UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the Quarterly Period Ended June 30, 2001
                          Commission File No. 000-22490
                             FORWARD AIR CORPORATION
             (Exact name of registrant as specified in its charter)
                 TENNESSEE                                62-1120025
      (State or other jurisdiction of       (I.R.S. Employer Identification No.)
      incorporation or organization)
           430 AIRPORT ROAD
        GREENEVILLE, TENNESSEE                                37745
(Address of principal executive offices)                   (Zip Code)
       Registrant's telephone number, including area code: (423) 636-7100
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                          YES   [X]            NO    [ ]
The number of shares outstanding of the registrant's common stock, $.01 par
value, as of August 3, 2001 was 21,575,593.
                                TABLE OF CONTENTS
                             FORWARD AIR CORPORATION
                                                                            Page
                                                                           Number
                                                                        
PART I.  FINANCIAL INFORMATION
ITEM 1.  Financial Statements (Unaudited)
         Condensed Consolidated Balance Sheets -
             June 30, 2001 and December 31, 2000                               3
         Condensed Consolidated Statements of Income -
             Three and six months ended June 30, 2001 and 2000                 4
         Condensed Consolidated Statements of Cash Flows -
             Six months ended June 30, 2001 and 2000                           5
         Notes to Condensed Consolidated Financial Statements -
             June 30, 2001                                                     6
ITEM 2.  Management's Discussion and Analysis of
             Financial Condition and Results of Operations                     9
ITEM 3.  Quantitative and Qualitative Disclosure of Market Risk               13
PART II. OTHER INFORMATION
ITEM 1.  Legal Proceedings                                                    14
ITEM 2.  Changes in Securities and Use of Proceeds                            14
ITEM 3.  Defaults Upon Senior Securities                                      14
ITEM 4.  Submission of Matters to a Vote of Security Holders                  14
ITEM 5.  Other Information                                                    15
ITEM 6.  Exhibits and Reports on Form 8-K                                     15
SIGNATURES                                                                    16
                                       2
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
                             Forward Air Corporation
                      Condensed Consolidated Balance Sheets
                                                                 June 30, 2001    December 31, 2000
                                                                 ----------------------------------
                                                                   (Unaudited)         (Note 1)
                                                                 (In thousands, except share data)
                                                                            
ASSETS
Current assets:
   Cash and cash equivalents                                        $  27,727         $  15,589
   Accounts receivable, less allowance of $929 in 2001 and
      $1,184 in 2000                                                   28,214            33,617
   Other current assets                                                 4,530             5,719
                                                                 ----------------------------------
Total current assets                                                   60,471            54,925
Property and equipment                                                 66,546            64,120
Less accumulated depreciation and amortization                        (21,780)          (19,059)
                                                                 ----------------------------------
                                                                       44,766            45,061
Other assets                                                           18,300            15,982
                                                                 ----------------------------------
Total assets                                                        $ 123,537         $ 115,968
                                                                 ==================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                 $   5,377         $   9,730
   Accrued expenses                                                     8,360             8,425
   Current portion of long-term debt                                      474               532
   Current portion of capital lease obligations                           455               446
                                                                 ----------------------------------
Total current liabilities                                              14,666            19,133
Long-term debt, less current portion                                      672             2,784
Capital lease obligations, less current portion                         4,255             4,448
Deferred income taxes                                                   7,190             6,150
Shareholders' equity:
   Preferred stock                                                         --                --
   Common stock, $.01 par value:
      Authorized shares - 50,000,000
      Issued and outstanding shares - 21,569,247 in 2001 and
         21,311,799 in 2000                                               216               213
   Additional paid-in capital                                          42,693            40,578
   Retained earnings                                                   53,845            42,662
                                                                 ----------------------------------
Total shareholders' equity                                             96,754            83,453
                                                                 ----------------------------------
Total liabilities and shareholders' equity                          $ 123,537         $ 115,968
                                                                 ==================================
See notes to condensed consolidated financial statements.
