Forward Air Corporation | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 205,722 | $ | 192,891 | $ | 384,275 | $ | 362,835 | |||||||
Intermodal | 50,539 | 49,162 | 104,654 | 97,731 | |||||||||||
Truckload Premium Services | 46,113 | 48,947 | 91,780 | 95,040 | |||||||||||
Pool Distribution | 45,805 | 43,305 | 90,990 | 85,976 | |||||||||||
Eliminations and other operations | (2,423 | ) | (3,962 | ) | (4,472 | ) | (8,631 | ) | |||||||
Operating revenue | 345,756 | 330,343 | 667,227 | 632,951 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 155,124 | 155,716 | 299,138 | 295,382 | |||||||||||
Salaries, wages and employee benefits | 80,278 | 72,073 | 156,640 | 141,655 | |||||||||||
Operating leases | 20,326 | 18,006 | 39,499 | 35,970 | |||||||||||
Depreciation and amortization | 10,681 | 10,362 | 21,508 | 21,052 | |||||||||||
Insurance and claims | 13,229 | 10,086 | 22,601 | 17,238 | |||||||||||
Fuel expense | 5,929 | 5,598 | 11,537 | 11,152 | |||||||||||
Other operating expenses | 29,639 | 25,632 | 61,020 | 53,397 | |||||||||||
Total operating expenses | 315,206 | 297,473 | 611,943 | 575,846 | |||||||||||
Income (loss) from operations: | |||||||||||||||
Expedited LTL | 26,889 | 26,526 | 46,436 | 47,298 | |||||||||||
Intermodal | 5,245 | 5,543 | 11,426 | 9,012 | |||||||||||
Truckload Premium Services | 689 | 1,717 | 1,530 | 1,674 | |||||||||||
Pool Distribution | 1,567 | 1,589 | 2,818 | 2,960 | |||||||||||
Other operations | (3,840 | ) | (2,505 | ) | (6,926 | ) | (3,839 | ) | |||||||
Income from operations | 30,550 | 32,870 | 55,284 | 57,105 | |||||||||||
Other expense: | |||||||||||||||
Interest expense | (581 | ) | (483 | ) | (1,156 | ) | (854 | ) | |||||||
Other, net | (1 | ) | (1 | ) | (2 | ) | (1 | ) | |||||||
Total other expense | (582 | ) | (484 | ) | (1,158 | ) | (855 | ) | |||||||
Income before income taxes | 29,968 | 32,386 | 54,126 | 56,250 | |||||||||||
Income tax expense | 7,638 | 8,088 | 13,389 | 14,212 | |||||||||||
Net income and comprehensive income | $ | 22,330 | $ | 24,298 | $ | 40,737 | $ | 42,038 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.78 | $ | 0.83 | $ | 1.42 | $ | 1.42 | |||||||
Diluted | $ | 0.78 | $ | 0.82 | $ | 1.41 | $ | 1.42 | |||||||
Dividends per share: | $ | 0.18 | $ | 0.15 | $ | 0.36 | $ | 0.30 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 205.7 | 100.0 | % | $ | 192.9 | 100.0 | % | $ | 12.8 | 6.6 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 90.6 | 44.0 | 90.5 | 46.9 | 0.1 | 0.1 | ||||||||||||||
Salaries, wages and employee benefits | 46.2 | 22.5 | 41.2 | 21.4 | 5.0 | 12.1 | ||||||||||||||
Operating leases | 11.8 | 5.7 | 10.2 | 5.3 | 1.6 | 15.7 | ||||||||||||||
Depreciation and amortization | 5.9 | 2.9 | 5.6 | 2.9 | 0.3 | 5.4 | ||||||||||||||
Insurance and claims | 5.3 | 2.6 | 3.6 | 1.9 | 1.7 | 47.2 | ||||||||||||||
Fuel expense | 2.0 | 1.0 | 1.6 | 0.8 | 0.4 | 25.0 | ||||||||||||||
Other operating expenses | 17.0 | 8.3 | 13.7 | 7.1 | 3.3 | 24.1 | ||||||||||||||
Total operating expenses | 178.8 | 86.9 | 166.4 | 86.3 | 12.4 | 7.5 | ||||||||||||||
Income from operations | $ | 26.9 | 13.1 | % | $ | 26.5 | 13.7 | % | $ | 0.4 | 1.5 | % |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Business days | 64 | 64 | — | % | ||||||
Tonnage | ||||||||||
Total pounds ¹ | 626,748 | 668,129 | (6.2 | ) | ||||||
Pounds per day ¹ | 9,793 | 10,440 | (6.2 | ) | ||||||
Shipments | ||||||||||
Total shipments ¹ | 1,014.3 | 1,094.9 | (7.4 | ) | ||||||
Shipments per day ¹ | 15.8 | 17.1 | (7.4 | ) | ||||||
Weight per shipment | 618 | 610 | 1.3 | |||||||
Revenue per hundredweight | $ | 27.39 | $ | 25.91 | 5.7 | |||||
Revenue per hundredweight, ex fuel | 22.91 | 21.89 | 4.7 | |||||||
Revenue per shipment | $ | 171 | $ | 160 | 6.9 | |||||
