Forward Air Corporation | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||
(As Adjusted) | (As Adjusted) | ||||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 192,891 | $ | 160,472 | $ | 362,835 | $ | 309,237 | |||||||
Truckload Premium Services | 48,947 | 50,451 | 95,040 | 97,538 | |||||||||||
Pool Distribution | 43,305 | 37,756 | 85,976 | 76,558 | |||||||||||
Intermodal | 49,162 | 37,240 | 97,731 | 66,147 | |||||||||||
Eliminations and other operations | (3,962 | ) | (2,043 | ) | (8,631 | ) | (3,559 | ) | |||||||
Operating revenue | 330,343 | 283,876 | 632,951 | 545,921 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 155,716 | 131,102 | 295,382 | 248,796 | |||||||||||
Salaries, wages and employee benefits | 72,073 | 65,018 | 141,655 | 126,946 | |||||||||||
Operating leases | 18,006 | 14,796 | 35,970 | 30,397 | |||||||||||
Depreciation and amortization | 10,362 | 10,219 | 21,052 | 20,252 | |||||||||||
Insurance and claims | 10,086 | 7,730 | 17,238 | 13,536 | |||||||||||
Fuel expense | 5,598 | 3,671 | 11,152 | 7,351 | |||||||||||
Other operating expenses | 25,632 | 21,344 | 53,397 | 44,905 | |||||||||||
Total operating expenses | 297,473 | 253,880 | 575,846 | 492,183 | |||||||||||
Operating (loss) income: | |||||||||||||||
Expedited LTL | 26,526 | 23,047 | 47,298 | 41,975 | |||||||||||
Truckload Premium Services | 1,717 | 1,855 | 1,674 | 3,610 | |||||||||||
Pool Distribution | 1,589 | 1,625 | 2,960 | 2,991 | |||||||||||
Intermodal | 5,543 | 3,209 | 9,012 | 5,763 | |||||||||||
Other operations | (2,505 | ) | 260 | (3,839 | ) | (601 | ) | ||||||||
Income from operations | 32,870 | 29,996 | 57,105 | 53,738 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (483 | ) | (236 | ) | (854 | ) | (518 | ) | |||||||
Other, net | (1 | ) | 18 | (1 | ) | (8 | ) | ||||||||
Total other income (expense) | (484 | ) | (218 | ) | (855 | ) | (526 | ) | |||||||
Income before income taxes | 32,386 | 29,778 | 56,250 | 53,212 | |||||||||||
Income tax expense | 8,088 | 10,112 | 14,212 | 18,966 | |||||||||||
Net income and comprehensive income | $ | 24,298 | $ | 19,666 | $ | 42,038 | $ | 34,246 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.83 | $ | 0.65 | $ | 1.42 | $ | 1.13 | |||||||
Diluted | $ | 0.82 | $ | 0.65 | $ | 1.42 | $ | 1.13 | |||||||
Dividends per share: | $ | 0.15 | $ | 0.15 | $ | 0.30 | $ | 0.30 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 192.9 | 100.0 | % | $ | 160.5 | 100.0 | % | $ | 32.4 | 20.2 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 90.5 | 46.9 | 69.0 | 43.0 | 21.5 | 31.2 | ||||||||||||||
Salaries, wages and employee benefits | 41.2 | 21.4 | 37.0 | 23.1 | 4.2 | 11.4 | ||||||||||||||
Operating leases | 10.2 | 5.3 | 9.0 | 5.6 | 1.2 | 13.3 | ||||||||||||||
Depreciation and amortization | 5.6 | 2.9 | 5.5 | 3.4 | 0.1 | 1.8 | ||||||||||||||
Insurance and claims | 3.6 | 1.9 | 4.2 | 2.6 | (0.6 | ) | (14.3 | ) | ||||||||||||
Fuel expense | 1.6 | 0.8 | 0.9 | 0.6 | 0.7 | 77.8 | ||||||||||||||
Other operating expenses | 13.7 | 7.1 | 11.8 | 7.3 | 1.9 | 16.1 | ||||||||||||||
Total operating expenses | 166.4 | 86.3 | 137.4 | 85.6 | 29.0 | 21.1 | ||||||||||||||
Income from operations | $ | 26.5 | 13.7 | % | $ | 23.1 | 14.4 | % | $ | 3.4 | 14.7 | % |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Business days | 64 | 64 | — | % | ||||||
Tonnage | ||||||||||
Total pounds ¹ | 668,129 | 615,315 | 8.6 | |||||||