                                       3
                             Forward Air Corporation
                   Condensed Consolidated Statements of Income
                                   (Unaudited)
                                                     Three months ended                Six months ended
                                            ---------------------------------------------------------------------
                                              June 30, 2001    June 30, 2000    June 30, 2001     June 30, 2000
                                            ---------------------------------------------------------------------
                                                                 (In thousands, except per share data)
                                                                                      
Operating revenue                               $ 56,965         $ 54,058         $ 117,688         $ 103,465
Operating expenses:
   Purchased transportation                       24,147           22,859            50,177            44,055
   Salaries, wages and employee benefits          12,468           12,025            26,637            23,459
   Operating leases                                2,939            2,543             5,571             5,112
   Depreciation and amortization                   2,197            1,408             3,997             2,781
   Insurance and claims                            1,785              837             3,052             1,643
   Other operating expenses                        5,373            4,620            10,404             9,278
                                            ---------------------------------------------------------------------
                                                  48,909           44,292            99,838            86,328
                                            ---------------------------------------------------------------------
Income from operations                             8,056            9,766            17,850            17,137
Other income (expense):
   Interest expense                                 (120)             (24)             (117)             (107)
   Other, net                                        190              166               381               307
                                            ---------------------------------------------------------------------
                                                      70              142               264               200
                                            ---------------------------------------------------------------------
Income before income taxes                         8,126            9,908            18,114            17,337
Income taxes                                       3,108            3,790             6,934             6,630
                                            ---------------------------------------------------------------------
Net income                                      $  5,018         $  6,118         $  11,180         $  10,707
                                            =====================================================================
Income per share:
   Basic                                        $   0.23         $   0.29         $    0.52         $    0.51
                                            =====================================================================
   Diluted                                      $   0.23         $   0.28         $    0.50         $    0.48
                                            =====================================================================
See notes to condensed consolidated financial statements.
                                       4
                             Forward Air Corporation
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
                                                                   Six months ended
                                                           -------------------------------
                                                           June 30, 2001     June 30, 2000
                                                           -------------------------------
                                                                    (In thousands)
                                                                       
Cash provided by operations                                   $ 18,687         $ 11,153
Investing activities:
Proceeds from disposal of property and equipment                   328               40
Purchases of property and equipment                             (3,179)          (6,967)
Acquisition of business                                         (2,833)              --
Other                                                             (200)            (117)
                                                           -------------------------------
Net cash used in investing activities                           (5,884)          (7,044)
Financing activities:
Payments of long-term debt                                      (2,170)          (1,314)
Payments of capital lease obligations                             (184)            (241)
Proceeds from exercise of stock options                          1,618            1,676
Common stock issued under employee stock purchase plan              71               96
                                                           -------------------------------
Net cash (used in) provided by financing activities               (665)             217
                                                           -------------------------------
Increase in cash and cash equivalents                         $ 12,138         $  4,326
                                                           ===============================
See notes to condensed consolidated financial statements.
                                       5
                             Forward Air Corporation
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)
                                  June 30, 2001
1.  BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six month period ended June 30, 2001 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2001. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Forward Air Corporation Annual Report on
Form 10-K for the year ended December 31, 2000.
The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date, but does not include all of the financial
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements.
2.  COMPREHENSIVE INCOME
The Company had no items of other comprehensive income in 2001 or 2000 and,
accordingly, comprehensive income is equivalent to net income.
                                       6
3.  NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):
                                                            Three months ended        Six months ended
                                                           June 30,     June 30,    June 30,      June 30,
                                                             2001         2000        2001          2000
                                                         ---------------------------------------------------
                                                                                      
Numerator:
   Numerator for basic and diluted income per share -
      net income                                           $ 5,018      $ 6,118      $11,180      $10,707
Denominator:
   Denominator for basic income per share -
      weighted-average shares                               21,558       21,047       21,494       20,916
   Effect of dilutive stock options                            716        1,163          786        1,230
                                                         ---------------------------------------------------
   Denominator for diluted income per share -
      adjusted weighted-average shares                      22,274       22,210       22,280       22,146
                                                         ===================================================
Basic income per share                                     $  0.23      $  0.29      $  0.52      $  0.51
                                                         ===================================================
Diluted income per share                                   $  0.23      $  0.28      $  0.50      $  0.48
                                                         ===================================================
4.  INCOME TAXES
For the three and six months ended June 30, 2001 and 2000, the effective income
tax rate varied from the statutory federal income tax rate of 35% primarily as a
result of the effect of state income taxes, net of the federal benefit, and
permanent differences.
