NEWS RELEASE

FORWARD AIR CORPORATION REPORTS

SECOND QUARTER 2015 RESULTS

GREENEVILLE, Tenn.- (BUSINESS WIRE) - July 21, 2015 - Forward Air Corporation (NASDAQ:FWRD) today reported operating revenue, income from operations, net income and diluted earnings per share for the three and six months ended June 30, 2015.

Operating revenue for the quarter ended June 30, 2015 increased 28.8% to $249.7 million from $193.9 million for the same quarter in 2014. Income from operations was $19.9 million, compared to $27.6 million in the prior-year quarter. Net income during the period was $11.8 million compared to $17.2 million in the second quarter of 2014. Net income per diluted share for the second quarter of 2015 was $0.38 compared to $0.55 in the prior-year quarter.

Included in the second quarter 2015 are approximately $6.9 million in deal and integration costs associated with the acquisition of Towne Air. Adjusted income from operations was $26.8 million, compared with $27.6 million in the prior-year quarter. Adjusted net income for the period was $16.0 million compared to $17.2 million in the prior year quarter. Adjusted income per diluted share was $0.51 compared to $0.55 a year ago.

Operating revenue for the six months ended June 30, 2015 increased 24.7% to $455.6 million from $365.4 million for the same period in 2014. Income from operations was $28.2 million, compared with $43.9 million in the prior-year period. As a percent of operating revenue, income from operations was 6.2%, compared with 12.0% in the same period last year. Net income during the period was $16.7 million compared to $27.4 million in the prior-year period. Income per diluted share for the six months ended June 30, 2015 was $0.53 compared with $0.87 in the prior-year period.

 

Included in the six months ended June 30, 2015 are approximately $18.7 million in deal and integration costs associated with the acquisition of Towne Air. Adjusted income from operations was $46.9 million, compared with $44.8 million for the same period of 2014. Adjusted net income for the period was $28.1 million compared to $28.0 million in 2014. Adjusted income per diluted share was $0.90 compared to $0.89 a year ago.

Bruce A. Campbell, Chairman, President, and CEO, commenting on the second quarter said, “With the full quarter benefit of our acquisition of Towne Air Freight we are pleased to report achieving a $1 billion revenue run rate. Since our March 9, 2015 acquisition of Towne, our primary focus has been to minimize revenue attrition, maximize the retention of owner-operators and most importantly provide superior service to both our existing as well as our new customers. While we are pleased with how all three of these integration initiatives have progressed it’s fair to say we underestimated both the cost and time necessary to achieve them.”

Commenting further on the Towne integration, Mr. Campbell said, “We challenged our people to have the Towne integration completed prior to the end of the second quarter. At this time,we estimate that we are 85% to 90% there. Over the course of the third quarter we will continue to right size headcount, evaluate non-core service offerings, drive improvements in productivity and rebalance the network. While the Towne acquisition will definitely be a contributor to our second half 2015 results, it is important to understand the real value comes in our 2016 results and beyond.”

In closing, Mr. Campbell said, “As always I want to recognize the hard work and dedication of our employees and owner-operators. It’s their commitment that allowed us to provide industry leading service through the disruptions that always accompany a major integration.”

Commenting on the Company's guidance for the third quarter, Rodney L. Bell, Senior Vice President and CFO said, “We anticipate that our third quarter 2015 revenues will increase in the range of 23% to 27% over the comparable 2014 period. Without regard to additional costs of integration we expect income per diluted share to be between $0.58 and $0.62 per share. This compares to $0.54 per share in the third quarter of 2014.”

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Commenting further on the Company’s full year 2015 guidance Mr. Bell said, “Primarily due to the slower than anticipated integration of Towne Air we are reducing our full year 2015 earnings guidance to a range of $2.15 to $2.25 per share.

Review of Financial Results

Forward Air will hold a conference call to discuss second quarter 2015 results on Wednesday, July 22, 2015 at 9:00 a.m. EDT. The Company's conference call will be available online at www.forwardair.com or by dialing (800) 230-1074. 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 three business segments: Forward Air, Forward Air Solutions and Total Quality.

