Forward Air Corporation | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Year ended | ||||||||||||||
December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||||||||
(As Adjusted) | (As Adjusted) | ||||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 196,220 | $ | 181,202 | $ | 747,562 | $ | 655,838 | |||||||
Truckload Premium Services | 49,600 | 52,753 | 192,582 | 201,752 | |||||||||||
Intermodal | 52,730 | 44,377 | 201,006 | 154,684 | |||||||||||
Pool Distribution | 60,861 | 51,742 | 194,117 | 168,483 | |||||||||||
Eliminations and other operations | (2,850 | ) | (4,938 | ) | (14,381 | ) | (11,411 | ) | |||||||
Operating revenue | 356,561 | 325,136 | 1,320,886 | 1,169,346 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 162,804 | 155,964 | 613,636 | 545,091 | |||||||||||
Salaries, wages and employee benefits | 82,548 | 73,562 | 300,230 | 265,842 | |||||||||||
Operating leases | 21,036 | 16,594 | 75,677 | 63,799 | |||||||||||
Depreciation and amortization | 10,837 | 10,477 | 42,183 | 41,055 | |||||||||||
Insurance and claims | 8,738 | 8,199 | 35,180 | 29,578 | |||||||||||
Fuel expense | 6,335 | 5,094 | 23,121 | 16,542 | |||||||||||
Other operating expenses | 29,216 | 27,403 | 108,828 | 98,682 | |||||||||||
Total operating expenses | 321,514 | 297,293 | 1,198,855 | 1,060,589 | |||||||||||
Income (loss) from operations | |||||||||||||||
Expedited LTL | 25,361 | 22,805 | 96,385 | 87,969 | |||||||||||
Truckload Premium Services | 1,708 | (519 | ) | 5,055 | 3,215 | ||||||||||
Intermodal | 6,933 | 3,415 | 23,266 | 12,963 | |||||||||||
Pool Distribution | 2,175 | 2,706 | 5,870 | 6,378 | |||||||||||
Other operations | (1,130 | ) | (564 | ) | (8,545 | ) | (1,768 | ) | |||||||
Income from operations | 35,047 | 27,843 | 122,031 | 108,757 | |||||||||||
Other expense: | |||||||||||||||
Interest expense | (457 | ) | (403 | ) | (1,783 | ) | (1,209 | ) | |||||||
Other, net | — | — | (2 | ) | (11 | ) | |||||||||
Total other expense | (457 | ) | (403 | ) | (1,785 | ) | (1,220 | ) | |||||||
Income before income taxes | 34,590 | 27,440 | 120,246 | 107,537 | |||||||||||
Income tax expense (benefit) | 6,906 | (7,241 | ) | 28,195 | 20,282 | ||||||||||
Net income and comprehensive income | $ | 27,684 | $ | 34,681 | $ | 92,051 | $ | 87,255 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.95 | $ | 1.17 | $ | 3.14 | $ | 2.90 | |||||||
Diluted | $ | 0.95 | $ | 1.16 | $ | 3.12 | $ | 2.89 | |||||||
Dividends per share: | $ | 0.18 | $ | 0.15 | $ | 0.63 | $ | 0.60 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 196.2 | 100.0 | % | $ | 181.2 | 100.0 | % | $ | 15.0 | 8.3 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 89.8 | 45.8 | 85.1 | 46.9 | 4.7 | 5.5 | ||||||||||||||
Salaries, wages and employee benefits | 43.2 | 22.0 | 39.0 | 21.5 | 4.2 | 10.8 | ||||||||||||||
Operating leases | 11.0 | 5.6 | 9.1 | 5.0 | 1.9 | 20.9 | ||||||||||||||
Depreciation and amortization | 5.8 | 3.0 | 5.6 | 3.1 | 0.2 | 3.6 | ||||||||||||||
Insurance and claims | 3.6 | 1.8 | 5.1 | 2.8 | (1.5 | ) | (29.4 | ) | ||||||||||||
Fuel expense | 1.8 | 0.9 | 1.0 | 0.6 | 0.8 | 80.0 | ||||||||||||||
Other operating expenses | 15.6 | 8.0 | 13.5 | 7.5 | 2.1 | 15.6 | ||||||||||||||
Total operating expenses | 170.8 | 87.1 | 158.4 | 87.4 | 12.4 | 7.8 | ||||||||||||||
Income from operations | $ | 25.4 | 12.9 | % | $ | 22.8 | 12.6 | % | $ | 2.6 | 11.4 | % |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
December 31, | December 31, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Business days | 64 | 63 | 1.6 | % | ||||||
Tonnage | ||||||||||
Total pounds ¹ | 648,423 | 666,308 | (2.7 | ) | ||||||
Pounds per day ¹ | 10,132 | 10,576 | (4.2 | ) | ||||||
Shipments | ||||||||||
Total shipments ¹ | 1,104 | 1,136 | (2.8 | ) | ||||||
Shipments per day ¹ | 17 | 18 | (3.9 | ) | ||||||