5.  COMMITMENTS AND CONTINGENCIES
The primary claims in the Company's business are workers' compensation, property
damage, auto liability and medical benefits. Most of the Company's insurance
coverage provides for self-insurance levels with primary and excess coverage
which management believes is sufficient to adequately protect the Company from
catastrophic claims. In the opinion of management, adequate provision has been
made for all incurred claims up to the self-insured limits, including provision
for estimated claims incurred but not reported.
The Company estimates its self-insurance loss exposure by evaluating the merits
and circumstances surrounding individual known claims, and by performing
hindsight analysis to determine an estimate of probable losses on claims
incurred but not reported. Such losses could be realized immediately as the
events underlying the claims have already occurred as of the balance sheet
dates.
Because of the uncertainty of the ultimate resolution of outstanding claims, as
well as uncertainty regarding claims incurred but not reported, it is possible
that management's provision for these
                                       7
5. COMMITMENTS AND CONTINGENCIES (CONTINUED)
losses could change materially in the near term. However, no estimate can
currently be made of the range of additional loss that is at least reasonably
possible.
6.  ACQUISITION OF BUSINESS
In January 2001, the Company acquired certain assets of Expedited Delivery
Services, Inc. ("Expedited"), a deferred air freight contractor to the air cargo
industry based in Dallas, Texas. The Company paid approximately $2.8 million in
cash for certain assets of Expedited, including approximately $930,000 of
capitalized direct and/or out-of-pocket expenses related to the acquisition. The
acquisition was accounted for as a purchase and the excess cost over fair value
of the net assets acquired is being amortized on a straight-line basis over a
fifteen-year period. The allocation of the purchase price resulted in a
tentative allocation of $3.0 million to goodwill. The results of operations for
the acquired business are included in the consolidated statements of income from
the acquisition date forward.
7. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARD
The Company adopted Statement of Financial Accounting Standards (SFAS) No. 133,
Accounting for Derivative Instruments and Hedging Activities, effective January
1, 2001. The effect of the adoption of SFAS No. 133 was not material to the
Company's earnings, financial position, or cash flows.
In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill will no longer be amortized but
will be subject to annual impairment tests in accordance with the Statements.
Other intangible assets will continue to be amortized over their useful lives.
The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of the Statement is expected to result in an increase
in net income of $640,000 ($0.03 per share) per year. During 2002, the Company
will perform the first of the required impairment tests of goodwill and
indefinite lived intangible assets as of January 1, 2002 and has not yet
determined what the effect of these tests will be on the earnings and financial
position of the Company.
                                       8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Introduction
The Company provides scheduled ground transportation of cargo on a time-definite
basis. As a result of the Company's established transportation schedule and
network of terminals, its operating cost structure includes significant fixed
costs. The Company's ability to improve its operating margins will depend on its
ability to increase the volume of freight moving through its network.
Results of Operations
The following table shows the percentage relationship of expense items to
operating revenue for the periods indicated.
