Forward Air Corporation | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Year ended | ||||||||||||||
December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | ||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 147,368 | $ | 149,748 | $ | 570,778 | $ | 577,026 | |||||||
Truckload Premium Services | 44,003 | 40,937 | 164,272 | 153,331 | |||||||||||
Pool Distribution | 47,507 | 42,954 | 148,661 | 129,995 | |||||||||||
Intermodal | 27,279 | 24,881 | 103,671 | 104,292 | |||||||||||
Eliminations and other operations | (1,364 | ) | (2,100 | ) | (4,852 | ) | (5,519 | ) | |||||||
Operating revenue | 264,793 | 256,420 | 982,530 | 959,125 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 112,572 | 107,516 | 413,355 | 408,769 | |||||||||||
Salaries, wages and employee benefits | 66,145 | 65,789 | 242,002 | 240,604 | |||||||||||
Operating leases | 15,808 | 15,167 | 60,492 | 66,272 | |||||||||||
Depreciation and amortization | 9,801 | 9,556 | 38,210 | 37,157 | |||||||||||
Insurance and claims | 6,180 | 4,951 | 25,392 | 21,483 | |||||||||||
Fuel expense | 3,857 | 3,869 | 13,233 | 15,903 | |||||||||||
Other operating expenses | 22,207 | 20,557 | 87,425 | 87,165 | |||||||||||
Impairment of goodwill, intangibles and other assets | — | — | 42,442 | — | |||||||||||
Total operating expenses | 236,570 | 227,405 | 922,551 | 877,353 | |||||||||||
Operating income (loss): | |||||||||||||||
Expedited LTL | 20,492 | 21,918 | 83,518 | 79,193 | |||||||||||
Truckload Premium Services | 1,273 | 2,767 | (35,405 | ) | 13,288 | ||||||||||
Pool Distribution | 3,824 | 3,062 | 3,633 | 3,820 | |||||||||||
Intermodal | 2,786 | 3,106 | 10,956 | 11,949 | |||||||||||
Other operations | (152 | ) | (1,838 | ) | (2,723 | ) | (26,478 | ) | |||||||
Income from operations | 28,223 | 29,015 | 59,979 | 81,772 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (366 | ) | (558 | ) | (1,597 | ) | (2,047 | ) | |||||||
Other, net | 152 | 68 | 4 | (58 | ) | ||||||||||
Total other income (expense) | (214 | ) | (490 | ) | (1,593 | ) | (2,105 | ) | |||||||
Income before income taxes | 28,009 | 28,525 | 58,386 | 79,667 | |||||||||||
Income tax expense | 15,303 | 5,297 | 30,716 | 24,092 | |||||||||||
Net income and comprehensive income | $ | 12,706 | $ | 23,228 | $ | 27,670 | $ | 55,575 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.42 | $ | 0.75 | $ | 0.91 | $ | 1.80 | |||||||
Diluted | $ | 0.42 | $ | 0.75 | $ | 0.90 | $ | 1.78 | |||||||
Dividends per share: | $ | 0.15 | $ | 0.12 | $ | 0.51 | $ | 0.48 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2016 | Revenue | 2015 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 147.4 | 100.0 | % | $ | 149.7 | 100.0 | % | $ | (2.3 | ) | (1.5 | )% | |||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 59.6 | 40.4 | 61.9 | 41.3 | (2.3 | ) | (3.7 | ) | ||||||||||||
Salaries, wages and employee benefits | 36.4 | 24.7 | 37.8 | 25.3 | (1.4 | ) | (3.7 | ) | ||||||||||||
Operating leases | 8.9 | 6.1 | 8.1 | 5.4 | 0.8 | 9.9 | ||||||||||||||
Depreciation and amortization | 5.6 | 3.8 | 5.4 | 3.6 | 0.2 | 3.7 | ||||||||||||||
Insurance and claims | 3.1 | 2.1 | 2.2 | 1.5 | 0.9 | 40.9 | ||||||||||||||
Fuel expense | 0.9 | 0.6 | 0.9 | 0.6 | — | — | ||||||||||||||
Other operating expenses | 12.4 | 8.4 | 11.5 | 7.7 | 0.9 | 7.8 | ||||||||||||||
Total operating expenses | 126.9 | 86.1 | 127.8 | 85.4 | (0.9 | ) | (0.7 | ) | ||||||||||||