Through our Forward Air segment, we provide time-definite surface transportation and related logistics services to the North American expedited ground freight market. Our licensed property broker utilizes qualified motor carriers, including our own, and other third-party transportation companies, to offer our customers local pick-up and delivery (Forward Air Complete®) and scheduled surface transportation of cargo as a cost-effective, reliable alternative to air transportation. We transport cargo that must be delivered at a specific time but is less time-sensitive than traditional air freight. This type of cargo is frequently referred to in the transportation industry as deferred air freight. We also offer our customers an array of logistics and other services including: expedited full truckload (TLX); dedicated fleets; warehousing; customs brokerage; and shipment consolidation, deconsolidation and handling. Also included in the Forward Air segment are the services performed by Central States Trucking Co. and Central States Logistics, Inc. (“CST”), which we acquired in 2014. CST provides intermodal drayage, devanning, transloading and warehousing services.

Forward Air Solutions, which we formed in July 2007, provides pool distribution services throughout the Mid-Atlantic, Southeast, Midwest and Southwest continental United States. Pool distribution involves managing high-frequency, last mile handling and distribution of time-sensitive products to numerous destinations in specific geographic regions. Our primary customers for pool distribution are regional and nationwide distributors and specialty retailers, such as mall, strip mall and outlet-based retail chains.

Total Quality ("TQI"), which we acquired in March 2013, provides maximum security and temperature-controlled logistics services, primarily truckload services, to the life sciences sector (pharmaceutical and biotechnology products). In addition to core pharmaceutical services and other cold chain services, TQI provides truckload and less-than-truckload brokerage transportation services.

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Forward Air Corporation
Consolidated Statements of Comprehensive Income
(In thousands, except per share data)
(Unaudited)
	Three months ended								Six months ended
	June 30, 2015				June 30, 2014				June 30, 2015				June 30, 2014
Operating revenue	$	249,694			$	193,852			$	455,612			$	365,420
Operating expenses:
Purchased transportation	107,482				82,834				196,819				156,385
Salaries, wages and employee benefits	61,886				44,391				115,789				85,813
Operating leases	18,277				8,165				34,033				16,516
Depreciation and amortization	9,519				7,751				18,202				14,764
Insurance and claims	6,240				3,104				11,371				7,231
Fuel expense	4,188				5,172				8,208				9,977
Other operating expenses	22,194				14,840				43,033				30,868
Total operating expenses	229,786				166,257				427,455				321,554
Income from operations	19,908				27,595				28,157				43,866
Other income (expense):
Interest expense	(570		)		(101		)		(934		)		(183		)
Other, net	(89		)		112				(138		)		198
Total other income (expense)	(659		)		11				(1,072		)		15
Income before income taxes	19,249				27,606				27,085				43,881
Income taxes	7,425				10,428				10,425				16,502
Net income and comprehensive income	$	11,824			$	17,178			$	16,660			$	27,379
Net income per share:
Basic	$	0.38			$	0.56			$	0.54			$	0.89
Diluted	$	0.38			$	0.55			$	0.53			$	0.87
Dividends per share:	$	0.12			$	0.12			$	0.24			$	0.24

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Forward Air Corporation
Reconciliation to U.S. GAAP
(In millions, except per share data)
(Unaudited)
		Three months ended
						Integration and				Adjusted
		June 30, 2015 (1)				Deal Costs				June 30, 2015
Income from operations		$	19.9			$	6.9			$	26.8
Income taxes		7.4				2.7				10.1
Net income		$	11.8			$	4.2			$	16.0
Weighted average diluted shares outstanding		31,104				31,104				31,104
Net income per share:		$	0.38			$	0.14			$	0.51
(1) - As reported in accordance with United States generally accepted accounting principles.
		Three months ended
						Integration and				Adjusted
		June 30, 2014 (1)				Deal Costs				June 30, 2014
Income from operations		$	27.6			$	—			$	27.6
Income taxes		10.4				—				10.4
Net income		$	17.2			$	—			$	17.2
Weighted average diluted shares outstanding		31,408				—				31,408
Net income per share:		$	0.55			$	—			$	0.55
(1) - As reported in accordance with United States generally accepted accounting principles.

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Forward Air Corporation
Reconciliation to U.S. GAAP
(In millions, except per share data)
(Unaudited)
		Six months ended
						Integration and				Adjusted
		June 30, 2015 (1)				Deal Costs				June 30, 2015
Income from operations		$	28.2			$	18.7			$	46.9
Income taxes		10.4				7.3				17.7
Net income		$	16.7			$	11.4			$	28.1
Weighted average diluted shares outstanding		31,088				31,088				31,088
Net income per share:		$	0.53			$	0.37			$	0.90
(1) - As reported in accordance with United States generally accepted accounting principles.