                                                      Three months ended                Six months ended
                                                ---------------------------------------------------------------
                                                June 30, 2001    June 30, 2000   June 30, 2001    June 30, 2000
                                                ---------------------------------------------------------------
                                                                                      
Operating revenue                                   100.0%           100.0%          100.0%           100.0%
Operating expenses:
   Purchased transportation                          42.4             42.3            42.6             42.6
   Salaries, wages and employee benefits             21.9             22.2            22.6             22.7
   Operating leases                                   5.2              4.7             4.7              4.9
   Depreciation and amortization                      3.9              2.6             3.4              2.7
   Insurance and claims                               3.1              1.5             2.6              1.6
   Other operating expenses                           9.4              8.6             8.9              8.9
                                                ---------------------------------------------------------------
                                                     85.9             81.9            84.8             83.4
Income from operations                               14.1             18.1            15.2             16.6
Other income (expense):
   Interest expense                                  (0.2)              --            (0.1)            (0.1)
   Other, net                                         0.4              0.2             0.3              0.3
                                                ---------------------------------------------------------------
                                                      0.2              0.2             0.2              0.2
                                                ---------------------------------------------------------------
Income before income taxes                           14.3             18.3            15.4             16.8
Income taxes                                          5.5              7.0             5.9              6.5
                                                ---------------------------------------------------------------
Net income                                            8.8%            11.3%            9.5%            10.3%
                                                ===============================================================
Three Months Ended June 30, 2001 compared to Three Months Ended June 30, 2000
Operating revenue increased by $2.9 million, or 5.4%, to $57.0 million in the
second quarter of 2001 from $54.1 million in the same period of 2000. This
increase resulted primarily from an increased volume from domestic and
international air cargo customers due, in part, to the Dedicated Transportation
Services, Inc. ("DTSI") acquisition completed in December 2000 and the Expedited
Delivery Services, Inc. ("Expedited") acquisition in January 2001, an increase
in the number of operating terminals and enhanced logistics services.
                                       9
Purchased transportation represented 42.4% of operating revenue in the second
quarter of 2001 compared to 42.3% in the same period of 2000. The increase in
purchased transportation as a percentage of operating revenue was attributed to
an increase in the number of miles driven to support the Forward Air network.
Salaries, wages and employee benefits were 21.9% of operating revenue in the
second quarter of 2001 compared to 22.2% for the same period of 2000. The
decrease in salaries, wages and employee benefits as a percentage of operating
revenue was attributed to a decrease in incentive payments, strategic cutbacks
and better group insurance experience.
Operating leases, the largest component of which is facility rent, were 5.2% of
operating revenue in the second quarter of 2001 compared to 4.7% in the same
period of 2000. The increase in operating leases as a percentage of operating
revenue between periods was attributable to an increase in the number and size
of terminals.
Depreciation and amortization expense as a percentage of operating revenue was
3.9% in the second quarter of 2001, compared to 2.6% in the same period of 2000.
The increase in depreciation and amortization expense as a percentage of
operating revenue was attributable to the depreciation of the capitalized costs
associated with the development of internal-use software and amortization of the
goodwill arising from the DTSI and Expedited acquisitions.
Insurance and claims were 3.1% of operating revenue in the second quarter of
2001, compared to 1.5% in the same period of 2000. The increase in insurance and
claims as a percentage of operating revenue resulted primarily from higher
premium costs and an increase in the frequency and severity of accidents during
the second quarter of 2001.
Other operating expenses were 9.4% of operating revenue in the second quarter of
2001 compared to 8.6% in the same period of 2000. The increase in other
operating expenses as a percentage of operating revenue was primarily
attributable to increasing the provision for bad debt expense and increased
maintenance costs during the second quarter of 2001.
Income from operations decreased by $1.7 million, or 17.5%, to $8.1 million for
the second quarter of 2001 compared to $9.8 million for the same period in 2000.
The decrease in income from operations was primarily a result of a higher
operating cost structure on a percentage of revenue basis.
Interest expense was $120,000, or 0.2% of operating revenue, in the second
quarter of 2001, compared with $24,000, or 0.0%, for the same period in 2000.
The increase in interest expense was a result of the discontinuation of the
capitalization of interest costs relating to the completion of the development
of internal-use software during the second quarter of 2001.
                                       10
Other income, net was $190,000, or 0.4% of operating revenue, in the second
quarter of 2001, compared to $166,000, or 0.2%, for the same period in 2000. The
increase in other income, net resulted from higher interest income attributed to
higher average cash and cash equivalent balances during the second quarter of
2001.
