Forward Air Corporation | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 210,060 | $ | 188,507 | $ | 594,336 | $ | 551,342 | |||||||
Intermodal | 58,347 | 50,545 | 163,000 | 148,275 | |||||||||||
Truckload Premium Services | 45,458 | 47,942 | 137,239 | 142,982 | |||||||||||
Pool Distribution | 50,962 | 47,280 | 141,952 | 133,256 | |||||||||||
Eliminations and other operations | (3,164 | ) | (2,899 | ) | (7,636 | ) | (11,530 | ) | |||||||
Operating revenue | 361,663 | 331,375 | 1,028,891 | 964,325 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 163,606 | 155,451 | 462,744 | 450,833 | |||||||||||
Salaries, wages and employee benefits | 87,259 | 76,028 | 243,899 | 217,682 | |||||||||||
Operating leases | 20,521 | 18,671 | 60,021 | 54,640 | |||||||||||
Depreciation and amortization | 10,528 | 10,295 | 32,036 | 31,346 | |||||||||||
Insurance and claims | 10,930 | 9,203 | 33,531 | 26,442 | |||||||||||
Fuel expense | 6,105 | 5,634 | 17,642 | 16,786 | |||||||||||
Other operating expenses | 32,025 | 26,214 | 93,045 | 79,612 | |||||||||||
Total operating expenses | 330,974 | 301,496 | 942,918 | 877,341 | |||||||||||
Income (loss) from operations: | |||||||||||||||
Expedited LTL | 25,896 | 23,724 | 72,332 | 71,023 | |||||||||||
Intermodal | 6,900 | 7,321 | 18,326 | 16,333 | |||||||||||
Truckload Premium Services | 606 | 1,673 | 2,137 | 3,348 | |||||||||||
Pool Distribution | 1,867 | 735 | 4,685 | 3,695 | |||||||||||
Other operations | (4,580 | ) | (3,574 | ) | (11,507 | ) | (7,415 | ) | |||||||
Income from operations | 30,689 | 29,879 | 85,973 | 86,984 | |||||||||||
Other expense: | |||||||||||||||
Interest expense | (761 | ) | (472 | ) | (1,916 | ) | (1,327 | ) | |||||||
Other, net | 1 | (1 | ) | (1 | ) | (2 | ) | ||||||||
Total other expense | (760 | ) | (473 | ) | (1,917 | ) | (1,329 | ) | |||||||
Income before income taxes | 29,929 | 29,406 | 84,056 | 85,655 | |||||||||||
Income tax expense | 7,734 | 7,077 | 21,124 | 21,289 | |||||||||||
Net income and comprehensive income | $ | 22,195 | $ | 22,329 | $ | 62,932 | $ | 64,366 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.78 | $ | 0.76 | $ | 2.20 | $ | 2.18 | |||||||
Diluted | $ | 0.78 | $ | 0.76 | $ | 2.19 | $ | 2.18 | |||||||
Dividends per share: | $ | 0.18 | $ | 0.15 | $ | 0.54 | $ | 0.45 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 210.1 | 100.0 | % | $ | 188.5 | 100.0 | % | $ | 21.6 | 11.5 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 95.5 | 45.5 | 88.6 | 47.0 | 6.9 | 7.8 | ||||||||||||||
Salaries, wages and employee benefits | 47.9 | 22.8 | 41.6 | 22.1 | 6.3 | 15.1 | ||||||||||||||
Operating leases | 11.1 | 5.3 | 10.3 | 5.5 | 0.8 | 7.8 | ||||||||||||||
Depreciation and amortization | 5.2 | 2.5 | 5.6 | 3.0 | (0.4 | ) | (7.1 | ) | ||||||||||||
Insurance and claims | 4.0 | 1.9 | 3.9 | 2.1 | 0.1 | 2.6 | ||||||||||||||
Fuel expense | 1.8 | 0.9 | 1.6 | 0.8 | 0.2 | 12.5 | ||||||||||||||
Other operating expenses | 18.7 | 8.9 | 13.2 | 7.0 | 5.5 | 41.7 | ||||||||||||||
Total operating expenses | 184.2 | 87.7 | 164.8 | 87.4 | 19.4 | 11.8 | ||||||||||||||
Income from operations | $ | 25.9 | 12.3 | % | $ | 23.7 | 12.6 | % | $ | 2.2 | 9.3 | % |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Business days | 64 | 63 | 1.6 | % | ||||||
Tonnage | ||||||||||
Total pounds ¹ | 613,812 | 636,831 | (3.6 | ) | ||||||
Pounds per day ¹ | 9,591 | 10,108 | (5.1 | ) | ||||||
Shipments | ||||||||||
Total shipments ¹ | 977 | 1,003 | (2.6 | ) | ||||||
Shipments per day ¹ | 15.3 | 15.9 | (4.1 | ) | ||||||
Weight per shipment | 628 | 635 | (1.1 | ) | ||||||
Revenue per hundredweight | $ | 27.65 | $ | 26.56 | 4.1 | |||||
Revenue per hundredweight, ex fuel | 23.23 | 22.31 | 4.1 | |||||||
