total current liabilities		31,417		29,783

Debt and capital lease obligations, less current portion		51,992		52,169
Other long-term liabilities		4,623		4,485
Deferred income taxes		4,889		5,786

Shareholders’ equity:
Common stock		290		290
Additional paid-in capital		18,436		16,631
Retained earnings		208,976		207,586
Total shareholders’ equity		227,702		224,507
Total liabilities and shareholders’ equity	$	320,623	$	316,730

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Three Months Ended
	March 31,			March 31,
	2010			2009
Operating activities:
Net income (loss)	$	3,419		$	(3,104	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		4,949			4,858
Impairment of goodwill and other intangible assets		--			7,157
Share-based compensation		1,763			1,780
Loss on disposal of property and equipment		1			9
Provision for loss (recovery) on receivables		90			(35	)
Provision for revenue adjustments		423			794
Deferred income taxes		(873	)		(1,960	)
Tax benefit for stock options exercised		(4	)		--
Changes in operating assets and liabilities,
Accounts receivable		(3,218	)		8,006
Prepaid expenses and other current assets		1,786			705
Accounts payable and accrued expenses		1,856			(1,751	)
Net cash provided by operating activities		10,192			16,459

Investing activities:
Proceeds from disposal of property and equipment		20			127
Purchases of property and equipment		(5,426	)		(4,737	)
Other		39			(112	)
Net cash used in investing activities		(5,367	)		(4,722	)

Financing activities:
Payments of debt and capital lease obligations		(261	)		(336	)
Proceeds from exercise of stock options		38			--
Payments of cash dividends		(2,029	)		(2,025	)
Cash settlement of share-based awards for minimum tax withholdings		--			(228	)
Tax benefit for stock options exercised		4			--
Net cash used in financing activities		(2,248	)		(2,589	)
Net increase in cash		2,577			9,148
Cash at beginning of period		42,035			22,093
Cash at end of period	$	44,612		$	31,241

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)

	Three months ended
	March 31,			Percent of		March 31,			Percent of						Percent
	2010			Revenue		2009			Revenue			Change			Change
Operating revenue
Forward Air	$	90.9		85.0	%	$	82.1		85.0		%	$	8.8		10.7		%
FASI		16.4		15.3			14.8		15.3				1.6		10.8
Intercompany Eliminations		(0.3	)	(0.3	)		(0.3	)	(0.3	)			--		--
Total		107.0		100.0			96.6		100.0				10.4		10.8

Purchased transportation
Forward Air		41.1		45.2			37.6		45.8				3.5		9.3
FASI		3.7		22.6			2.8		19.0				0.9		32.1
Intercompany Eliminations		(0.3	)	100.0			(0.3	)	100.0				--		--
Total		44.5		41.6			40.1		41.5				4.4		11.0

Salaries, wages and employee benefits
Forward Air		23.4		25.7			21.5		26.2				1.9		8.8
FASI		7.3		44.5			7.6		51.3				(0.3	)	(3.9	)
Total		30.7		28.7			29.1		30.1				1.6		5.5

Operating leases
Forward Air		4.5		5.0			4.8		5.8				(0.3	)	(6.3	)
FASI		2.1		12.8			2.2		14.8				(0.1	)	(4.5	)
Total		6.6		6.2			7.0		7.2				(0.4	)	(5.7	)

Depreciation and amortization
Forward Air		4.0		4.4			3.9		4.8				0.1		2.6
FASI		0.9		5.5			0.9		6.1				--		--
Total		4.9		4.6			4.8		5.0				0.1		2.1

Insurance and claims
Forward Air		1.8		2.0			2.2		2.7				(0.4	)	(18.2	)
FASI		0.5		3.0			0.5		3.4				--		--
Total		2.3		2.1			2.7		2.8				(0.4	)	(14.8	)

Fuel expense
Forward Air		0.9		1.0			0.7		0.9				0.2		28.6
FASI		1.2		7.3			1.0		6.8				0.2		20.0
Total		2.1		2.0			1.7		1.8				0.4		23.5

Other operating expenses
Forward Air		8.0		8.8			7.4		9.0				0.6		8.1
FASI		1.8		11.0			1.6		10.8				0.2		12.5
Total		9.8		9.1			9.0		9.3				0.8		8.9

Impairment of goodwill and other intangible assets
Forward Air		--		--			0.2		0.2				(0.2	)	(100.0	)
FASI		--		--			7.0		47.3				(7.0	)	(100.0	)
Total		--		--			7.2		7.5				(7.2	)	(100.0	)

Income (loss) from operations
Forward Air		7.2		7.9			3.8		4.6				3.4		89.5
FASI		(1.1	)	(6.7	)		(8.8	)	(59.5	)			7.7		(87.5	)
Total	$	6.1		5.7	%	$	(5.0	)	(5.2	)	%	$	11.1		(222.0	)	%

Forward Air Corporation
Forward Air Inc. Operating Statistics

	Three months ended
	March 31,			March 31,			Percent
	2010			2009			Change
Operating ratio		92.1	%		95.4	%	(3.5	)	%

Business days		63.0			63.0		--
Business weeks		12.6			12.6		--


Airport-to-airport:
Tonnage
Total pounds ¹		378,625			338,602		11.8
Average weekly pounds ¹		30,050			26,873		11.8

Linehaul shipments
Total linehaul		546,313			502,890		8.6
Average weekly		43,358			39,912		8.6

Forward Air Complete shipments		69,106			53,889		28.2
As a percentage of linehaul shipments		12.6	%		10.7	%	17.8

Average linehaul shipment size		693			673		3.0

Revenue per pound ²
Linehaul yield	$	15.93		$	16.61		(3.6	)
Fuel surcharge impact		1.09			0.73		1.9
Forward Air Complete impact		1.74			1.32		2.2
Total airport-to-airport yield	$	18.76		$	18.66		0.5


Logistics:
Miles
Owner operator ¹		5,937			5,594		6.1
Third party ¹		2,738			2,621		4.5
Total Miles		8,675			8,215		5.6

Revenue per mile	$	1.61		$	1.61		--

Cost per mile	$	1.24		$	1.25		(0.8	)	%

¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.

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.