Revenue per shipment, ex fuel | 144 | 136 | 5.9 | |||||||
Network revenue from door-to-door shipments as a percentage of network revenue 2,3 | 39.9 | % | 36.0 | % | 10.8 | % | ||||
¹ In thousands | ||||||||||
2 Door-to-door shipments include all shipments with a pickup and/or delivery | ||||||||||
3 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and final mile revenue |
Intermodal Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 50.5 | 100.0 | % | $ | 49.2 | 100.0 | % | $ | 1.3 | 2.6 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 18.2 | 36.0 | 19.4 | 39.4 | (1.2 | ) | (6.2 | ) | ||||||||||||
Salaries, wages and employee benefits | 12.4 | 24.6 | 10.5 | 21.3 | 1.9 | 18.1 | ||||||||||||||
Operating leases | 4.0 | 7.9 | 3.9 | 7.9 | 0.1 | 2.6 | ||||||||||||||
Depreciation and amortization | 1.8 | 3.6 | 1.5 | 3.1 | 0.3 | 20.0 | ||||||||||||||
Insurance and claims | 1.7 | 3.4 | 1.4 | 2.8 | 0.3 | 21.4 | ||||||||||||||
Fuel expense | 1.7 | 3.4 | 1.7 | 3.5 | — | — | ||||||||||||||
Other operating expenses | 5.5 | 10.9 | 5.2 | 10.6 | 0.3 | 5.8 | ||||||||||||||
Total operating expenses | 45.3 | 89.7 | 43.6 | 88.6 | 1.7 | 3.9 | ||||||||||||||
Income from operations | $ | 5.2 | 10.3 | % | $ | 5.6 | 11.4 | % | $ | (0.4 | ) | (7.1 | )% |
Intermodal Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Drayage shipments | 76,074 | 74,021 | 2.8 | % | ||||||
Drayage revenue per shipment | $ | 571 | $ | 565 | 1.1 | |||||
Number of locations | 21 | 19 | 10.5 | % |
Truckload Premium Services Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 46.1 | 100.0 | % | $ | 48.9 | 100.0 | % | $ | (2.8 | ) | (5.7 | )% | |||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 34.5 | 74.8 | 37.0 | 75.7 | (2.5 | ) | (6.8 | ) | ||||||||||||
Salaries, wages and employee benefits | 4.6 | 10.0 | 4.6 | 9.4 | — | — | ||||||||||||||
Operating leases | 0.4 | 0.9 | 0.1 | 0.2 | 0.3 | 300.0 | ||||||||||||||
Depreciation and amortization | 1.5 | 3.3 | 1.6 | 3.3 | (0.1 | ) | (6.3 | ) | ||||||||||||
Insurance and claims | 1.3 | 2.8 | 0.9 | 1.8 | 0.4 | 44.4 | ||||||||||||||
Fuel expense | 0.8 | 1.7 | 0.8 | 1.6 | — | — | ||||||||||||||
Other operating expenses | 2.3 | 5.0 | 2.2 | 4.5 | 0.1 | 4.5 | ||||||||||||||
Total operating expenses | 45.4 | 98.5 | 47.2 | 96.5 | (1.8 | ) | (3.8 | ) | ||||||||||||
Income from operations | $ | 0.7 | 1.5 | % | $ | 1.7 | 3.5 | % | $ | (1.0 | ) | (58.8 | )% |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Total Miles ¹ | 19,259 | 20,136 | (4.4 | )% | ||||||
Empty Miles Percentage | 6.6 | % | 9.3 | % | (29.0 | ) | ||||
Tractors (avg) | 337 | 321 | 5.0 | |||||||
Miles per tractor per week 2 | 1,912 | 2,284 | (16.3 | ) | ||||||
Revenue per mile | $ | 2.29 | $ | 2.32 | (1.3 | ) | ||||
Cost per mile | $ | 1.83 | $ | 1.86 | (1.6 | )% | ||||
¹ In thousands | ||||||||||
2 Calculated using Company-employed driver and owner-operator miles |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
June 30, | Percent of | June 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 45.8 | 100.0 | % | $ | 43.3 | 100.0 | % | $ | 2.5 | 5.8 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 13.8 | 30.1 | 12.4 | 28.6 | 1.4 | 11.3 | ||||||||||||||
Salaries, wages and employee benefits | 16.8 | 36.7 | 15.9 | 36.7 | 0.9 | 5.7 | ||||||||||||||
Operating leases | 4.2 | 9.2 | 3.8 | 8.8 | 0.4 | 10.5 | ||||||||||||||
Depreciation and amortization | 1.5 | 3.3 | 1.7 | 3.9 | (0.2 | ) | (11.8 | ) | ||||||||||||
Insurance and claims | 1.5 | 3.3 | 1.0 | 2.3 | 0.5 | 50.0 | ||||||||||||||
Fuel expense | 1.5 | 3.3 | 1.6 | 3.7 | (0.1 | ) | (6.3 | ) | ||||||||||||
Other operating expenses | 4.9 | 10.7 | 5.3 | 12.3 | (0.4 | ) | (7.5 | ) | ||||||||||||
Total operating expenses | 44.2 | 96.5 | 41.7 | 96.3 | 2.5 | 6.0 | ||||||||||||||