Revenue per shipment | $ | 176 | $ | 171 | 2.9 | |||||
Revenue per shipment, ex fuel | 148 | 144 | 2.8 | |||||||
Network revenue from door-to-door shipments as a percentage of network revenue 2,3 | 40.7 | % | 35.3 | % | 15.3 | % | ||||
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 | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 58.3 | 100.0 | % | $ | 50.5 | 100.0 | % | $ | 7.8 | 15.4 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 21.0 | 36.0 | 19.3 | 38.2 | 1.7 | 8.8 | ||||||||||||||
Salaries, wages and employee benefits | 14.2 | 24.4 | 10.9 | 21.6 | 3.3 | 30.3 | ||||||||||||||
Operating leases | 4.3 | 7.4 | 4.0 | 7.9 | 0.3 | 7.5 | ||||||||||||||
Depreciation and amortization | 2.6 | 4.5 | 1.5 | 3.0 | 1.1 | 73.3 | ||||||||||||||
Insurance and claims | 1.8 | 3.1 | 1.4 | 2.8 | 0.4 | 28.6 | ||||||||||||||
Fuel expense | 2.2 | 3.8 | 1.6 | 3.2 | 0.6 | 37.5 | ||||||||||||||
Other operating expenses | 5.3 | 9.1 | 4.5 | 8.9 | 0.8 | 17.8 | ||||||||||||||
Total operating expenses | 51.4 | 88.2 | 43.2 | 85.5 | 8.2 | 19.0 | ||||||||||||||
Income from operations | $ | 6.9 | 11.8 | % | $ | 7.3 | 14.5 | % | $ | (0.4 | ) | (5.5 | )% |
Intermodal Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Drayage shipments | 84,230 | 75,981 | 10.9 | % | ||||||
Drayage revenue per shipment | $ | 597 | $ | 574 | 4.0 | |||||
Number of locations | 21 | 19 | 10.5 | % |
Truckload Premium Services Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 45.5 | 100.0 | % | $ | 47.9 | 100.0 | % | $ | (2.4 | ) | (5.0 | )% | |||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 34.5 | 75.8 | 35.8 | 74.7 | (1.3 | ) | (3.6 | ) | ||||||||||||
Salaries, wages and employee benefits | 4.3 | 9.5 | 4.7 | 9.8 | (0.4 | ) | (8.5 | ) | ||||||||||||
Operating leases | 0.4 | 0.9 | 0.1 | 0.2 | 0.3 | 300.0 | ||||||||||||||
Depreciation and amortization | 1.2 | 2.6 | 1.5 | 3.1 | (0.3 | ) | (20.0 | ) | ||||||||||||
Insurance and claims | 1.3 | 2.9 | 1.2 | 2.5 | 0.1 | 8.3 | ||||||||||||||
Fuel expense | 0.7 | 1.5 | 0.7 | 1.5 | — | — | ||||||||||||||
Other operating expenses | 2.5 | 5.5 | 2.2 | 4.6 | 0.3 | 13.6 | ||||||||||||||
Total operating expenses | 44.9 | 98.7 | 46.2 | 96.5 | (1.3 | ) | (2.8 | ) | ||||||||||||
Income from operations | $ | 0.6 | 1.3 | % | $ | 1.7 | 3.5 | % | $ | (1.1 | ) | (64.7 | )% |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Total Miles ¹ | 19,813 | 19,197 | 3.2 | % | ||||||
Empty Miles Percentage | 7.7 | % | 8.5 | % | (9.4 | ) | ||||
Tractors (avg) | 391 | 291 | 34.4 | |||||||
Miles per tractor per week 2 | 2,006 | 2,317 | (13.4 | ) | ||||||
Revenue per mile | $ | 2.21 | $ | 2.37 | (6.8 | ) | ||||
Cost per mile | $ | 1.79 | $ | 1.88 | (4.8 | )% | ||||
¹ In thousands | ||||||||||
2 Calculated using Company-employed driver and owner-operator miles |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2019 | Revenue | 2018 | Revenue | Change | Change | |||||||||||||||
Operating revenue | $ | 51.0 | 100.0 | % | $ | 47.3 | 100.0 | % | $ | 3.7 | 7.8 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 15.5 | 30.4 | 14.3 | 30.2 | 1.2 | 8.4 | ||||||||||||||
Salaries, wages and employee benefits | 19.0 | 37.3 | 17.5 | 37.0 | 1.5 | 8.6 | ||||||||||||||
Operating leases | 4.7 | 9.2 | 4.2 | 8.9 | 0.5 | 11.9 | ||||||||||||||
Depreciation and amortization | 1.5 | 2.9 | 1.7 | 3.6 | (0.2 | ) | (11.8 | ) | ||||||||||||
Insurance and claims | 1.3 | 2.5 | 1.3 | 2.7 | — | — | ||||||||||||||
Fuel expense | 1.5 | 2.9 | 1.6 | 3.4 | (0.1 | ) | (6.3 | ) | ||||||||||||
Other operating expenses | 5.6 | 11.0 | 6.0 | 12.7 | (0.4 | ) | (6.7 | ) | ||||||||||||
Total operating expenses | 49.1 | 96.3 | 46.6 | 98.5 | 2.5 | 5.4 | ||||||||||||||