Pounds per day ¹ | 10,440 | 9,614 | 8.6 | |||||||
Shipments | ||||||||||
Total shipments | 1,094,886 | 1,011,934 | 8.2 | |||||||
Shipments per day | 17,108 | 15,811 | 8.2 | |||||||
Total shipments with pickup and/or delivery | 266,628 | 243,969 | 9.3 | |||||||
Revenue per hundredweight | $ | 25.83 | $ | 23.69 | 9.0 | |||||
Revenue per hundredweight, ex fuel | 21.83 | 21.22 | 2.9 | |||||||
Revenue per shipment | 158 | 144 | 9.7 | |||||||
Revenue per shipment, ex fuel | 133 | 129 | 3.1 | |||||||
Weight per shipment | 610 | 608 | 0.3 | % | ||||||
¹ - In thousands |
Truckload Premium Services Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 48.9 | 100.0 | % | $ | 50.4 | 100.0 | % | $ | (1.5 | ) | (3.0 | )% | |||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 37.0 | 75.7 | 37.9 | 75.2 | (0.9 | ) | (2.4 | ) | ||||||||||||
Salaries, wages and employee benefits | 4.6 | 9.4 | 5.0 | 9.9 | (0.4 | ) | (8.0 | ) | ||||||||||||
Operating leases | 0.1 | 0.2 | 0.1 | 0.2 | — | — | ||||||||||||||
Depreciation and amortization | 1.6 | 3.3 | 1.6 | 3.2 | — | — | ||||||||||||||
Insurance and claims | 0.9 | 1.8 | 1.3 | 2.6 | (0.4 | ) | (30.8 | ) | ||||||||||||
Fuel expense | 0.8 | 1.6 | 0.7 | 1.4 | 0.1 | 14.3 | ||||||||||||||
Other operating expenses | 2.2 | 4.5 | 2.0 | 3.9 | 0.2 | 10.0 | ||||||||||||||
Total operating expenses | 47.2 | 96.5 | 48.6 | 96.4 | (1.4 | ) | (2.9 | ) | ||||||||||||
Income from operations | $ | 1.7 | 3.5 | % | $ | 1.8 | 3.6 | % | $ | (0.1 | ) | (5.6 | )% |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Total Miles ¹ | 20,136 | 24,450 | (17.6 | )% | ||||||
Empty Miles Percentage | 9.3 | % | 10.0 | % | (7.0 | ) | ||||
Tractors (avg) | 321 | 409 | (21.5 | ) | ||||||
Miles per tractor per week 2 | 2,284 | 2,740 | (16.6 | ) | ||||||
Revenue per mile | $ | 2.32 | $ | 2.00 | 16.0 | |||||
Cost per mile | $ | 1.86 | $ | 1.61 | 15.5 | % | ||||
¹ - In thousands | ||||||||||
2 - Calculated using Company driver and owner operator miles |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 43.3 | 100.0 | % | $ | 37.8 | 100.0 | % | $ | 5.5 | 14.6 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 12.4 | 28.6 | 10.6 | 28.0 | 1.8 | 17.0 | ||||||||||||||
Salaries, wages and employee benefits | 15.9 | 36.7 | 14.0 | 37.1 | 1.9 | 13.6 | ||||||||||||||
Operating leases | 3.8 | 8.8 | 3.1 | 8.2 | 0.7 | 22.6 | ||||||||||||||
Depreciation and amortization | 1.7 | 3.9 | 1.6 | 4.2 | 0.1 | 6.3 | ||||||||||||||
Insurance and claims | 1.0 | 2.3 | 1.1 | 2.9 | (0.1 | ) | (9.1 | ) | ||||||||||||
Fuel expense | 1.6 | 3.7 | 1.2 | 3.2 | 0.4 | 33.3 | ||||||||||||||
Other operating expenses | 5.3 | 12.3 | 4.6 | 12.2 | 0.7 | 15.2 | ||||||||||||||
Total operating expenses | 41.7 | 96.3 | 36.2 | 95.8 | 5.5 | 15.2 | ||||||||||||||
Income from operations | $ | 1.6 | 3.7 | % | $ | 1.6 | 4.2 | % | $ | — | — | % |
Pool Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Cartons¹ | 20,101 | 18,078 | 11.2 | % | ||||||
Revenue per Carton | $ | 2.15 | $ | 2.09 | 2.9 | % | ||||
Terminals | 28 | 28 | — | % | ||||||
¹ In thousands |
Intermodal Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 49.2 | 100.0 | % | $ | 37.2 | 100.0 | % | $ | 12.0 | 32.3 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 19.4 | 39.4 | 15.3 | 41.1 | 4.1 | 26.8 | ||||||||||||||
Salaries, wages and employee benefits | 10.5 | 21.3 | 8.6 | 23.1 | 1.9 | 22.1 | ||||||||||||||
Operating leases | 3.9 | 7.9 | 3.1 | 8.4 | 0.8 | 25.8 | ||||||||||||||