The combined federal and state effective tax rate for the second quarter of 2001
was 38.2% compared to a rate of 38.3% for the same period in 2000.
As a result of the foregoing factors, net income decreased by $1.1 million, or
18.0%, to $5.0 million for the second quarter of 2001, compared to $6.1 million
for the same period in 2000.
Six Months Ended June 30, 2001 compared to Six Months Ended June 30, 2000
Operating revenue increased by $14.2 million, or 13.7%, to $117.7 million in the
first six months of 2001 from $103.5 million in the same period of 2000. This
increase resulted primarily from an increased volume from domestic and
international air cargo customers due, in part, to the DTSI acquisition in
December 2000 and the Expedited acquisition in January 2001, an increase in the
number of operating terminals and enhanced logistics services.
Purchased transportation represented 42.6% of operating revenue in the first six
months of 2001 compared to 42.6% in the same period of 2000.
Salaries, wages and employee benefits were 22.6% of operating revenue in the
first six months of 2001 compared to 22.7% in the same period of 2000. The
decrease in salaries, wages and employee benefits as a percentage of operating
revenue was attributed to a decrease in incentive payments, strategic cutbacks
and better group insurance experience which was offset by the wind-down of the
LogTech Corporation operations.
Operating leases, the largest component of which is facility rent, were 4.7% of
operating revenue in the first six months of 2001 compared to 4.9% in the same
period of 2000. The decrease in operating leases as a percentage of operating
revenue between periods was attributable to improved leverage resulting from
increased operating revenue, which was offset by the increase in the number and
size of terminals.
Depreciation and amortization expense as a percentage of operating revenue was
3.4% in the first six months of 2001, compared to 2.7% in the same period of
2000. The increase in depreciation and amortization expense as a percentage of
operating revenue was attributable to the depreciation of the capitalized costs
associated with the development of internal-use software and amortization of the
goodwill arising from the DTSI and Expedited acquisitions.
Insurance and claims were 2.6% of operating revenue in the first six months of
2001, compared with 1.6% in the same period of 2000. The increase in insurance
and claims as a percentage of operating revenue resulted primarily from higher
premium costs and an increase in the frequency and severity of accidents during
the first six months of 2001.
                                       11
Other operating expenses were 8.9% of operating revenue in the first six months
of 2001 compared to 8.9% in the same period of 2000.
Income from operations increased by approximately $700,000, or 4.2%, to $17.9
million for the first six months of 2001 compared to $17.1 million for the same
period in 2000. The increase in income from operations was primarily a result of
an increase in operating revenue, which allowed the Company to spread the fixed
costs of the network over a larger revenue base.
Interest expense was $117,000, or 0.1% of operating revenue, in the first six
months of 2001, compared to $107,000, or 0.1%, for the same period in 2000. The
increase in interest expense was a result of the discontinuation of the
capitalization of interest costs relating to the completion of the development
of internal-use software offset by a decrease in average net borrowings during
the first six months of 2001.
Other income, net was $381,000, or 0.3% of operating revenue, in the first six
months of 2001, compared to $307,000, or 0.3%, for the same period in 2000. The
increase in other income, net resulted from higher interest income attributed to
higher average cash and cash equivalent balances during the first six months of
2001.
The combined federal and state effective tax rate for the first six months of
2001 was 38.3% compared to a rate of 38.2% for the same period in 2000.
As a result of the foregoing factors, net income increased by approximately
$500,000, or 4.4%, to $11.2 million for the first six months of 2001, compared
to $10.7 million for the same period in 2000.
Liquidity and Capital Resources
The Company has historically financed its working capital needs, including
capital purchases, with cash flows from operations and borrowings under the
Company's bank lines of credit. Net cash provided by operating activities
totaled approximately $18.7 million for the six months ended June 30, 2001,
compared with $11.2 million in the same period of 2000.
Net cash used in investing activities was approximately $5.9 million for the six
months ended June 30, 2001 compared with $7.0 million in the same period of
2000. Investing activities consisted primarily of the Expedited acquisition in
January 2001, and the purchase of operating equipment and management information
systems during the six months ended June 30, 2001.
