Forward Air Corporation | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
June 30, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | ||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 152,270 | $ | 144,693 | $ | 292,868 | $ | 279,072 | |||||||
Truckload Premium Services | 45,186 | 39,440 | 86,971 | 78,060 | |||||||||||
Pool Distribution | 36,835 | 31,525 | 74,658 | 64,716 | |||||||||||
Intermodal | 35,270 | 24,189 | 63,561 | 48,813 | |||||||||||
Eliminations and other operations | (2,043 | ) | (1,210 | ) | (3,559 | ) | (2,476 | ) | |||||||
Operating revenue | 267,518 | 238,637 | 514,499 | 468,185 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 115,609 | 99,267 | 218,692 | 195,743 | |||||||||||
Salaries, wages and employee benefits | 64,402 | 57,018 | 126,399 | 115,695 | |||||||||||
Operating leases | 14,796 | 14,601 | 30,397 | 28,469 | |||||||||||
Depreciation and amortization | 10,219 | 9,341 | 20,252 | 19,009 | |||||||||||
Insurance and claims | 7,730 | 6,648 | 13,536 | 12,044 | |||||||||||
Fuel expense | 3,671 | 2,999 | 7,351 | 5,960 | |||||||||||
Other operating expenses | 21,282 | 20,669 | 44,875 | 41,766 | |||||||||||
Impairment of goodwill, intangibles and other assets | — | 42,442 | — | 42,442 | |||||||||||
Total operating expenses | 237,709 | 252,985 | 461,502 | 461,128 | |||||||||||
Operating (loss) income: | |||||||||||||||
Expedited LTL | 22,992 | 24,921 | 41,392 | 42,011 | |||||||||||
Truckload Premium Services | 1,859 | (40,282 | ) | 3,563 | (38,717 | ) | |||||||||
Pool Distribution | 1,625 | (371 | ) | 2,991 | (257 | ) | |||||||||
Intermodal | 3,073 | 2,757 | 5,652 | 5,130 | |||||||||||
Other operations | 260 | (1,373 | ) | (601 | ) | (1,110 | ) | ||||||||
Income (loss) from operations | 29,809 | (14,348 | ) | 52,997 | 7,057 | ||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (236 | ) | (461 | ) | (518 | ) | (1,015 | ) | |||||||
Other, net | 18 | (117 | ) | (8 | ) | (145 | ) | ||||||||
Total other income (expense) | (218 | ) | (578 | ) | (526 | ) | (1,160 | ) | |||||||
Income (loss) before income taxes | 29,591 | (14,926 | ) | 52,471 | 5,897 | ||||||||||
Income tax expense (benefit) | 10,041 | (4,860 | ) | 18,678 | 2,864 | ||||||||||
Net income (loss) and comprehensive income (loss) | $ | 19,550 | $ | (10,066 | ) | $ | 33,793 | $ | 3,033 | ||||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.65 | $ | (0.33 | ) | $ | 1.12 | $ | 0.10 | ||||||
Diluted | $ | 0.64 | $ | (0.33 | ) | $ | 1.11 | $ | 0.10 | ||||||
Dividends per share: | $ | 0.15 | $ | 0.12 | $ | 0.30 | $ | 0.24 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 152.3 | 100.0 | % | $ | 144.7 | 100.0 | % | $ | 7.6 | 5.3 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 61.1 | 40.1 | 55.8 | 38.6 | 5.3 | 9.5 | ||||||||||||||
Salaries, wages and employee benefits | 36.9 | 24.2 | 33.9 | 23.4 | 3.0 | 8.8 | ||||||||||||||
Operating leases | 9.0 | 5.9 | 8.5 | 5.9 | 0.5 | 5.9 | ||||||||||||||
Depreciation and amortization | 5.5 | 3.6 | 5.3 | 3.7 | 0.2 | 3.8 | ||||||||||||||
Insurance and claims | 4.2 | 2.8 | 3.4 | 2.3 | 0.8 | 23.5 | ||||||||||||||
Fuel expense | 0.9 | 0.6 | 0.8 | 0.5 | 0.1 | 12.5 | ||||||||||||||
Other operating expenses | 11.7 | 7.7 | 12.1 | 8.4 | (0.4 | ) | (3.3 | ) | ||||||||||||
Total operating expenses | 129.3 | 84.9 | 119.8 | 82.8 | 9.5 | 7.9 | ||||||||||||||
Income from operations | $ | 23.0 | 15.1 | % | $ | 24.9 | 17.2 | % | $ | (1.9 | ) | (7.6 | )% |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2017 | 2016 | Change | ||||||||
Operating ratio | 84.9 | % | 82.8 | % | 2.5 | % | ||||
Business days | 64.0 | 64.0 | — | |||||||
Business weeks | 12.8 | 12.8 | — | |||||||
Expedited LTL: | ||||||||||
Tonnage | ||||||||||
Total pounds ¹ | 625,765 | 606,033 | 3.3 | |||||||
Average weekly pounds ¹ | 48,888 | 47,346 | 3.3 | |||||||
