Forward Air Corporation | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 155,703 | $ | 144,337 | $ | 448,571 | $ | 423,410 | |||||||
Truckload Premium Services | 45,941 | 42,210 | 132,912 | 120,270 | |||||||||||
Pool Distribution | 39,180 | 36,437 | 113,838 | 101,153 | |||||||||||
Intermodal | 42,292 | 27,579 | 105,853 | 76,391 | |||||||||||
Eliminations and other operations | (2,915 | ) | (1,011 | ) | (6,474 | ) | (3,487 | ) | |||||||
Operating revenue | 280,201 | 249,552 | 794,700 | 717,737 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 123,326 | 105,039 | 342,017 | 300,783 | |||||||||||
Salaries, wages and employee benefits | 64,882 | 60,161 | 191,282 | 175,857 | |||||||||||
Operating leases | 16,809 | 16,215 | 47,205 | 44,684 | |||||||||||
Depreciation and amortization | 10,326 | 9,399 | 30,578 | 28,409 | |||||||||||
Insurance and claims | 7,844 | 7,170 | 21,379 | 19,213 | |||||||||||
Fuel expense | 4,096 | 3,416 | 11,448 | 9,375 | |||||||||||
Other operating expenses | 26,020 | 23,452 | 70,895 | 65,218 | |||||||||||
Impairment of goodwill, intangibles and other assets | — | — | — | 42,442 | |||||||||||
Total operating expenses | 253,303 | 224,852 | 714,804 | 685,981 | |||||||||||
Operating (loss) income: | |||||||||||||||
Expedited LTL | 23,204 | 21,014 | 64,596 | 63,026 | |||||||||||
Truckload Premium Services | 136 | 2,038 | 3,699 | (36,679 | ) | ||||||||||
Pool Distribution | 681 | 66 | 3,672 | (191 | ) | ||||||||||
Intermodal | 3,480 | 3,041 | 9,133 | 8,170 | |||||||||||
Other operations | (603 | ) | (1,459 | ) | (1,204 | ) | (2,570 | ) | |||||||
Income from operations | 26,898 | 24,700 | 79,896 | 31,756 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (288 | ) | (216 | ) | (806 | ) | (1,230 | ) | |||||||
Other, net | (2 | ) | (4 | ) | (11 | ) | (149 | ) | |||||||
Total other income (expense) | (290 | ) | (220 | ) | (817 | ) | (1,379 | ) | |||||||
Income before income taxes | 26,608 | 24,480 | 79,079 | 30,377 | |||||||||||
Income tax expense | 8,453 | 12,549 | 27,131 | 15,413 | |||||||||||
Net income and comprehensive income | $ | 18,155 | $ | 11,931 | $ | 51,948 | $ | 14,964 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.60 | $ | 0.39 | $ | 1.72 | $ | 0.49 | |||||||
Diluted | $ | 0.60 | $ | 0.39 | $ | 1.71 | $ | 0.49 | |||||||
Dividends per share: | $ | 0.15 | $ | 0.12 | $ | 0.45 | $ | 0.36 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 155.7 | 100.0 | % | $ | 144.3 | 100.0 | % | $ | 11.4 | 7.9 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 64.0 | 41.1 | 56.3 | 39.0 | 7.7 | 13.7 | ||||||||||||||
Salaries, wages and employee benefits | 35.2 | 22.6 | 33.8 | 23.4 | 1.4 | 4.1 | ||||||||||||||
Operating leases | 9.4 | 6.0 | 9.0 | 6.2 | 0.4 | 4.4 | ||||||||||||||
Depreciation and amortization | 5.4 | 3.5 | 5.5 | 3.8 | (0.1 | ) | (1.8 | ) | ||||||||||||
Insurance and claims | 3.3 | 2.1 | 3.9 | 2.7 | (0.6 | ) | (15.4 | ) | ||||||||||||
Fuel expense | 0.9 | 0.6 | 0.8 | 0.6 | 0.1 | 12.5 | ||||||||||||||
Other operating expenses | 14.3 | 9.2 | 14.0 | 9.7 | 0.3 | 2.1 | ||||||||||||||
Total operating expenses | 132.5 | 85.1 | 123.3 | 85.4 | 9.2 | 7.5 | ||||||||||||||
Income from operations | $ | 23.2 | 14.9 | % | $ | 21.0 | 14.6 | % | $ | 2.2 | 10.5 | % |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2017 | 2016 | Change | ||||||||
Operating ratio | 85.1 | % | 85.4 | % | (0.4 | )% | ||||