Income from operations | $ | 1.9 | 3.7 | % | $ | 0.7 | 1.5 | % | $ | 1.2 | 171.4 | % |
Pool Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2019 | 2018 | Change | ||||||||
Cartons ¹ | 25,692 | 22,218 | 15.6 | % | ||||||
Revenue per carton | $ | 1.98 | $ | 2.13 | (7.0 | ) | ||||
Terminals | 30 | 28 | 7.1 | % | ||||||
¹ In thousands |
Forward Air Corporation | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
September 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 34,824 | $ | 25,657 | |||
Accounts receivable, net | 157,494 | 156,359 | |||||
Other current assets | 23,393 | 19,066 | |||||
Total current assets | 215,711 | 201,082 | |||||
Property and equipment | 438,656 | 413,900 | |||||
Less accumulated depreciation and amortization | 217,813 | 204,005 | |||||
Total property and equipment, net | 220,843 | 209,895 | |||||
Operating lease right-of-use assets | 158,977 | — | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 220,423 | 199,092 | |||||
Other acquired intangibles, net of accumulated amortization | 130,038 | 113,661 | |||||
Total goodwill and other acquired intangibles, net | 350,461 | 312,753 | |||||
Other assets | 34,641 | 36,485 | |||||
Total assets | $ | 980,633 | $ | 760,215 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 32,599 | $ | 34,630 | |||
Accrued expenses | 51,412 | 39,784 | |||||
Other current liabilities | 7,049 | — | |||||
Current portion of debt and finance lease obligations | 1,578 | 309 | |||||
Current portion of operating lease obligations | 47,137 | — | |||||
Total current liabilities | 139,775 | 74,723 | |||||
Debt and finance lease obligations, less current portion | 72,738 | 47,335 | |||||
Operating lease obligations, less current portion | 112,553 | — | |||||
Other long-term liabilities | 51,316 | 47,739 | |||||
Deferred income taxes | 43,106 | 37,174 | |||||
Shareholders’ equity: | |||||||
Common stock | 279 | 285 | |||||
Additional paid-in capital | 221,629 | 210,296 | |||||
Retained earnings | 339,237 | 342,663 | |||||
Total shareholders’ equity | 561,145 | 553,244 | |||||
Total liabilities and shareholders’ equity | $ | 980,633 | $ | 760,215 |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
September 30, 2019 | September 30, 2018 | ||||||
Operating activities: | |||||||
Net income | $ | 22,195 | $ | 22,329 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 10,528 | 10,295 | |||||
Change in fair value of earn-out liability | 890 | (455 | ) | ||||
Share-based compensation | 2,762 | 2,847 | |||||
Loss on disposal of property and equipment, net | 1,098 | 120 | |||||
Provision for loss (recovery) on receivables | 197 | (509 | ) | ||||
Provision for revenue adjustments | 963 | 1,092 | |||||
Deferred income tax expense | 2,653 | 2,182 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (3,939 | ) | 3,345 | ||||
Prepaid expenses and other current assets | 511 | (1,241 | ) | ||||
Income taxes | (374 | ) | (1,765 | ) | |||
Accounts payable and accrued expenses | 8,483 | 8,615 | |||||
Net cash provided by operating activities | 45,967 | 46,855 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 829 | 1,150 | |||||
Purchases of property and equipment | (10,504 | ) | (16,738 | ) | |||
Acquisition of business, net of cash acquired | (12,000 | ) | (3,737 | ) | |||
Other | — | (9 | ) | ||||
Net cash used in investing activities | (21,675 | ) | (19,334 | ) | |||
Financing activities: | |||||||
Payments of finance lease obligations | (391 | ) | (77 | ) | |||
Proceeds from senior credit facility | 10,000 | — | |||||
Proceeds from exercise of stock options | 785 | 2,570 | |||||
Payments of cash dividends | (5,088 | ) | (4,385 | ) | |||
Repurchase of common stock (repurchase program) | (9,289 | ) | (16,820 | ) | |||