		Six months ended
						Integration and				Adjusted
		June 30, 2014 (1)				Deal Costs				June 30, 2014
Income from operations		$	43.9			$	0.9			$	44.8
Income taxes		16.5				0.3				16.8
Net income		$	27.4			$	0.6			$	28.0
Weighted average diluted shares outstanding		31,364				31,364				31,364
Net income per share:		$	0.87			$	0.02			$	0.89
(1) - As reported in accordance with United States generally accepted accounting principles.

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Forward Air Corporation
Components of Consolidated Revenue and Purchased Transportation
(In millions)
(Unaudited)
	Three months ended
	June 30,			Percent of			June 30,			Percent of						Percent
	2015			Revenue			2014			Revenue			Change			Change
Operating Revenue
Forward Air
Airport-to-airport	$	140.9		66.7	%		$	108.0		70.0	%		$	32.9		30.5	%
Logistics services
Expedited full truckload - TLX	27.5			13.0			19.2			12.4			8.3			43.2
Intermodal/drayage	21.8			10.3			14.3			9.3			7.5			52.4
Total Logistics services	49.3			23.3			33.5			21.7			15.8			47.2
Other Forward Air services	21.2			10.0			12.8			8.3			8.4			65.6
Forward Air - Total revenue	211.4			84.7			154.3			79.6			57.1			37.0
TQI - Pharmaceutical services	11.8			4.7			13.7			7.1			(1.9		)	(13.9	)
Forward Air Solutions - Pool distribution	27.7			11.1			26.9			13.9			0.8			3.0
Intersegment eliminations	(1.2		)	(0.5	)		(1.0		)	(0.6	)		(0.2		)	20.0
Consolidated operating revenue	$	249.7		100.0	%		$	193.9		100.0	%		$	55.8		28.8	%
	Three months ended
	June 30,			Percent of			June 30,			Percent of						Percent
	2015			Revenue			2014			Revenue			Change			Change
Purchased Transportation
Forward Air
Airport-to-airport	$	61.1		43.4	%		$	44.8		41.5	%		$	16.3		36.4	%
Logistics services
Expedited full truckload - TLX	19.6			71.3			14.7			76.6			4.9			33.3
Intermodal/drayage	8.3			38.1			6.1			42.7			2.2			36.1
Total Logistics services	27.9			56.6			20.8			62.1			7.1			34.1
Other Forward Air services	6.4			30.2			3.0			23.4			3.4			113.3
Forward Air - Total purchased transportation	95.4			45.1			68.6			44.5			26.8			39.1
TQI - Pharmaceutical services	5.4			45.8			7.2			52.5			(1.8		)	(25.0	)
Forward Air Solutions - Pool distribution	7.5			27.1			7.8			29.0			(0.3		)	(3.8	)
Intersegment eliminations	(0.9		)	75.0			(0.8		)	80.0			(0.1		)	12.5
Consolidated purchased transportation	$	107.4		43.0	%		$	82.8		42.7	%		$	24.6		29.7	%

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Forward Air Corporation
Components of Consolidated Revenue and Purchased Transportation
(In millions)
(Unaudited)
	Six months ended
	June 30,			Percent of			June 30,			Percent of						Percent
	2015			Revenue			2014			Revenue			Change			Change
Operating Revenue
Forward Air
Airport-to-airport	$	254.2		66.9	%		$	205.7		71.3	%		$	48.5		23.6	%
Logistics services
Expedited full truckload - TLX	50.8			13.4			36.6			12.7			14.2			38.8
Intermodal/drayage	39.7			10.4			23.3			8.1			16.4			70.4
Total Logistics services	90.5			23.8			59.9			20.8			30.6			51.1
Other Forward Air services	35.4			9.3			22.8			7.9			12.6			55.3
Forward Air - Total revenue	380.1			83.4			288.4			78.9			91.7			31.8
TQI - Pharmaceutical services	23.1			5.1			24.7			6.8			(1.6		)	(6.5	)
Forward Air Solutions - Pool distribution	54.9			12.1			54.3			14.9			0.6			1.1
Intersegment eliminations	(2.5		)	(0.6	)		(2.0		)	(0.6	)		(0.5		)	25.0
Consolidated operating revenue	$	455.6		100.0	%		$	365.4		100.0	%		$	90.2		24.7	%
	Six months ended
	June 30,			Percent of			June 30,			Percent of						Percent
	2015			Revenue			2014			Revenue			Change			Change
Purchased Transportation
Forward Air
Airport-to-airport	$	111.1		43.7	%		$	85.5		41.6	%		$	25.6		29.9	%
Logistics services
Expedited full truckload - TLX	36.5			71.9			28.4			77.6			8.1			28.5
Intermodal/drayage	14.7			37.0			9.9			42.5			4.8			48.5
Total Logistics services	51.2			56.6			38.3			63.9			12.9			33.7
Other Forward Air services	10.2			28.8			5.6			24.6			4.6			82.1
Forward Air - Total purchased transportation	172.5			45.4			129.4			44.9			43.1			33.3
TQI - Pharmaceutical services	11.1			48.1			12.7			51.4			(1.6		)	(12.6	)
Forward Air Solutions - Pool distribution	15.0			27.3			15.9			29.3			(0.9		)	(5.7	)
Intersegment eliminations	(1.8		)	72.0			(1.6		)	80.0			(0.2		)	12.5
Consolidated purchased transportation	$	196.8		43.2	%		$	156.4		42.8	%		$	40.4		25.8	%