Income from operations | $ | 1.6 | 3.5 | % | $ | 1.6 | 3.7 | % | $ | — | — | % |
Pool Operating Statistics | ||||||||||
Three months ended | ||||||||||
June 30, | June 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Cartons ¹ | 23,031 | 20,101 | 14.6 | % | ||||||
Revenue per carton | $ | 1.99 | $ | 2.15 | (7.4 | ) | ||||
Terminals | 28 | 28 | — | % | ||||||
¹ In thousands |
Forward Air Corporation | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
June 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 14,777 | $ | 25,657 | |||
Accounts receivable, net | 154,715 | 156,359 | |||||
Other current assets | 23,580 | 19,066 | |||||
Total current assets | 193,072 | 201,082 | |||||
Property and equipment | 422,968 | 413,900 | |||||
Less accumulated depreciation and amortization | 214,126 | 204,005 | |||||
Total property and equipment, net | 208,842 | 209,895 | |||||
Operating lease right-of-use assets | 149,544 | — | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 218,373 | 199,092 | |||||
Other acquired intangibles, net of accumulated amortization | 126,482 | 113,661 | |||||
Total goodwill and other acquired intangibles, net | 344,855 | 312,753 | |||||
Other assets | 40,244 | 36,485 | |||||
Total assets | $ | 936,557 | $ | 760,215 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 30,585 | $ | 34,630 | |||
Accrued expenses | 50,414 | 39,784 | |||||
Other current liabilities | 6,069 | — | |||||
Current portion of debt and finance lease obligations | 197 | 309 | |||||
Current portion of operating lease obligations | 49,370 | — | |||||
Total current liabilities | 136,635 | 74,723 | |||||
Debt and finance lease obligations, less current portion | 57,311 | 47,335 | |||||
Operating lease obligations, less current portion | 100,752 | — | |||||
Other long-term liabilities | 51,365 | 47,739 | |||||
Deferred income taxes | 40,452 | 37,174 | |||||
Shareholders’ equity: | |||||||
Common stock | 280 | 285 | |||||
Additional paid-in capital | 218,080 | 210,296 | |||||
Retained earnings | 331,682 | 342,663 | |||||
Total shareholders’ equity | 550,042 | 553,244 | |||||
Total liabilities and shareholders’ equity | $ | 936,557 | $ | 760,215 |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
June 30, 2019 | June 30, 2018 | ||||||
Operating activities: | |||||||
Net income | $ | 22,330 | $ | 24,298 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 10,681 | 10,362 | |||||
Share-based compensation | 3,197 | 2,417 | |||||
Gain on disposal of property and equipment | (27 | ) | (216 | ) | |||
Provision for loss on receivables | 2 | 323 | |||||
Provision for revenue adjustments | 740 | 1,012 | |||||
Deferred income tax expense | 2,442 | 781 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (4,834 | ) | (7,537 | ) | |||
Prepaid expenses and other current assets | (7,683 | ) | (6,354 | ) | |||
Income taxes | (6,813 | ) | (3,196 | ) | |||
Accounts payable and accrued expenses | 10,203 | 4,288 | |||||
Net cash provided by operating activities | 30,238 | 26,178 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 865 | 4,195 | |||||
Purchases of property and equipment | (12,508 | ) | (11,385 | ) | |||
Acquisition of business, net of cash acquired | (27,000 | ) | — | ||||
Other | 6 | (257 | ) | ||||
Net cash used in investing activities | (38,637 | ) | (7,447 | ) | |||
Financing activities: | |||||||
Payments of finance lease obligations | (69 | ) | (77 | ) | |||
Proceeds from senior credit facility | 10,000 | — | |||||
Proceeds from exercise of stock options | 448 | 1,112 | |||||
Payments of cash dividends | (5,144 | ) | (4,415 | ) | |||
Repurchase of common stock (repurchase program) | (24,436 | ) | (8,172 | ) | |||
Proceeds from common stock issued under employee stock purchase plan | 261 | 237 | |||||