Business days | 63.0 | 64.0 | (1.6 | ) | ||||||
Business weeks | 12.6 | 12.8 | (1.6 | ) | ||||||
Expedited LTL: | ||||||||||
Tonnage | ||||||||||
Total pounds ¹ | 636,009 | 588,929 | 8.0 | |||||||
Average weekly pounds ¹ | 50,477 | 46,010 | 9.7 | |||||||
Linehaul shipments | ||||||||||
Total linehaul | 986,632 | 909,787 | 8.4 | |||||||
Average weekly | 78,304 | 71,077 | 10.2 | |||||||
Forward Air Complete shipments | 242,902 | 195,594 | 24.2 | |||||||
As a percentage of linehaul shipments | 24.6 | % | 21.5 | % | 14.4 | |||||
Average linehaul shipment size | 645 | 647 | (0.3 | ) | ||||||
Revenue per pound 2 | ||||||||||
Linehaul yield | $ | 16.89 | $ | 17.71 | (3.7 | ) | ||||
Fuel surcharge | 1.11 | 1.06 | 0.2 | |||||||
Forward Air Complete | 3.94 | 3.49 | 2.1 | |||||||
Total Expedited LTL yield | $ | 21.94 | $ | 22.26 | (1.4 | )% | ||||
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 | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 45.9 | 100.0 | % | $ | 42.2 | 100.0 | % | $ | 3.7 | 8.8 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 33.9 | 73.9 | 29.7 | 70.4 | 4.2 | 14.1 | ||||||||||||||
Salaries, wages and employee benefits | 5.0 | 10.9 | 4.9 | 11.6 | 0.1 | 2.0 | ||||||||||||||
Operating leases | 0.3 | 0.6 | 0.1 | 0.2 | 0.2 | 200.0 | ||||||||||||||
Depreciation and amortization | 1.6 | 3.5 | 1.5 | 3.6 | 0.1 | 6.7 | ||||||||||||||
Insurance and claims | 2.0 | 4.4 | 1.1 | 2.6 | 0.9 | 81.8 | ||||||||||||||
Fuel expense | 0.8 | 1.7 | 0.7 | 1.7 | 0.1 | 14.3 | ||||||||||||||
Other operating expenses | 2.2 | 4.8 | 2.2 | 5.2 | — | — | ||||||||||||||
Total operating expenses | 45.8 | 99.8 | 40.2 | 95.3 | 5.6 | 13.9 | ||||||||||||||
Income from operations | $ | 0.1 | 0.2 | % | $ | 2.0 | 4.7 | % | $ | (1.9 | ) | (95.0 | )% |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2017 | 2016 | Change | ||||||||
Company driver 1 | 1,990 | 1,761 | 13.0 | % | ||||||
Owner operator 1 | 11,454 | 13,125 | (12.7 | ) | ||||||
Third party 1 | 11,263 | 8,339 | 35.1 | |||||||
Total Miles | 24,707 | 23,225 | 6.4 | |||||||
Revenue per mile | $ | 1.79 | $ | 1.78 | 0.6 | |||||
Cost per mile | $ | 1.44 | $ | 1.37 | 5.1 | % | ||||
¹ - In thousands |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 39.2 | 100.0 | % | $ | 36.4 | 100.0 | % | $ | 2.8 | 7.7 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 10.4 | 26.5 | 10.1 | 27.7 | 0.3 | 3.0 | ||||||||||||||
Salaries, wages and employee benefits | 15.3 | 39.0 | 14.4 | 39.6 | 0.9 | 6.3 | ||||||||||||||
Operating leases | 3.3 | 8.4 | 3.3 | 9.1 | — | — | ||||||||||||||
Depreciation and amortization | 1.7 | 4.4 | 1.4 | 3.8 | 0.3 | 21.4 | ||||||||||||||
Insurance and claims | 1.1 | 2.8 | 1.0 | 2.7 | 0.1 | 10.0 | ||||||||||||||
Fuel expense | 1.3 | 3.3 | 1.2 | 3.3 | 0.1 | 8.3 | ||||||||||||||
Other operating expenses | 5.4 | 13.8 | 4.9 | 13.5 | 0.5 | 10.2 | ||||||||||||||
Total operating expenses | 38.5 | 98.2 | 36.3 | 99.7 | 2.2 | 6.1 | ||||||||||||||
Income from operations | $ | 0.7 | 1.8 | % | $ | 0.1 | 0.3 | % | $ | 0.6 | 600.0 | % |
Intermodal Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2017 | Revenue | 2016 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 42.3 | 100.0 | % | $ | 27.6 | 100.0 | % | $ | 14.7 | 53.3 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 17.5 | 41.4 | 9.7 | 35.1 | 7.8 | 80.4 | ||||||||||||||
Salaries, wages and employee benefits | 9.0 | 21.3 | 6.6 | 23.9 | 2.4 | 36.4 | ||||||||||||||