Total shipments with pickup and/or delivery ¹ | 260 | 245 | 6.1 | |||||||
Weight per shipment | 587 | 587 | — | |||||||
Revenue per hundredweight | $ | 26.72 | $ | 24.25 | 10.2 | |||||
Revenue per hundredweight, ex fuel | $ | 22.33 | $ | 21.28 | 4.9 | |||||
Revenue per shipment | $ | 157 | $ | 142 | 10.6 | |||||
Revenue per shipment, ex fuel | $ | 131 | $ | 125 | 4.8 | % | ||||
¹ - In thousands |
Truckload Premium Services Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As adjusted) | ||||||||||||||||||||
Operating revenue | $ | 49.6 | 100.0 | % | $ | 52.8 | 100.0 | % | $ | (3.2 | ) | (6.1 | )% | |||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 37.2 | 75.0 | 41.8 | 79.2 | (4.6 | ) | (11.0 | ) | ||||||||||||
Salaries, wages and employee benefits | 4.7 | 9.5 | 5.2 | 9.8 | (0.5 | ) | (9.6 | ) | ||||||||||||
Operating leases | 0.1 | 0.2 | 0.4 | 0.8 | (0.3 | ) | (75.0 | ) | ||||||||||||
Depreciation and amortization | 1.6 | 3.2 | 1.6 | 3.0 | — | — | ||||||||||||||
Insurance and claims | 1.4 | 2.8 | 1.2 | 2.3 | 0.2 | 16.7 | ||||||||||||||
Fuel expense | 0.7 | 1.4 | 1.0 | 1.9 | (0.3 | ) | (30.0 | ) | ||||||||||||
Other operating expenses | 2.2 | 4.4 | 2.1 | 4.0 | 0.1 | 4.8 | ||||||||||||||
Total operating expenses | 47.9 | 96.6 | 53.3 | 100.9 | (5.4 | ) | (10.1 | ) | ||||||||||||
Results from operations | $ | 1.7 | 3.4 | % | $ | (0.5 | ) | (0.9 | )% | $ | 2.2 | NM |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
December 31, | December 31, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Total Miles ¹ | 19,485 | 24,516 | (20.5 | )% | ||||||
Empty Miles Percentage | 8.3 | % | 8.9 | % | (6.7 | ) | ||||
Tractors (avg) | 315 | 354 | (11.0 | ) | ||||||
Miles per tractor per week 2 | 1,886 | 2,585 | (27.0 | ) | ||||||
Revenue per mile | $ | 2.55 | $ | 2.08 | 22.6 | |||||
Cost per mile | $ | 2.02 | $ | 1.77 | 14.1 | % | ||||
¹ - In thousands | ||||||||||
2 - Calculated using Company driver and owner operator miles |
Intermodal Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 52.7 | 100.0 | % | $ | 44.4 | 100.0 | % | $ | 8.3 | 18.7 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 19.7 | 37.4 | 18.8 | 42.3 | 0.9 | 4.8 | ||||||||||||||
Salaries, wages and employee benefits | 12.2 | 23.1 | 9.7 | 21.8 | 2.5 | 25.8 | ||||||||||||||
Operating leases | 4.0 | 7.6 | 3.5 | 7.9 | 0.5 | 14.3 | ||||||||||||||
Depreciation and amortization | 1.7 | 3.2 | 1.6 | 3.6 | 0.1 | 6.3 | ||||||||||||||
Insurance and claims | 1.5 | 2.8 | 0.9 | 2.0 | 0.6 | 66.7 | ||||||||||||||
Fuel expense | 1.7 | 3.2 | 1.2 | 2.7 | 0.5 | 41.7 | ||||||||||||||
Other operating expenses | 5.0 | 9.5 | 5.3 | 11.9 | (0.3 | ) | (5.7 | ) | ||||||||||||
Total operating expenses | 45.8 | 86.9 | 41.0 | 92.3 | 4.8 | 11.7 | ||||||||||||||
Income from operations | $ | 6.9 | 13.1 | % | $ | 3.4 | 7.7 | % | $ | 3.5 | 102.9 | % |
Intermodal Operating Statistics | ||||||||||
Three months ended | ||||||||||
December 31, | December 31, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Drayage shipments | 81,566 | 76,007 | 7.3 | % | ||||||
Drayage revenue per shipment | $ | 560 | $ | 519 | 7.9 | |||||
Number of locations | 20 | 19 | 5.3 | % |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
December 31, | Percent of | December 31, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 60.9 | 100.0 | % | $ | 51.7 | 100.0 | % | $ | 9.2 | 17.8 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 18.5 | 30.4 | 14.6 | 28.2 | 3.9 | 26.7 | ||||||||||||||
Salaries, wages and employee benefits | 22.2 | 36.5 | 18.9 | 36.6 | 3.3 | 17.5 | ||||||||||||||
Operating leases | 6.0 | 9.9 | 3.8 | 7.4 | 2.2 | 57.9 | ||||||||||||||
Depreciation and amortization | 1.7 | 2.8 | 1.7 | 3.3 | — | — | ||||||||||||||
Insurance and claims | 1.4 | 2.3 | 1.5 | 2.9 | (0.1 | ) | (6.7 | ) | ||||||||||||
Fuel expense | 2.1 | 3.4 | 1.8 | 3.5 | 0.3 | 16.7 | ||||||||||||||