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Forward Air Corporation
Consolidated Balance Sheets
(In thousands)
(Unaudited)
	June 30, 2015				December 31, 2014 (a)
Assets
Current assets:
Cash and cash equivalents	$	42,531			$	41,429
Accounts receivable, net	122,356				95,326
Other current assets	28,455				13,200
Total current assets	193,342				149,955
Property and equipment	317,835				305,188
Less accumulated depreciation and amortization	144,638				132,699
Net property and equipment	173,197				172,489
Goodwill and other acquired intangibles:
Goodwill	206,530				144,412
Other acquired intangibles, net of accumulated amortization	133,262				72,705
Total net goodwill and other acquired intangibles	339,792				217,117
Other assets	3,029				2,244
Total assets	$	709,360			$	541,805
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	27,616			$	20,572
Accrued expenses	33,191				22,583
Current portion of debt and capital lease obligations	55,906				276
Total current liabilities	116,713				43,431
Debt and capital lease obligations, less current portion	56,926				1,275
Other long-term liabilities	13,511				8,356
Deferred income taxes	33,726				25,180
Shareholders’ equity:
Common stock	308				303
Additional paid-in capital	150,812				130,107
Retained earnings	337,364				333,153
Total shareholders’ equity	488,484				463,563
Total liabilities and shareholders’ equity	$	709,360			$	541,805
(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
(In thousands)
(Unaudited)
	Three months ended
	June 30, 2015				June 30, 2014
Operating activities:
Net income	$	11,824			$	17,178
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	9,519				7,751
Share-based compensation	1,890				1,677
Loss (gain) on disposal of property and equipment	116				(128		)
Provision for loss (recovery) on receivables	102				(127		)
Provision for revenue adjustments	935				609
Deferred income tax (benefit)	(3,543		)		1,441
Excess tax benefit for stock options exercised	(36		)		(270		)
Changes in operating assets and liabilities
Accounts receivable	(2,556		)		(4,234		)
Prepaid expenses and other current assets	(5,829		)		(9,478		)
Accounts payable and accrued expenses	(1,319		)		4,764
Net cash provided by operating activities	11,103				19,183
Investing activities:
Proceeds from disposal of property and equipment	41				383
Purchases of property and equipment	(6,733		)		(13,872		)
Acquisition of business, net of cash acquired	(52		)		—
Other	67				(133		)
Net cash used in investing activities	(6,677		)		(13,622		)
Financing activities:
Payments of debt and capital lease obligations	(14,147		)		(87		)
Proceeds from exercise of stock options	1,212				1,740
Payments of cash dividends	(3,719		)		(3,746		)
Repurchase of common stock (repurchase program)	—				(19,985		)
Common stock issued under employee stock purchase plan	228				148
Cash settlement of share-based awards for minimum tax withholdings	—				(2		)
Excess tax benefit for stock options exercised	36				270
Net cash used in financing activities	(16,390		)		(21,662		)
Net (decrease) increase in cash	(11,964		)		(16,101		)
Cash at beginning of period	54,495				41,044
Cash at end of period	$	42,531			$	24,943