Depreciation and amortization | 1.5 | 3.1 | 1.5 | 4.0 | — | — | ||||||||||||||
Insurance and claims | 1.4 | 2.8 | 1.3 | 3.5 | 0.1 | 7.7 | ||||||||||||||
Fuel expense | 1.7 | 3.5 | 0.9 | 2.4 | 0.8 | 88.9 | ||||||||||||||
Other operating expenses | 5.2 | 10.6 | 3.3 | 8.9 | 1.9 | 57.6 | ||||||||||||||
Total operating expenses | 43.6 | 88.6 | 34.0 | 91.4 | 9.6 | 28.2 | ||||||||||||||
Income from operations | $ | 5.6 | 11.4 | % | $ | 3.2 | 8.6 | % | $ | 2.4 | 75.0 | % |
Intermodal Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Drayage shipments | 74,021 | 57,591 | 28.5 | % | ||||||
Drayage revenue per Shipment | $ | 565 | $ | 535 | 5.6 | % | ||||
Number of Locations | 19 | 19 | — | % |
Forward Air Corporation | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
June 30, 2018 | December 31, 2017 | ||||||
(As Adjusted) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 20,102 | $ | 3,893 | |||
Accounts receivable, net | 152,393 | 147,948 | |||||
Other current assets | 21,010 | 15,807 | |||||
Total current assets | 193,505 | 167,648 | |||||
Property and equipment | 401,507 | 399,235 | |||||
Less accumulated depreciation and amortization | 197,264 | 193,123 | |||||
Net property and equipment | 204,243 | 206,112 | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 191,671 | 191,671 | |||||
Other acquired intangibles, net of accumulated amortization | 106,741 | 111,247 | |||||
Total goodwill and other acquired intangibles, net | 298,412 | 302,918 | |||||
Other assets | 15,132 | 15,944 | |||||
Total assets | $ | 711,292 | $ | 692,622 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 32,036 | $ | 30,723 | |||
Accrued expenses | 37,337 | 35,069 | |||||
Current portion of debt and capital lease obligations | 344 | 359 | |||||
Total current liabilities | 69,717 | 66,151 | |||||
Debt and capital lease obligations, less current portion | 40,453 | 40,588 | |||||
Other long-term liabilities | 25,678 | 24,104 | |||||
Deferred income taxes | 33,574 | 29,080 | |||||
Shareholders’ equity: | |||||||
Common stock | 291 | 295 | |||||
Additional paid-in capital | 201,373 | 195,346 | |||||
Retained earnings | 340,206 | 337,058 | |||||
Total shareholders’ equity | 541,870 | 532,699 | |||||
Total liabilities and shareholders’ equity | $ | 711,292 | $ | 692,622 |
Forward Air Corporation | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
June 30, 2018 | June 30, 2017 | ||||||
(As Adjusted) | |||||||
Operating activities: | |||||||
Net income | $ | 24,298 | $ | 19,666 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 10,362 | 10,219 | |||||
Share-based compensation | 2,417 | 2,064 | |||||
(Gain) loss on disposal of property and equipment | (216 | ) | 19 | ||||
Provision for loss on receivables | 323 | 235 | |||||
Provision for revenue adjustments | 1,012 | 750 | |||||
Deferred income tax expense | 781 | 950 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (7,537 | ) | (9,014 | ) | |||
Prepaid expenses and other current assets | (6,354 | ) | (6,131 | ) | |||
Income taxes | (3,196 | ) | (6,697 | ) | |||
Accounts payable and accrued expenses | 4,288 | 2,859 | |||||
Net cash provided by operating activities | 26,178 | 14,920 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 4,195 | 549 | |||||
Purchases of property and equipment | (11,385 | ) | (2,010 | ) | |||
Acquisition of business, net of cash acquired | — | (22,500 | ) | ||||
Other | (257 | ) | 384 | ||||