Operating leases | 3.8 | 9.0 | 3.3 | 12.0 | 0.5 | 15.2 | ||||||||||||||
Depreciation and amortization | 1.7 | 4.0 | 1.0 | 3.6 | 0.7 | 70.0 | ||||||||||||||
Insurance and claims | 1.2 | 2.8 | 0.8 | 2.9 | 0.4 | 50.0 | ||||||||||||||
Fuel expense | 1.1 | 2.6 | 0.7 | 2.5 | 0.4 | 57.1 | ||||||||||||||
Other operating expenses | 4.5 | 10.6 | 2.5 | 9.1 | 2.0 | 80.0 | ||||||||||||||
Total operating expenses | 38.8 | 91.7 | 24.6 | 89.1 | 14.2 | 57.7 | ||||||||||||||
Income from operations | $ | 3.5 | 8.3 | % | $ | 3.0 | 10.9 | % | $ | 0.5 | 16.7 | % |
Forward Air Corporation | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
September 30, 2017 | December 31, 2016 (a) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 12,423 | $ | 8,511 | |||
Accounts receivable, net | 132,100 | 116,602 | |||||
Other current assets | 13,319 | 11,157 | |||||
Total current assets | 157,842 | 136,270 | |||||
Property and equipment | 383,890 | 379,021 | |||||
Less accumulated depreciation and amortization | 192,109 | 178,816 | |||||
Net property and equipment | 191,781 | 200,205 | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 191,535 | 184,675 | |||||
Other acquired intangibles, net of accumulated amortization | 113,562 | 106,650 | |||||
Total net goodwill and other acquired intangibles | 305,097 | 291,325 | |||||
Other assets | 14,448 | 13,491 | |||||
Total assets | $ | 669,168 | $ | 641,291 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 22,377 | $ | 18,012 | |||
Accrued expenses | 35,354 | 31,903 | |||||
Current portion of debt and capital lease obligations | 466 | 28,012 | |||||
Total current liabilities | 58,197 | 77,927 | |||||
Debt and capital lease obligations, less current portion | 40,696 | 725 | |||||
Other long-term liabilities | 22,681 | 21,699 | |||||
Deferred income taxes | 42,004 | 41,871 | |||||
Shareholders’ equity: | |||||||
Common stock | 295 | 301 | |||||
Additional paid-in capital | 191,352 | 179,512 | |||||
Retained earnings | 313,943 | 319,256 | |||||
Total shareholders’ equity | 505,590 | 499,069 | |||||
Total liabilities and shareholders’ equity | $ | 669,168 | $ | 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 | |||||||
September 30, 2017 | September 30, 2016 | ||||||
Operating activities: | |||||||
Net income | $ | 18,155 | $ | 11,931 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 10,326 | 9,399 | |||||
Share-based compensation | 1,939 | 2,093 | |||||
Loss on disposal of property and equipment | 194 | 111 | |||||
Provision for loss on receivables | 1,531 | 280 | |||||
Provision for revenue adjustments | 663 | 365 | |||||
Deferred income tax expense | (662 | ) | (220 | ) | |||
Excess tax benefit for stock options exercised | — | (50 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (10,759 | ) | (6,716 | ) | |||
Prepaid expenses and other current assets | 2,567 | 2,182 | |||||
Accounts payable and accrued expenses | 1,776 | 14,026 | |||||
Net cash provided by operating activities | 25,730 | 33,401 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 158 | 695 | |||||
Purchases of property and equipment | (8,948 | ) | (12,684 | ) | |||
Acquisition of business, net of cash acquired | — | (10,100 | ) | ||||
Other | (585 | ) | (71 | ) | |||
Net cash used in investing activities | (9,375 | ) | (22,160 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (282 | ) | (13,942 | ) | |||