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Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Six months ended
	June 30, 2015				June 30, 2014
Operating activities:
Net income	$	16,660			$	27,379
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	18,202				14,764
Share-based compensation	3,676				3,329
Gain on disposal of property and equipment	(33		)		(112		)
Provision for loss (recovery) on receivables	83				(85		)
Provision for revenue adjustments	1,842				1,250
Deferred income tax (benefit)	(498		)		1,573
Excess tax benefit for stock options exercised	(2,365		)		(907		)
Changes in operating assets and liabilities
Accounts receivable	(4,887		)		(12,727		)
Prepaid expenses and other current assets	(3,210		)		(2,429		)
Accounts payable and accrued expenses	(10,908		)		7,180
Net cash provided by operating activities	18,562				39,215
Investing activities:
Proceeds from disposal of property and equipment	623				462
Purchases of property and equipment	(11,962		)		(33,420		)
Acquisition of business, net of cash acquired	(62,375		)		(82,998		)
Other	(68		)		(193		)
Net cash used in investing activities	(73,782		)		(116,149		)
Financing activities:
Proceeds from term loan	125,000				—
Payments of debt and capital lease obligations	(73,263		)		(9,578		)
Proceeds from exercise of stock options	11,351				11,580
Payments of cash dividends	(7,433		)		(7,479		)
Repurchase of common stock (repurchase program)	—				(19,985		)
Common stock issued under employee stock purchase plan	228				148
Cash settlement of share-based awards for minimum tax withholdings	(1,926		)		(1,083		)
Excess tax benefit for stock options exercised	2,365				907
Net cash provided by (used in) financing activities	56,322				(25,490		)
Net increase (decrease) in cash	1,102				(102,424		)
Cash at beginning of period	41,429				127,367
Cash at end of period	$	42,531			$	24,943

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Forward Air Corporation

Segment Information

(In millions)

(unaudited)

	Three months ended
Forward Air	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	211.4			84.7	%		$	154.3			79.6	%		$	57.1			37.0	%
Operating expenses:
Purchased transportation	95.4				45.1			68.6				44.5			26.8				39.1
Salaries, wages, and employee benefits	48.8				23.1			32.9				21.3			15.9				48.3
Operating leases	16.1				8.0			6.2				4.0			9.9				159.7
Depreciation and amortization	7.0				3.3			5.4				3.5			1.6				29.6
Insurance and claims	5.1				2.4			2.4				1.6			2.7				112.5
Fuel expense	2.0				0.9			2.2				1.4			(0.2		)		(9.1	)
Other operating expenses	18.2				8.6			11.4				7.4			6.8				59.6
Income from operations	$	18.8			8.9	%		$	25.2			16.3	%		$	(6.4	)		(25.4	)%
FASI	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	27.7			11.1	%		$	26.9			13.9	%		$	0.8			3.0	%
Operating expenses:
Purchased transportation	7.5				27.1			7.8				29.0			(0.3		)		(3.8	)
Salaries, wages, and employee benefits	10.6				38.3			9.3				34.6			1.3				14.0
Operating leases	2.1				7.6			2.0				7.4			0.1				5.0
Depreciation and amortization	1.5				5.4			1.4				5.2			0.1				7.1
Insurance and claims	0.9				3.2			0.5				1.9			0.4				80.0
Fuel expense	1.3				4.7			1.8				6.7			(0.5		)		(27.8	)
Other operating expenses	3.7				13.3			3.1				11.5			0.6				19.4
Income from operations	$	0.1			0.4	%		$	1.0			3.7	%		$	(0.9	)		(90.0	)%
TQI	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	11.8			4.7	%		$	13.7			7.1	%		$	(1.9	)		(13.9	)%
Operating expenses:
Purchased transportation	5.4				45.8			7.2				52.5			(1.8		)		(25.0	)
Salaries, wages, and employee benefits	2.5				21.2			2.2				16.1			0.3				13.6
Operating leases	—				—			—				—			—				—
Depreciation and amortization	1.0				8.5			1.0				7.3			—				—
Insurance and claims	0.3				2.5			0.2				1.5			0.1				50.0
Fuel expense	0.9				7.6			1.2				8.8			(0.3		)		(25.0	)
Other operating expenses	0.7				5.9			0.5				3.6			0.2				40.0
Income from operations	$	1.0			8.5	%		$	1.4			10.2	%		$	(0.4	)		(28.6	)%
Intercompany Eliminations	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	(1.2	)		(0.5	)%		$	(1.0	)		(0.5	)%		$	(0.2	)		20.0	%
Operating expenses:
Purchased transportation	(0.9		)		75.0			(0.8		)		80.0			(0.1		)		12.5
Other operating expenses	(0.3		)		25.0			(0.2		)		20.0			(0.1		)		50.0
Income from operations	$	—			—	%		$	—			—	%		$	—			—	%
Consolidated	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	249.7			100.0	%		$	193.9			100.0	%		$	55.8			28.8	%
Operating expenses:
Purchased transportation	107.4				43.0			82.8				42.7			24.6				29.7
Salaries, wages, and employee benefits	61.9				24.8			44.4				22.9			17.5				39.4
Operating leases	18.2				7.3			8.2				4.2			10.0				122.0
Depreciation and amortization	9.5				3.8			7.8				4.0			1.7				21.8
Insurance and claims	6.3				2.5			3.1				1.6			3.2				103.2
Fuel expense	4.2				2.0			5.2				2.7			(1.0		)		(19.2	)
Other operating expenses	22.3				8.9			14.8				7.6			7.5				50.7
Income from operations	$	19.9			8.0	%		$	27.6			14.2	%		$	(7.7	)		(27.9	)%