Income from operations | $ | 20.5 | 13.9 | % | $ | 21.9 | 14.6 | % | $ | (1.4 | ) | (6.4 | )% |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
December 31, | December 31, | Percent | ||||||||
2016 | 2015 | Change | ||||||||
Operating ratio | 86.1 | % | 85.4 | % | 0.8 | % | ||||
Business days | 63.0 | 64.0 | (1.6 | ) | ||||||
Business weeks | 12.6 | 12.8 | (1.6 | ) | ||||||
Expedited LTL: | ||||||||||
Tonnage | ||||||||||
Total pounds ¹ | 612,098 | 621,178 | (1.5 | ) | ||||||
Average weekly pounds ¹ | 48,579 | 48,530 | 0.1 | |||||||
Linehaul shipments | ||||||||||
Total linehaul | 1,006,256 | 1,015,043 | (0.9 | ) | ||||||
Average weekly | 79,862 | 79,300 | 0.7 | |||||||
Forward Air Complete shipments | 202,452 | 198,894 | 1.8 | |||||||
As a percentage of linehaul shipments | 20.1 | % | 19.6 | % | 2.6 | |||||
Average linehaul shipment size | 608 | 612 | (0.7 | ) | ||||||
Revenue per pound 2 | ||||||||||
Linehaul yield | $ | 17.40 | $ | 17.70 | (1.4 | ) | ||||
Fuel surcharge | 1.02 | 0.98 | 0.2 | |||||||
Forward Air Complete | 3.45 | 3.22 | 1.1 | |||||||
Total Expedited LTL yield | $ | 21.87 | $ | 21.90 | (0.1 | )% | ||||
¹ - In thousands | ||||||||||
2 - In dollars per hundred pound; percentage change is expressed as a percent of total yield. |
Truckload Premium Services Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2016 | Revenue | 2015 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 44.0 | 100.0 | % | $ | 40.9 | 100.0 | % | $ | 3.1 | 7.6 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 31.7 | 72.1 | 27.6 | 67.5 | 4.1 | 14.9 | ||||||||||||||
Salaries, wages and employee benefits | 4.9 | 11.1 | 5.2 | 12.7 | (0.3 | ) | (5.8 | ) | ||||||||||||
Operating leases | 0.1 | 0.2 | 0.1 | 0.2 | — | — | ||||||||||||||
Depreciation and amortization | 1.5 | 3.4 | 1.7 | 4.2 | (0.2 | ) | (11.8 | ) | ||||||||||||
Insurance and claims | 1.9 | 4.3 | 0.7 | 1.7 | 1.2 | 171.4 | ||||||||||||||
Fuel expense | 0.7 | 1.6 | 0.8 | 2.0 | (0.1 | ) | (12.5 | ) | ||||||||||||
Other operating expenses | 1.9 | 4.3 | 2.0 | 4.9 | (0.1 | ) | (5.0 | ) | ||||||||||||
Total operating expenses | 42.7 | 97.0 | 38.1 | 93.2 | 4.6 | 12.1 | ||||||||||||||
Income from operations | $ | 1.3 | 3.0 | % | $ | 2.8 | 6.8 | % | $ | (1.5 | ) | (53.6 | )% |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
December 31, | December 31, | Percent | ||||||||
2016 | 2015 | Change | ||||||||
Company driver 1 | 1,665 | 1,900 | (12.4 | )% | ||||||
Owner operator 1 | 12,702 | 11,967 | 6.1 | |||||||
Third party 1 | 9,455 | 7,436 | 27.2 | |||||||
Total Miles | 23,822 | 21,303 | 11.8 | |||||||
Revenue per mile | $ | 1.80 | $ | 1.87 | (3.7 | ) | ||||
Cost per mile | $ | 1.42 | $ | 1.40 | 1.4 | % | ||||
¹ - In thousands |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2016 | Revenue | 2015 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 47.5 | 100.0 | % | $ | 43.0 | 100.0 | % | $ | 4.5 | 10.5 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 12.5 | 26.3 | 11.2 | 26.0 | 1.3 | 11.6 | ||||||||||||||
Salaries, wages and employee benefits | 17.8 | 37.5 | 16.0 | 37.2 | 1.8 | 11.3 | ||||||||||||||
Operating leases | 3.5 | 7.4 | 3.4 | 7.9 | 0.1 | 2.9 | ||||||||||||||
Depreciation and amortization | 1.5 | 3.1 | 1.5 | 3.5 | — | — | ||||||||||||||
Insurance and claims | 1.2 | 2.5 | 1.1 | 2.6 | 0.1 | 9.1 | ||||||||||||||
Fuel expense | 1.6 | 3.4 | 1.5 | 3.5 | 0.1 | 6.7 | ||||||||||||||
Other operating expenses | 5.6 | 11.8 | 5.2 | 12.1 | 0.4 | 7.7 | ||||||||||||||