Net cash used in investing activities | (7,447 | ) | (23,577 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (77 | ) | (76 | ) | |||
Proceeds from senior credit facility | — | 22,000 | |||||
Payments on line of credit | — | (14,500 | ) | ||||
Proceeds from exercise of stock options | 1,112 | 3,368 | |||||
Payments of cash dividends | (4,415 | ) | (4,543 | ) | |||
Repurchase of common stock (repurchase program) | (8,172 | ) | (1,999 | ) | |||
Common stock issued under employee stock purchase plan | 237 | 226 | |||||
Cash settlement of share-based awards for tax withholdings | (49 | ) | (64 | ) | |||
Net cash (used in) provided by financing activities | (11,364 | ) | 4,412 | ||||
Net increase (decrease) in cash | 7,367 | (4,245 | ) | ||||
Cash at beginning of period | 12,735 | 14,335 | |||||
Cash at end of period | $ | 20,102 | $ | 10,090 |
Forward Air Corporation | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Six months ended | |||||||
June 30, 2018 | June 30, 2017 | ||||||
Operating activities: | |||||||
Net income | $ | 42,038 | $ | 34,246 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 21,052 | 20,252 | |||||
Share-based compensation | 4,678 | 4,026 | |||||
(Gain) loss on disposal of property and equipment | (134 | ) | 507 | ||||
Provision for loss on receivables | 457 | 257 | |||||
Provision for revenue adjustments | 1,829 | 1,468 | |||||
Deferred income tax | 4,494 | 1,081 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (6,732 | ) | (10,484 | ) | |||
Prepaid expenses and other current assets | (3,639 | ) | (3,978 | ) | |||
Income taxes | (1,428 | ) | 1,737 | ||||
Accounts payable and accrued expenses | 4,375 | 2,868 | |||||
Net cash provided by operating activities | 66,990 | 51,980 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 4,839 | 1,339 | |||||
Purchases of property and equipment | (17,606 | ) | (4,662 | ) | |||
Acquisition of business, net of cash acquired | — | (22,500 | ) | ||||
Other | (347 | ) | 513 | ||||
Net cash used in investing activities | (13,114 | ) | (25,310 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (151 | ) | (27,933 | ) | |||
Proceeds from senior credit facility | — | 35,000 | |||||
Payments on line of credit | — | (14,500 | ) | ||||
Proceeds from exercise of stock options | 1,112 | 4,892 | |||||
Payments of cash dividends | (8,828 | ) | (9,082 | ) | |||
Repurchase of common stock (repurchase program) | (28,165 | ) | (11,995 | ) | |||
Common stock issued under employee stock purchase plan | 237 | 226 | |||||
Cash settlement of share-based awards for tax withholdings | (1,872 | ) | (1,699 | ) | |||
Net cash used in financing activities | (37,667 | ) | (25,091 | ) | |||
Net increase in cash | 16,209 | 1,579 | |||||
Cash at beginning of period | 3,893 | 8,511 | |||||
Cash at end of period | $ | 20,102 | $ | 10,090 |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
Three months ended | |||
Actual | June 30, 2018 | ||
Net income | $ | 24,298 | |
Income allocated to participating securities | (209 | ) | |
Numerator for diluted income per share - net income | $ | 24,089 | |
Fully diluted share count | 29,272 | ||
Diluted earnings per share | $ | 0.82 | |
Projected | Full year 2018 | ||
Projected tax rate | 25.7 | % | |
Projected capital expenditures, net | $ | 40,500 | |
Projected | Three months ended December 31, 2018 | ||
Projected period end fully diluted share count | 28,800 | ||