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Forward Air Corporation

Segment Information

(In millions)

(unaudited)

	Six months ended
Forward Air	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	380.1			83.4	%		$	288.4			78.9	%		$	91.7			31.8	%
Operating expenses:
Purchased transportation	172.5				45.4			129.4				44.9			43.1				33.3
Salaries, wages, and employee benefits	90.3				23.8			63.0				21.8			27.3				43.3
Operating leases	29.8				7.8			12.0				4.2			17.8				148.3
Depreciation and amortization	13.2				3.5			10.3				3.6			2.9				28.2
Insurance and claims	9.1				2.4			5.5				1.9			3.6				65.5
Fuel expense	3.9				1.0			4.1				1.4			(0.2		)		(4.9	)
Other operating expenses	35.3				9.3			23.5				8.1			11.8				50.2
Income from operations	$	26.0			6.8	%		$	40.6			14.1	%		$	(14.6	)		(36.0	)%
FASI	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	54.9			12.1	%		$	54.3			14.9	%		$	0.6			1.1	%
Operating expenses:
Purchased transportation	15.0				27.3			15.9				29.3			(0.9		)		(5.7	)
Salaries, wages, and employee benefits	20.7				37.7			18.7				34.4			2.0				10.7
Operating leases	4.2				7.7			4.5				8.3			(0.3		)		(6.7	)
Depreciation and amortization	3.1				5.6			2.7				5.0			0.4				14.8
Insurance and claims	1.8				3.3			1.3				2.4			0.5				38.5
Fuel expense	2.6				4.7			3.5				6.5			(0.9		)		(25.7	)
Other operating expenses	7.2				13.1			6.7				12.3			0.5				7.5
Income from operations	$	0.3			0.6	%		$	1.0			1.8	%		$	(0.7	)		(70.0	)%
TQI	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	23.1			5.1	%		$	24.7			6.8	%		$	(1.6	)		(6.5	)%
Operating expenses:
Purchased transportation	11.1				48.1			12.7				51.4			(1.6		)		(12.6	)
Salaries, wages, and employee benefits	4.8				20.8			4.1				16.6			0.7				17.1
Operating leases	0.1				0.4			—				—			0.1				—
Depreciation and amortization	1.9				8.2			1.7				6.9			0.2				11.8
Insurance and claims	0.4				1.7			0.4				1.6			—				—
Fuel expense	1.8				7.8			2.4				9.7			(0.6		)		(25.0	)
Other operating expenses	1.1				4.8			1.1				4.5			—				—
Income from operations	$	1.9			8.2	%		$	2.3			9.3	%		$	(0.4	)		(17.4	)%
Intercompany Eliminations	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	(2.5	)		(0.6	)%		$	(2.0	)		(0.6	)%		$	(0.5	)		25.0	%
Operating expenses:
Purchased transportation	(1.8		)		72.0			(1.6		)		80.0			(0.2		)		12.5
Other operating expenses	(0.7		)		28.0			(0.4		)		20.0			(0.3		)		75.0
Income from operations	$	—			—	%		$	—			—	%		$	—			—	%
Consolidated	June 30,				Percent of			June 30,				Percent of							Percent
	2015				Revenue			2014				Revenue			Change				Change
Operating revenue	$	455.6			100.0	%		$	365.4			100.0	%		$	90.2			24.7	%
Operating expenses:
Purchased transportation	196.8				43.2			156.4				42.8			40.4				25.8
Salaries, wages, and employee benefits	115.8				25.4			85.8				23.5			30.0				35.0
Operating leases	34.1				7.5			16.5				4.5			17.6				106.7
Depreciation and amortization	18.2				4.0			14.7				4.0			3.5				23.8
Insurance and claims	11.3				2.5			7.2				2.0			4.1				56.9
Fuel expense	8.3				2.0			10.0				2.7			(1.7		)		(17.0	)
Other operating expenses	42.9				9.4			30.9				8.5			12.0				38.8
Income from operations	$	28.2			6.2	%		$	43.9			12.0	%		$	(15.7	)		(35.8	)%