Cash settlement of share-based awards for tax withholdings | (49 | ) | (49 | ) | |||
Net cash used in financing activities | (18,989 | ) | (11,364 | ) | |||
Net (decrease) increase in cash | (27,388 | ) | 7,367 | ||||
Cash at beginning of period | 42,165 | 12,735 | |||||
Cash at end of period | $ | 14,777 | $ | 20,102 |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Six months ended | |||||||
June 30, 2019 | June 30, 2018 | ||||||
Operating activities: | |||||||
Net income | $ | 40,737 | $ | 42,038 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 21,508 | 21,052 | |||||
Share-based compensation | 6,244 | 4,678 | |||||
Gain on disposal of property and equipment | (88 | ) | (134 | ) | |||
Provision for loss on receivables | 631 | 457 | |||||
Provision for revenue adjustments | 1,280 | 1,829 | |||||
Deferred income tax expense | 3,278 | 4,494 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (267 | ) | (6,732 | ) | |||
Prepaid expenses and other current assets | (4,984 | ) | (3,639 | ) | |||
Income taxes | (2,182 | ) | (1,428 | ) | |||
Accounts payable and accrued expenses | 5,607 | 4,375 | |||||
Net cash provided by operating activities | 71,764 | 66,990 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 1,272 | 4,839 | |||||
Purchases of property and equipment | (16,598 | ) | (17,606 | ) | |||
Acquisition of business, net of cash acquired | (27,000 | ) | — | ||||
Other | — | (347 | ) | ||||
Net cash used in investing activities | (42,326 | ) | (13,114 | ) | |||
Financing activities: | |||||||
Payments of finance lease obligations | (137 | ) | (151 | ) | |||
Proceeds from senior credit facility | 10,000 | — | |||||
Proceeds from exercise of stock options | 1,278 | 1,112 | |||||
Payments of cash dividends | (10,333 | ) | (8,828 | ) | |||
Repurchase of common stock (repurchase program) | (38,617 | ) | (28,165 | ) | |||
Proceeds from common stock issued under employee stock purchase plan | 261 | 237 | |||||
Cash settlement of share-based awards for tax withholdings | (2,770 | ) | (1,872 | ) | |||
Net cash used in financing activities | (40,318 | ) | (37,667 | ) | |||
Net (decrease) increase in cash | (10,880 | ) | 16,209 | ||||
Cash at beginning of period | 25,657 | 3,893 | |||||
Cash at end of period | $ | 14,777 | $ | 20,102 |
Forward Air Corporation | |||||||||||||||
Reconciliation to U.S. GAAP | |||||||||||||||
(In thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Net income | $ | 22,330 | $ | 24,298 | $ | 40,737 | $ | 42,038 | |||||||
Interest expense and other, net | 582 | 484 | 1,158 | 855 | |||||||||||
Income tax expense | 7,638 | 8,088 | 13,389 | 14,212 | |||||||||||
Depreciation and amortization | 10,681 | 10,362 | 21,508 | 21,052 | |||||||||||
EBITDA | $ | 41,231 | $ | 43,232 | $ | 76,792 | $ | 78,157 | |||||||
Three months ended | Six months ended | ||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Net cash provided by operating activities | $ | 30,238 | $ | 26,178 | $ | 71,764 | $ | 66,990 | |||||||
Proceeds from disposal of property and equipment | 865 | 4,195 | 1,272 | 4,839 | |||||||||||
Purchases of property and equipment | (12,508 | ) | (11,385 | ) | (16,598 | ) | (17,606 | ) | |||||||
Free cash flow | $ | 18,595 | $ | 18,988 | $ | 56,438 | $ | 54,223 |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
Three months ended | |||
Actual | June 30, 2019 | ||
Net income | $ | 22,330 | |
Income allocated to participating securities | (251 | ) | |
Numerator for diluted income per share - net income | $ | 22,079 | |
Fully diluted share count | 28,373 | ||
Diluted earnings per share | $ | 0.78 | |
Projected | Full year 2019 | ||
Projected tax rate | 25.5 | % | |
Projected capital expenditures, net | $ | 30,500 | |
Projected | December 31, 2019 | ||
Projected year end fully diluted share count | 28,100 | ||