Total operating expenses | 43.7 | 92.0 | 39.9 | 92.8 | 3.8 | 9.5 | ||||||||||||||
Income from operations | $ | 3.8 | 8.0 | % | $ | 3.1 | 7.2 | % | $ | 0.7 | 22.6 | % |
Intermodal Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2016 | Revenue | 2015 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 27.3 | 100.0 | % | $ | 24.9 | 100.0 | % | $ | 2.4 | 9.6 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 9.7 | 35.5 | 8.3 | 33.3 | 1.4 | 16.9 | ||||||||||||||
Salaries, wages and employee benefits | 6.6 | 24.2 | 6.1 | 24.5 | 0.5 | 8.2 | ||||||||||||||
Operating leases | 2.8 | 10.3 | 3.0 | 12.1 | (0.2 | ) | (6.7 | ) | ||||||||||||
Depreciation and amortization | 1.1 | 4.0 | 0.9 | 3.6 | 0.2 | 22.2 | ||||||||||||||
Insurance and claims | 0.8 | 2.9 | 0.6 | 2.4 | 0.2 | 33.3 | ||||||||||||||
Fuel expense | 0.7 | 2.6 | 0.7 | 2.8 | — | — | ||||||||||||||
Other operating expenses | 2.8 | 10.3 | 2.2 | 8.8 | 0.6 | 27.3 | ||||||||||||||
Total operating expenses | 24.5 | 89.7 | 21.8 | 87.5 | 2.7 | 12.4 | ||||||||||||||
Income from operations | $ | 2.8 | 10.3 | % | $ | 3.1 | 12.5 | % | $ | (0.3 | ) | (9.7 | )% |
Forward Air Corporation | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
December 31, 2016 | December 31, 2015 (a) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 8,511 | $ | 33,312 | |||
Accounts receivable, net | 116,602 | 109,165 | |||||
Other current assets | 11,157 | 30,980 | |||||
Total current assets | 136,270 | 173,457 | |||||
Property and equipment | 379,021 | 343,147 | |||||
Less accumulated depreciation and amortization | 178,816 | 155,859 | |||||
Net property and equipment | 200,205 | 187,288 | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 184,675 | 205,609 | |||||
Other acquired intangibles, net of accumulated amortization | 106,650 | 127,800 | |||||
Total net goodwill and other acquired intangibles | 291,325 | 333,409 | |||||
Other assets | 13,491 | 5,778 | |||||
Total assets | $ | 641,291 | $ | 699,932 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 18,012 | $ | 23,334 | |||
Accrued expenses | 31,903 | 29,823 | |||||
Current portion of debt and capital lease obligations | 28,012 | 55,887 | |||||
Total current liabilities | 77,927 | 109,044 | |||||
Debt and capital lease obligations, less current portion | 725 | 28,617 | |||||
Other long-term liabilities | 21,699 | 12,340 | |||||
Deferred income taxes | 41,871 | 39,876 | |||||
Shareholders’ equity: | |||||||
Common stock | 301 | 305 | |||||
Additional paid-in capital | 179,512 | 160,855 | |||||
Retained earnings | 319,256 | 348,895 | |||||
Total shareholders’ equity | 499,069 | 510,055 | |||||
Total liabilities and shareholders’ equity | $ | 641,291 | $ | 699,932 | |||
(a) Taken from audited financial statements, which are not presented in their entirety and have been adjusted to reflect reclassifications associated with the early adoption of a new accounting standard. |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
December 31, 2016 | December 31, 2015 | ||||||
Operating activities: | |||||||
Net income | $ | 12,706 | $ | 23,228 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 9,801 | 9,556 | |||||
Share-based compensation | 2,130 | 1,924 | |||||
Loss (gain) on disposal of property and equipment | 90 | (178 | ) | ||||
Provision for recovery on receivables | (10 | ) | (430 | ) | |||
Provision for revenue adjustments | 450 | 1,402 | |||||
Deferred income taxes | 2,864 | 8,985 | |||||