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Forward Air Corporation
Forward Air Inc. Operating Statistics
	Three months ended
	June 30,				June 30,				Percent
	2015				2014				Change
Operating ratio	91.1		%		83.7		%		8.8	%
Business days	64.0				64.0				—
Business weeks	12.8				12.8				—
Airport-to-airport:
Tonnage
Total pounds ¹	650,276				473,146				37.4
Average weekly pounds ¹	50,803				36,965				37.4
Linehaul shipments
Total linehaul	1,011,107				731,002				38.3
Average weekly	78,993				57,110				38.3
Forward Air Complete shipments	256,553				139,572				83.8
As a percentage of linehaul shipments	25.4		%		19.1		%		33.0
Average linehaul shipment size	643				647				(0.6	)
Revenue per pound ²
Linehaul yield	$	17.37			$	17.66			(1.3	)
Fuel surcharge impact	1.20				2.03				(3.6	)
Forward Air Complete impact	3.09				3.13				(0.2	)
Total airport-to-airport yield	$	21.66			$	22.82			(5.1	)
Expedited full truckload - TLX:
Miles
Owner operator ¹	8,125				6,930				17.2
Third party ¹	6,284				4,570				37.5
Total Miles	14,409				11,500				25.3
Revenue per mile	$	1.91			$	1.67			14.4
Cost per mile	$	1.36			$	1.28			6.3	%
¹ - In thousands
² - In dollars per hundred pound; percentage change is expressed as a percent of total yield.

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Forward Air Corporation
Forward Air Inc. Operating Statistics
	Six months ended
	June 30,				June 30,				Percent
	2015				2014				Change
Operating ratio	93.2		%		85.9		%		8.5	%
Business days	127.0				127.0				—
Business weeks	25.4				25.4				—
Airport-to-airport:
Tonnage
Total pounds ¹	1,166,456				914,861				27.5
Average weekly pounds ¹	45,923				36,018				27.5
Linehaul shipments
Total linehaul	1,796,607				1,393,482				28.9
Average weekly	70,733				54,861				28.9
Forward Air Complete shipments	426,288				247,146				72.5
As a percentage of linehaul shipments	23.7		%		17.7		%		33.9
Average linehaul shipment size	649				657				(1.2	)
Revenue per pound ²
Linehaul yield	$	17.45			$	17.49			(0.2	)
Fuel surcharge impact	1.23				2.03				(3.5	)
Forward Air Complete impact	3.11				2.97				0.6
Total airport-to-airport yield	$	21.79			$	22.49			(3.1	)
Expedited full truckload - TLX:
Miles
Owner operator ¹	14,078				13,898				1.3
Third party ¹	12,305				8,652				42.2
Total Miles	26,383				22,550				17.0
Revenue per mile	$	1.92			$	1.62			18.5
Cost per mile	$	1.38			$	1.26			9.5	%
¹ - In thousands
² - In dollars per hundred pound; percentage change is expressed as a percent of total yield.

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Important Information

This press release may contain statements that might be considered as forward-looking statements or predictions of future operations. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on management’s belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may differ from these expectations as specified from time to time in filings with the Securities and Exchange Commission. We assume no duty to update these statements as of any future date.

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, including, without limitation, statements as to Towne or the anticipated benefits of the transaction. 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 Towne. 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.

SOURCE: Forward Air Corporation

Forward Air Corporation

Rodney L. Bell, 432-636-7000

rbell@forwardair.com