Linehaul shipments | ||||||||||
Total linehaul | 1,010,114 | 964,756 | 4.7 | |||||||
Average weekly | 78,915 | 75,372 | 4.7 | |||||||
Forward Air Complete shipments | 243,969 | 206,406 | 18.2 | |||||||
As a percentage of linehaul shipments | 24.2 | % | 21.4 | % | 13.1 | |||||
Average linehaul shipment size | 620 | 628 | (1.3 | ) | ||||||
Revenue per pound 2 | ||||||||||
Linehaul yield | $ | 17.05 | $ | 17.58 | (2.4 | ) | ||||
Fuel surcharge | 1.17 | 0.94 | 1.0 | |||||||
Forward Air Complete | 3.77 | 3.31 | 2.1 | |||||||
Total Expedited LTL yield | $ | 21.99 | $ | 21.83 | 0.7 | % | ||||
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 | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 45.2 | 100.0 | % | $ | 39.4 | 100.0 | % | $ | 5.8 | 14.7 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 32.7 | 72.3 | 27.4 | 69.6 | 5.3 | 19.3 | ||||||||||||||
Salaries, wages and employee benefits | 5.0 | 11.1 | 4.5 | 11.4 | 0.5 | 11.1 | ||||||||||||||
Operating leases | 0.1 | 0.2 | 0.1 | 0.3 | — | — | ||||||||||||||
Depreciation and amortization | 1.6 | 3.5 | 1.7 | 4.3 | (0.1 | ) | (5.9 | ) | ||||||||||||
Insurance and claims | 1.3 | 2.9 | 1.0 | 2.5 | 0.3 | 30.0 | ||||||||||||||
Fuel expense | 0.7 | 1.6 | 0.6 | 1.5 | 0.1 | 16.7 | ||||||||||||||
Other operating expenses | 2.0 | 4.4 | 2.0 | 5.1 | — | — | ||||||||||||||
Impairment of goodwill, intangibles and other assets | — | — | 42.4 | 107.6 | (42.4 | ) | 100.0 | |||||||||||||
Total operating expenses | 43.4 | 96.0 | 79.7 | 202.3 | (36.3 | ) | (45.5 | ) | ||||||||||||
Income (loss) from operations | $ | 1.8 | 4.0 | % | $ | (40.3 | ) | (102.3 | )% | $ | 42.1 | NM |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2017 | 2016 | Change | ||||||||
Company driver 1 | 1,809 | 1,544 | 17.2 | % | ||||||
Owner operator 1 | 12,521 | 12,563 | (0.3 | ) | ||||||
Third party 1 | 10,115 | 7,491 | 35.0 | |||||||
Total Miles | 24,445 | 21,598 | 13.2 | |||||||
Revenue per mile | $ | 1.79 | $ | 1.77 | 1.1 | |||||
Cost per mile | $ | 1.40 | $ | 1.34 | 4.5 | % | ||||
¹ - In thousands |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 36.8 | 100.0 | % | $ | 31.5 | 100.0 | % | $ | 5.3 | 16.8 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 9.6 | 26.1 | 8.6 | 27.3 | 1.0 | 11.6 | ||||||||||||||
Salaries, wages and employee benefits | 14.0 | 38.0 | 11.9 | 37.8 | 2.1 | 17.6 | ||||||||||||||
Operating leases | 3.1 | 8.4 | 3.0 | 9.5 | 0.1 | 3.3 | ||||||||||||||
Depreciation and amortization | 1.6 | 4.4 | 1.5 | 4.8 | 0.1 | 6.7 | ||||||||||||||
Insurance and claims | 1.1 | 3.0 | 1.0 | 3.2 | 0.1 | 10.0 | ||||||||||||||
Fuel expense | 1.2 | 3.3 | 1.1 | 3.5 | 0.1 | 9.1 | ||||||||||||||
Other operating expenses | 4.6 | 12.5 | 4.8 | 15.2 | (0.2 | ) | (4.2 | ) | ||||||||||||
Total operating expenses | 35.2 | 95.7 | 31.9 | 101.3 | 3.3 | 10.3 | ||||||||||||||
Income from operations | $ | 1.6 | 4.3 | % | $ | (0.4 | ) | (1.3 | )% | $ | 2.0 | NM |
Intermodal Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 35.3 | 100.0 | % | $ | 24.2 | 100.0 | % | $ | 11.1 | 45.9 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 14.0 | 39.7 | 8.4 | 34.7 | 5.6 | 66.7 | ||||||||||||||
Salaries, wages and employee benefits | 8.0 | 22.7 | 6.0 | 24.8 | 2.0 | 33.3 | ||||||||||||||
Operating leases | 3.1 | 8.8 | 2.9 | 12.0 | 0.2 | 6.9 | ||||||||||||||
Depreciation and amortization | 1.5 | 4.2 | 0.9 | 3.7 | 0.6 | 66.7 | ||||||||||||||
Insurance and claims | 1.3 | 3.7 | 0.5 | 2.0 | 0.8 | 160.0 | ||||||||||||||
Fuel expense | 0.9 | 2.5 | 0.6 | 2.5 | 0.3 | 50.0 | ||||||||||||||
Other operating expenses | 3.4 | 9.6 | 2.1 | 8.7 | 1.3 | 61.9 | ||||||||||||||
Total operating expenses | 32.2 | 91.2 | 21.4 | 88.4 | 10.8 | 50.5 | ||||||||||||||
Income from operations | $ | 3.1 | 8.8 | % | $ | 2.8 | 11.6 | % | $ | 0.3 | 10.7 | % |