Tax benefit for stock options exercised | (1,595 | ) | (3,048 | ) | |||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (1,715 | ) | 4,537 | ||||
Prepaid expenses and other assets | 7,377 | (12,274 | ) | ||||
Accounts payable and accrued expenses | 3,644 | (5,295 | ) | ||||
Net cash provided by operating activities | 35,742 | 28,407 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 134 | 520 | |||||
Purchases of property and equipment | (13,461 | ) | (21,954 | ) | |||
Acquisition of business | — | 497 | |||||
Other | 337 | (164 | ) | ||||
Net cash used in investing activities | (12,990 | ) | (21,101 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (13,943 | ) | (13,985 | ) | |||
Proceeds from exercise of stock options | 1,107 | 2,962 | |||||
Payments of cash dividends | (4,542 | ) | (3,688 | ) | |||
Repurchase of common stock (repurchase program) | (9,997 | ) | (9,996 | ) | |||
Common stock issued under employee stock purchase plan | 227 | 221 | |||||
Tax benefit for stock options exercised | 1,595 | 3,048 | |||||
Net cash used in by financing activities | (25,553 | ) | (21,438 | ) | |||
Net decrease in cash | (2,801 | ) | (14,132 | ) | |||
Cash at beginning of period | 11,312 | 47,444 | |||||
Cash at end of period | $ | 8,511 | $ | 33,312 |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Year ended | |||||||
December 31, 2016 | December 31, 2015 | ||||||
Operating activities: | |||||||
Net income | $ | 27,670 | $ | 55,575 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 38,210 | 37,157 | |||||
Impairment of goodwill, intangible and other assets | 42,442 | — | |||||
Share-based compensation | 8,334 | 7,486 | |||||
Loss (gain) on disposal of property and equipment | 291 | (181 | ) | ||||
Provision for loss on receivables | 258 | 33 | |||||
Provision for revenue adjustments | 2,020 | 4,793 | |||||
Deferred income taxes | 3,525 | 14,531 | |||||
Tax benefit for stock options exercised | (1,732 | ) | (5,413 | ) | |||
Changes in operating assets and liabilities, net of acquisition of business | |||||||
Accounts receivable | (9,715 | ) | 5,403 | ||||
Prepaid expenses and other assets | 283 | (1,378 | ) | ||||
Accounts payable and accrued expenses | 18,764 | (32,284 | ) | ||||
Net cash provided by operating activities | 130,350 | 85,722 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 1,929 | 1,720 | |||||
Purchases of property and equipment | (42,186 | ) | (40,495 | ) | |||
Acquisition of business, net of cash acquired | (11,800 | ) | (61,878 | ) | |||
Other | (336 | ) | (265 | ) | |||
Net cash used in investing activities | (52,393 | ) | (100,918 | ) | |||
Financing activities: | |||||||
Proceeds from term loan | — | 125,000 | |||||
Payments of debt and capital lease obligations | (55,768 | ) | (101,352 | ) | |||
Proceeds from exercise of stock options | 8,148 | 14,313 | |||||
Payments of cash dividends | (15,529 | ) | (14,821 | ) | |||
Repurchase of common stock (repurchase program) | (39,983 | ) | (19,992 | ) | |||
Common stock issued under employee stock purchase plan | 442 | 449 | |||||
Cash settlement of share-based awards for minimum tax withholdings | (1,800 | ) | (1,931 | ) | |||
Tax benefit for stock options exercised | 1,732 | 5,413 | |||||
Net cash (used in) provided by financing activities | (102,758 | ) | 7,079 | ||||
Net decrease in cash | (24,801 | ) | (8,117 | ) | |||
Cash at beginning of year | 33,312 | 41,429 | |||||
Cash at end of year | $ | 8,511 | $ | 33,312 |