Proceeds from senior credit facility | 20,000 | — | |||||
Proceeds from exercise of stock options | 750 | 5,947 | |||||
Payments of cash dividends | (4,502 | ) | (3,653 | ) | |||
Repurchase of common stock (repurchase program) | (29,988 | ) | (9,995 | ) | |||
Excess tax benefit for stock options exercised | — | 50 | |||||
Cash settlement of share-based awards for tax withholdings | — | (14 | ) | ||||
Net cash used in financing activities | (14,022 | ) | (21,607 | ) | |||
Net increase (decrease) in cash | 2,333 | (10,366 | ) | ||||
Cash at beginning of period | 10,090 | 21,679 | |||||
Cash at end of period | $ | 12,423 | $ | 11,313 |
Forward Air Corporation | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Nine months ended | |||||||
September 30, 2017 | September 30, 2016 | ||||||
Operating activities: | |||||||
Net income | $ | 51,948 | $ | 14,964 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 30,578 | 28,409 | |||||
Impairment of goodwill, intangible and other assets | — | 42,442 | |||||
Share-based compensation | 5,965 | 6,204 | |||||
Loss on disposal of property and equipment | 701 | 201 | |||||
Provision for loss on receivables | 1,788 | 268 | |||||
Provision for revenue adjustments | 2,131 | 1,570 | |||||
Deferred income tax | 132 | 661 | |||||
Excess tax benefit for stock options exercised | — | (137 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (19,417 | ) | (8,000 | ) | |||
Other current assets | (1,411 | ) | (1,354 | ) | |||
Accounts payable and accrued expenses | 5,296 | 9,380 | |||||
Net cash provided by operating activities | 77,711 | 94,608 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 1,497 | 1,795 | |||||
Purchases of property and equipment | (13,610 | ) | (28,725 | ) | |||
Acquisition of business, net of cash acquired | (22,500 | ) | (11,800 | ) | |||
Other | (73 | ) | (673 | ) | |||
Net cash used in investing activities | (34,686 | ) | (39,403 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (42,715 | ) | (41,825 | ) | |||
Proceeds from senior credit facility | 55,000 | — | |||||
Proceeds from exercise of stock options | 5,642 | 7,041 | |||||
Payments of cash dividends | (13,584 | ) | (10,987 | ) | |||
Repurchase of common stock (repurchase program) | (41,983 | ) | (29,986 | ) | |||
Common stock issued under employee stock purchase plan | 226 | 215 | |||||
Excess tax benefit for stock options exercised | — | 137 | |||||
Cash settlement of share-based awards for tax withholdings | (1,699 | ) | (1,800 | ) | |||
Net cash used in financing activities | (39,113 | ) | (77,205 | ) | |||
Net increase (decrease) in cash | 3,912 | (22,000 | ) | ||||
Cash at beginning of period | 8,511 | 33,312 | |||||
Cash at end of period | $ | 12,423 | $ | 11,312 |
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 |
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 |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
Three months ended | |||
Actual | September 30, 2017 | ||
Net income | $ | 18,155 | |
Income allocated to participating securities | (145 | ) | |
Numerator for diluted income per share - net income | $ | 18,010 | |
Fully diluted share count | 29,940 | ||
Diluted earnings per share | $ | 0.60 | |
Projected | Full year 2017 | ||
Projected tax rate | 35.8 | % | |
Projected year end fully diluted share count (before consideration of future share repurchases) | 30,000 | ||
Projected capital expenditures, net | $ | 39,700 | |