Forward Air Corporation | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
June 30, 2017 | December 31, 2016 (a) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10,090 | $ | 8,511 | |||
Accounts receivable, net | 123,535 | 116,602 | |||||
Other current assets | 14,526 | 11,157 | |||||
Total current assets | 148,151 | 136,270 | |||||
Property and equipment | 375,069 | 379,021 | |||||
Less accumulated depreciation and amortization | 185,510 | 178,816 | |||||
Net property and equipment | 189,559 | 200,205 | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 191,535 | 184,675 | |||||
Other acquired intangibles, net of accumulated amortization | 116,231 | 106,650 | |||||
Total net goodwill and other acquired intangibles | 307,766 | 291,325 | |||||
Other assets | 14,211 | 13,491 | |||||
Total assets | $ | 659,687 | $ | 641,291 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 17,642 | $ | 18,012 | |||
Accrued expenses | 34,921 | 31,833 | |||||
Income taxes payable | 1,629 | 70 | |||||
Current portion of debt and capital lease obligations | 462 | 28,012 | |||||
Total current liabilities | 54,654 | 77,927 | |||||
Debt and capital lease obligations, less current portion | 20,983 | 725 | |||||
Other long-term liabilities | 22,148 | 21,699 | |||||
Deferred income taxes | 42,665 | 41,871 | |||||
Shareholders’ equity: | |||||||
Common stock | 301 | 301 | |||||
Additional paid-in capital | 188,663 | 179,512 | |||||
Retained earnings | 330,273 | 319,256 | |||||
Total shareholders’ equity | 519,237 | 499,069 | |||||
Total liabilities and shareholders’ equity | $ | 659,687 | $ | 641,291 | |||
(a) Taken from audited financial statements, which are not presented in their entirety. |
Forward Air Corporation | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
June 30, 2017 | June 30, 2016 | ||||||
Operating activities: | |||||||
Net income | $ | 19,550 | $ | (10,066 | ) | ||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 10,219 | 9,341 | |||||
Impairment of goodwill, intangible and other assets | — | 42,442 | |||||
Share-based compensation | 2,064 | 2,159 | |||||
Loss (gain) on disposal of property and equipment | 19 | (3 | ) | ||||
Provision for loss on receivables | 235 | 184 | |||||
Provision for revenue adjustments | 750 | 406 | |||||
Deferred income tax expense | 879 | (4,150 | ) | ||||
Excess tax benefit for stock options exercised | — | (49 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (8,047 | ) | (5,529 | ) | |||
Prepaid expenses and other current assets | (6,131 | ) | (6,118 | ) | |||
Accounts payable and accrued expenses | (4,617 | ) | (4,851 | ) | |||
Net cash provided by operating activities | 14,921 | 23,766 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 549 | 945 | |||||
Purchases of property and equipment | (2,010 | ) | (13,352 | ) | |||
Acquisition of business, net of cash acquired | (22,500 | ) | — | ||||
Other | 383 | (623 | ) | ||||
Net cash used in investing activities | (23,578 | ) | (13,030 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (14,576 | ) | (13,914 | ) | |||
Proceeds from senior credit facility | 22,000 | — | |||||
Proceeds from exercise of stock options | 3,368 | 213 | |||||
Payments of cash dividends | (4,543 | ) | (3,656 | ) | |||
Repurchase of common stock (repurchase program) | (1,999 | ) | (9,996 | ) | |||
Common stock issued under employee stock purchase plan | 226 | 215 | |||||
Excess tax benefit for stock options exercised | — | 49 | |||||
Cash settlement of share-based awards for tax withholdings | (64 | ) | (5 | ) | |||
Net cash provided by (used in) financing activities | 4,412 | (27,094 | ) | ||||
Net decrease in cash | (4,245 | ) | (16,358 | ) | |||
Cash at beginning of period | 14,335 | 38,037 | |||||
Cash at end of period | $ | 10,090 | $ | 21,679 |
Forward Air Corporation | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Six months ended | |||||||