Other operating expenses | 6.8 | 11.2 | 6.7 | 13.0 | 0.1 | 1.5 | ||||||||||||||
Total operating expenses | 58.7 | 96.4 | 49.0 | 94.8 | 9.7 | 19.8 | ||||||||||||||
Income from operations | $ | 2.2 | 3.6 | % | $ | 2.7 | 5.2 | % | $ | (0.5 | ) | (18.5 | )% |
Pool Operating Statistics | ||||||||||
Three months ended | ||||||||||
December 31, | December 31, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Cartons ¹ | 30,435 | 26,172 | 16.3 | % | ||||||
Revenue per carton | $ | 2.00 | $ | 1.98 | 1.0 | |||||
Terminals | 28 | 28 | — | |||||||
¹ In thousands |
Forward Air Corporation | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
December 31, 2018 | December 31, 2017 | ||||||
(As Adjusted) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 25,657 | $ | 3,893 | |||
Accounts receivable, net | 156,359 | 147,948 | |||||
Other current assets | 19,066 | 15,807 | |||||
Total current assets | 201,082 | 167,648 | |||||
Property and equipment | 413,900 | 399,235 | |||||
Less accumulated depreciation and amortization | 204,005 | 193,123 | |||||
Net property and equipment | 209,895 | 206,112 | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 199,092 | 191,671 | |||||
Other acquired intangibles, net of accumulated amortization | 113,661 | 111,247 | |||||
Total goodwill and other acquired intangibles, net | 312,753 | 302,918 | |||||
Other assets | 36,485 | 15,944 | |||||
Total assets | $ | 760,215 | $ | 692,622 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 34,630 | $ | 30,723 | |||
Accrued expenses | 39,784 | 35,069 | |||||
Current portion of debt and capital lease obligations | 309 | 359 | |||||
Total current liabilities | 74,723 | 66,151 | |||||
Debt and capital lease obligations, less current portion | 47,335 | 40,588 | |||||
Other long-term liabilities | 47,739 | 24,104 | |||||
Deferred income taxes | 37,174 | 29,080 | |||||
Shareholders’ equity: | |||||||
Common stock | 285 | 295 | |||||
Additional paid-in capital | 210,296 | 195,346 | |||||
Retained earnings | 342,663 | 337,058 | |||||
Total shareholders’ equity | 553,244 | 532,699 | |||||
Total liabilities and shareholders’ equity | $ | 760,215 | $ | 692,622 |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
December 31, 2018 | December 31, 2017 | ||||||
(As Adjusted) | |||||||
Operating activities: | |||||||
Net income | $ | 27,684 | $ | 34,681 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 10,837 | 10,477 | |||||
Share-based compensation | 3,024 | 2,138 | |||||
(Gain) loss on disposal of property and equipment | (157 | ) | 580 | ||||
Provision for loss on receivables | 191 | 26 | |||||
Provision for revenue adjustments | 707 | 924 | |||||
Deferred income tax | 1,418 | (12,592 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (8,792 | ) | (10,563 | ) | |||
Prepaid expenses and other assets | 2,315 | 207 | |||||
Income taxes | 1,937 | (3,056 | ) | ||||
Accounts payable and accrued expenses | (456 | ) | 2,831 | ||||
Net cash provided by operating activities | 38,708 | 25,653 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 1,070 | 943 | |||||
Purchases of property and equipment | (7,949 | ) | (24,655 | ) | |||
Acquisition of business | (16,250 | ) | (640 | ) | |||
Other | 115 | (150 | ) | ||||
Net cash used in investing activities | (23,014 | ) | (24,502 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (74 | ) | (75 | ) | |||
Borrowings on line of credit | 7,000 | — | |||||
Proceeds from exercise of stock options | 239 | 1,630 | |||||
Payments of cash dividends | (5,214 | ) | (4,468 | ) | |||
Repurchase of common stock (repurchase program) | (21,141 | ) | (7,000 | ) | |||
Common stock issued under employee stock purchase plan | 242 | 232 | |||||
Net cash used in by financing activities | (18,948 | ) | (9,681 | ) | |||
Net decrease in cash | (3,254 | ) | (8,530 | ) | |||
Cash at beginning of period | 28,911 | 12,423 | |||||