Forward Air Corporation | ||||||||||||||||||||
Reconciliation to U.S. GAAP | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended December 31, 2016 | ||||||||||||||||||||
Operating Income | Other, Net | Income before taxes | Income taxes | Effective tax rate | Net Income | Diluted earnings per share | ||||||||||||||
Reported (GAAP) | $ | 28.2 | $ | (0.2 | ) | $ | 28.0 | $ | 15.3 | 54.6 | % | $ | 12.7 | $ | 0.42 | |||||
Items impacting comparability: | ||||||||||||||||||||
Impact of TQI impairment on income taxes | — | — | — | (5.0 | ) | 17.8 | % | 5.0 | 0.16 | |||||||||||
After considering items (Non-GAAP) | $ | 28.2 | $ | (0.2 | ) | $ | 28.0 | $ | 10.3 | 36.8 | % | $ | 17.7 | $ | 0.58 | |||||
Three months ended December 31, 2015 | ||||||||||||||||||||
Operating Income | Other, Net | Income before taxes | Income taxes | Effective tax rate | Net Income | Diluted earnings per share | ||||||||||||||
Reported (GAAP) | $ | 29.0 | $ | (0.5 | ) | $ | 28.5 | $ | 5.3 | 18.6 | % | $ | 23.2 | $ | 0.75 | |||||
Items impacting comparability: | ||||||||||||||||||||
Certain tax matters 1 | 1.2 | — | 1.2 | 5.8 | 18.8 | % | (4.6 | ) | (0.15 | ) | ||||||||||
Integrations and deal costs | 0.6 | — | 0.6 | 0.2 | — | % | 0.4 | 0.01 | ||||||||||||
After considering items (Non-GAAP) | $ | 30.8 | $ | (0.5 | ) | $ | 30.3 | $ | 11.3 | 37.4 | % | $ | 19.0 | $ | 0.61 | |||||
1 - Certain tax matters related to technology-related permanent tax deductions in 2015 which were not identified as non-GAAP adjustments at that time, but which are adjusted here for consistency and comparison purposes. |
Forward Air Corporation | ||||||||||||||||||||
Reconciliation to U.S. GAAP | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Year ended December 31, 2016 | ||||||||||||||||||||
Operating Income | Other, Net | Income before taxes | Income taxes | Effective tax rate | Net Income | Diluted earnings per share | ||||||||||||||
Reported (GAAP) | $ | 60.0 | $ | (1.6 | ) | $ | 58.4 | $ | 30.7 | 52.6 | % | $ | 27.7 | $ | 0.90 | |||||
Items impacting comparability: | ||||||||||||||||||||
TQI impairment | 42.4 | — | 42.4 | 6.4 | 15.8 | % | 36.0 | 1.18 | ||||||||||||
After considering items (Non-GAAP) | $ | 102.4 | $ | (1.6 | ) | $ | 100.8 | $ | 37.1 | 36.8 | % | $ | 63.7 | $ | 2.08 | |||||
Year ended December 31, 2015 | ||||||||||||||||||||
Operating Income | Other, Net | Income before taxes | Income taxes | Effective tax rate | Net Income | Diluted earnings per share | ||||||||||||||
Reported (GAAP) | $ | 81.8 | $ | (2.1 | ) | $ | 79.7 | $ | 24.1 | 30.2 | % | $ | 55.6 | $ | 1.78 | |||||
Items impacting comparability: | ||||||||||||||||||||
Certain tax matters 1 | 1.2 | — | 1.2 | 6.9 | 7.2 | % | (5.7 | ) | (0.18 | ) | ||||||||||
Integrations and deal costs | 23.1 | 0.4 | 23.5 | 8.8 | — | % | 14.7 | 0.47 | ||||||||||||
After considering items (Non-GAAP) | $ | 106.1 | $ | (1.7 | ) | $ | 104.4 | $ | 39.8 | 37.4 | % | $ | 64.6 | $ | 2.07 | |||||
1 - Certain tax matters related to technology-related permanent tax deductions in 2015 which were not identified as non-GAAP adjustments at that time, but which are adjusted here for consistency and comparison purposes. |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands) | |||
(Unaudited) | |||
2017 | |||
Projected tax rate | 37.0 | % | |
Projected year end fully diluted share count (before consideration of future share repurchases) | 30,500 | ||
Projected capital expenditures, net | $ | 45,904 |