June 30, 2017 | June 30, 2016 | ||||||
Operating activities: | |||||||
Net income | $ | 33,793 | $ | 3,033 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 20,252 | 19,009 | |||||
Impairment of goodwill, intangible and other assets | — | 42,442 | |||||
Share-based compensation | 4,026 | 4,111 | |||||
Loss on disposal of property and equipment | 507 | 90 | |||||
Provision for loss (recovery) on receivables | 257 | (12 | ) | ||||
Provision for revenue adjustments | 1,468 | 1,205 | |||||
Deferred income tax | 794 | 881 | |||||
Excess tax benefit for stock options exercised | — | (87 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (8,658 | ) | (1,284 | ) | |||
Other current assets | (3,978 | ) | (3,536 | ) | |||
Accounts payable and accrued expenses | 3,520 | (4,646 | ) | ||||
Net cash provided by operating activities | 51,981 | 61,206 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 1,339 | 1,100 | |||||
Purchases of property and equipment | (4,662 | ) | (16,040 | ) | |||
Acquisition of business, net of cash acquired | (22,500 | ) | (1,700 | ) | |||
Other | 512 | (601 | ) | ||||
Net cash used in investing activities | (25,311 | ) | (17,241 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (42,433 | ) | (27,883 | ) | |||
Proceeds from senior credit facility | 35,000 | — | |||||
Proceeds from exercise of stock options | 4,892 | 1,094 | |||||
Payments of cash dividends | (9,082 | ) | (7,334 | ) | |||
Repurchase of common stock (repurchase program) | (11,995 | ) | (19,991 | ) | |||
Common stock issued under employee stock purchase plan | 226 | 215 | |||||
Excess tax benefit for stock options exercised | — | 87 | |||||
Cash settlement of share-based awards for tax withholdings | (1,699 | ) | (1,786 | ) | |||
Net cash used in financing activities | (25,091 | ) | (55,598 | ) | |||
Net increase (decrease) in cash | 1,579 | (11,633 | ) | ||||
Cash at beginning of period | 8,511 | 33,312 | |||||
Cash at end of period | $ | 10,090 | $ | 21,679 |
Forward Air Corporation | ||||||||||||||||||||
Reconciliation to U.S. GAAP | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended June 30, 2016 | ||||||||||||||||||||
Operating Income | Other, Net | Income before taxes | Income taxes | Effective tax rate | Net Income | Diluted earnings per share | ||||||||||||||
Reported (GAAP) | $ | (14.3 | ) | $ | (0.6 | ) | $ | (14.9 | ) | $ | (4.8 | ) | 32.2 | % | $ | (10.1 | ) | $ | (0.33 | ) |
Items impacting comparability: | ||||||||||||||||||||
TQI impairment charge | 42.4 | — | 42.4 | 15.0 | 4.9 | % | 27.4 | 0.90 | ||||||||||||
After considering items (Non-GAAP) | $ | 28.1 | $ | (0.6 | ) | $ | 27.5 | $ | 10.2 | 37.1 | % | $ | 17.3 | $ | 0.57 |
Forward Air Corporation | ||||||||||||||||||||
Reconciliation to U.S. GAAP | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended September 30, 2016 | ||||||||||||||||||||
Operating Income | Other, Net | Income before taxes | Income taxes | Effective tax rate | Net Income | Diluted earnings per share | ||||||||||||||
Reported (GAAP) | $ | 24.7 | $ | (0.2 | ) | $ | 24.5 | $ | 12.6 | 51.3 | % | $ | 11.9 | $ | 0.39 | |||||
Items impacting comparability: | ||||||||||||||||||||
Impact of TQI impairment on income taxes | — | — | — | (3.6 | ) | 14.3 | % | 3.6 | 0.12 | |||||||||||
After considering items (Non-GAAP) | $ | 24.7 | $ | (0.2 | ) | $ | 24.5 | $ | 9.0 | 37.0 | % | $ | 15.5 | $ | 0.51 |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands) | |||
(Unaudited) | |||
Three months ended | |||
Actual | June 30, 2017 | ||
Fully diluted share count | 30,114 | ||
Projected | Full year 2017 | ||
Projected tax rate | 36.4 | % | |
Projected year end fully diluted share count (before consideration of future share repurchases) | 30,300 | ||
Projected capital expenditures, net | $ | 49,500 | |