Cash at end of period | $ | 25,657 | $ | 3,893 |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Year ended | |||||||
December 31, 2018 | December 31, 2017 | ||||||
(As Adjusted) | |||||||
Operating activities: | |||||||
Net income | $ | 92,051 | $ | 87,255 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 42,183 | 41,055 | |||||
Change in fair value of earn-out liability | (455 | ) | — | ||||
Share-based compensation | 10,549 | 8,103 | |||||
(Gain) loss on disposal of property and equipment | (171 | ) | 1,281 | ||||
Provision for loss on receivables | 139 | 1,814 | |||||
Provision for revenue adjustments | 3,628 | 3,055 | |||||
Deferred income taxes | 8,094 | (12,068 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (12,178 | ) | (33,457 | ) | |||
Prepaid expenses and other assets | (2,565 | ) | (1,204 | ) | |||
Income taxes | (1,256 | ) | (3,480 | ) | |||
Accounts payable and accrued expenses | 12,535 | 11,010 | |||||
Net cash provided by operating activities | 152,554 | 103,364 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 7,059 | 2,440 | |||||
Purchases of property and equipment | (42,293 | ) | (38,265 | ) | |||
Acquisition of business, net of cash acquired | (19,987 | ) | (23,140 | ) | |||
Other | (242 | ) | (222 | ) | |||
Net cash used in investing activities | (55,463 | ) | (59,187 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (302 | ) | (42,790 | ) | |||
Proceeds from senior credit facility | 7,000 | 55,000 | |||||
Proceeds from exercise of stock options | 3,921 | 7,272 | |||||
Payments of cash dividends | (18,427 | ) | (18,052 | ) | |||
Repurchase of common stock (repurchase program) | (66,126 | ) | (48,983 | ) | |||
Common stock issued under employee stock purchase plan | 479 | 458 | |||||
Cash settlement of share-based awards for tax withholdings | (1,872 | ) | (1,700 | ) | |||
Net cash used in financing activities | (75,327 | ) | (48,795 | ) | |||
Net increase (decrease) in cash | 21,764 | (4,618 | ) | ||||
Cash at beginning of year | 3,893 | 8,511 | |||||
Cash at end of year | $ | 25,657 | $ | 3,893 |
Forward Air Corporation | |||||||||||||||
Reconciliation to U.S. GAAP | |||||||||||||||
(In thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Year ended | ||||||||||||||
December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||||||||
(As Adjusted) | (As Adjusted) | ||||||||||||||
Net income | $ | 27,684 | $ | 34,681 | $ | 92,051 | $ | 87,255 | |||||||
Interest expense | 457 | 403 | 1,783 | 1,209 | |||||||||||
Income tax expense (benefit) | 6,906 | (7,241 | ) | 28,195 | 20,282 | ||||||||||
Depreciation and amortization | 10,837 | 10,477 | 42,183 | 41,055 | |||||||||||
EBITDA | $ | 45,884 | $ | 38,320 | $ | 164,212 | $ | 149,801 | |||||||
Three months ended | Year ended | ||||||||||||||
December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||||||||
(As Adjusted) | (As Adjusted) | ||||||||||||||
Net cash provided by operating activities | $ | 38,708 | $ | 25,653 | $ | 152,553 | $ | 103,364 | |||||||
Proceeds from disposal of property and equipment | 1,070 | 943 | 7,059 | 2,440 | |||||||||||
Purchases of property and equipment | (7,949 | ) | (24,655 | ) | (42,293 | ) | (38,265 | ) | |||||||
Free cash flow | $ | 31,829 | $ | 1,941 | $ | 117,319 | $ | 67,539 |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
Three months ended | |||
Actual | December 31, 2018 | ||
Net income | $ | 27,684 | |
Income allocated to participating securities | (315 | ) | |
Numerator for diluted income per share - net income | $ | 27,369 | |
Fully diluted share count | 28,829 | ||
Diluted earnings per share | $ | 0.95 | |
Projected | Full year 2019 | ||
Projected tax rate | 25.5 | % | |
Projected capital expenditures, net | $ | 38,000 | |
Three months ended | |||
Projected | December 31, 2019 | ||
Projected year end fully diluted share count | 28,100 |