Cash settlement of share-based awards for tax withholdings | (262 | ) | — | ||||
Net cash used in financing activities | (4,245 | ) | (18,712 | ) | |||
Net increase in cash | 20,047 | 8,809 | |||||
Cash at beginning of period | 14,777 | 20,102 | |||||
Cash at end of period | $ | 34,824 | $ | 28,911 |
Forward Air Corporation | |||||||
Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Nine months ended | |||||||
September 30, 2019 | September 30, 2018 | ||||||
Operating activities: | |||||||
Net income | $ | 62,932 | $ | 64,366 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 32,036 | 31,346 | |||||
Change in fair value of earn-out liability | 890 | (455 | ) | ||||
Share-based compensation | 9,006 | 7,525 | |||||
Loss (gain) on disposal of property and equipment, net | 1,010 | (14 | ) | ||||
Provision for loss (recovery) on receivables | 828 | (52 | ) | ||||
Provision for revenue adjustments | 2,243 | 2,921 | |||||
Deferred income tax expense | 5,931 | 6,676 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (4,206 | ) | (3,386 | ) | |||
Prepaid expenses and other current assets | (4,473 | ) | (4,880 | ) | |||
Income taxes | (2,556 | ) | (3,193 | ) | |||
Accounts payable and accrued expenses | 14,090 | 12,991 | |||||
Net cash provided by operating activities | 117,731 | 113,845 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 2,101 | 5,989 | |||||
Purchases of property and equipment | (27,102 | ) | (34,344 | ) | |||
Acquisition of business, net of cash acquired | (39,000 | ) | (3,737 | ) | |||
Other | — | (356 | ) | ||||
Net cash used in investing activities | (64,001 | ) | (32,448 | ) | |||
Financing activities: | |||||||
Payments of finance lease obligations | (528 | ) | (228 | ) | |||
Proceeds from senior credit facility | 20,000 | — | |||||
Proceeds from exercise of stock options | 2,063 | 3,682 | |||||
Payments of cash dividends | (15,421 | ) | (13,213 | ) | |||
Repurchase of common stock (repurchase program) | (47,906 | ) | (44,985 | ) | |||
Proceeds from common stock issued under employee stock purchase plan | 261 | 237 | |||||
Cash settlement of share-based awards for tax withholdings | (3,032 | ) | (1,872 | ) | |||
Net cash used in financing activities | (44,563 | ) | (56,379 | ) | |||
Net increase in cash | 9,167 | 25,018 | |||||
Cash at beginning of period | 25,657 | 3,893 | |||||
Cash at end of period | $ | 34,824 | $ | 28,911 |
Forward Air Corporation | |||||||||||||||
Reconciliation to U.S. GAAP | |||||||||||||||
(In thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Net income | $ | 22,195 | $ | 22,329 | $ | 62,932 | $ | 64,366 | |||||||
Interest expense and other, net | 760 | 473 | 1,917 | 1,329 | |||||||||||
Income tax expense | 7,734 | 7,077 | 21,124 | 21,289 | |||||||||||
Depreciation and amortization | 10,528 | 10,295 | 32,036 | 31,346 | |||||||||||
EBITDA | $ | 41,217 | $ | 40,174 | $ | 118,009 | $ | 118,330 | |||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Net cash provided by operating activities | $ | 45,967 | $ | 46,855 | $ | 117,731 | $ | 113,845 | |||||||
Proceeds from disposal of property and equipment | 829 | 1,150 | 2,101 | 5,989 | |||||||||||
Purchases of property and equipment | (10,504 | ) | (16,738 | ) | (27,102 | ) | (34,344 | ) | |||||||
Free cash flow | $ | 36,292 | $ | 31,267 | $ | 92,730 | $ | 85,490 |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
Three months ended | |||
Actual | September 30, 2019 | ||
Net income | $ | 22,195 | |
Income allocated to participating securities | (236 | ) | |
Numerator for diluted income per share - net income | $ | 21,959 | |
Fully diluted share count | 28,082 | ||
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 | ||