Net cash used in financing activities totaled approximately $665,000 for the six
months ended June 30, 2001 compared with net cash provided by financing
activities of approximately $217,000 for the same period of 2000. Financing
activities included the repayment of long-term debt and capital leases and
proceeds received from the exercise of stock options.
                                       12
The Company's credit facility consists of a working capital line of credit. As
long as the Company complies with the financial covenants and ratios, the credit
facility permits it to borrow up to $20.0 million. Interest rates for advances
under the facility vary based on how the Company's performance measures against
covenants related to total indebtedness, cash flows, results of operations and
other ratios. The facility bears interest at LIBOR plus 1.00% to 1.90%, expires
in April 2002 and is secured by accounts receivable. The amount the Company can
borrow under the line of credit is reduced by the amount of any outstanding
letters of credit. At June 30, 2001, the Company had no borrowings outstanding
under the line of credit facility.
Management believes that its available cash, expected cash generated from future
operations and borrowings under available credit facilities, will be sufficient
to satisfy the Company's anticipated cash needs for at least the next twelve
months.
Forward-Looking Statements
The Company, or its executive officers and directors on behalf of the Company,
may from time to time make written or oral "forward-looking statements." Written
forward-looking statements may appear in documents filed with the Securities and
Exchange Commission, in press releases and in reports to shareholders. Oral
forward-looking statements may be made by the Company's executive officers and
directors on behalf of the Company to the press, potential investors, securities
analysts and others. The Private Securities Litigation Reform Act of 1995
contains a safe harbor for forward-looking statements. The Company relies on
this safe harbor in making such disclosures. In connection with this safe harbor
provision, the Company is hereby identifying important factors that could cause
actual results to differ materially from those contained in any forward-looking
statement made by or on behalf of the Company. Without limitation, factors that
might cause such a difference include economic factors such as recessions,
inflation, higher interest rates and downturns in customer business cycles, the
Company's inability to maintain its historical growth rate because of a
decreased volume of freight moving through the Company's network, competition,
surplus inventories, loss of a major customer, the inability of the Company's
information systems to handle an increased volume of freight moving through its
network, and the lack of availability and compensation of qualified independent
owner-operators needed to serve the Company's transportation needs. The Company
disclaims any intent or obligation to update these forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
The Company's exposure to market risk related to its remaining outstanding debt
is not significant.
                                       13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is, from time to time, a party to litigation arising in the normal
course of its business, most of which involve claims for personal injury and
property damage incurred in connection with the transportation of freight.
Management believes that none of these actions, individually or in the
aggregate, will have a material adverse effect on the financial condition or
results of operations of the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Company was held on May 21, 2001 for
the purpose of electing seven directors and approving the appointment of
independent auditors for 2001.
Shareholders elected each director nominee for a one-year term expiring at the
2002 annual meeting. The vote for each director was as follows:
                                                 For                  Against
                                              ----------             ---------
                                                               
        Bruce A. Campbell                     16,803,036             2,294,513
        Andrew C. Clarke                      18,706,017               391,532
        James A. Cronin, III                  18,698,991               398,558
        Hon. Robert K. Gray                   18,724,866               372,683
        Ray A. Mundy                          18,726,041               371,508
        Scott M. Niswonger                    16,702,981             2,394,568
        Richard H. Roberts                    18,702,342               395,207
The appointment of Ernst & Young LLP as independent auditors for 2001 was
ratified and approved as follows:
                   For                    Against             Abstain
                   ---                    -------             -------
                                                        
                19,071,740                25,354                455
                                       14
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(1)  Exhibits - Not applicable
(2)  Reports on Form 8-K - The Company did not file any reports on Form 8-K
     during the three months ended June 30, 2001.
                                       15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
                                       Forward Air Corporation
Date: August 9, 2001                   By: /s/ Andrew C. Clarke
                                           --------------------------------
                                           Andrew C. Clarke
                                           Chief Financial Officer
                                           and Senior Vice President
                                       16