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NEWS RELEASE

FORWARD AIR CORPORATION REPORTS FIRST QUARTER 2022 RESULTS
All-time record quarterly reported revenue, income from operations and net income per diluted share
Guides record second quarter revenue and net income per diluted share

GREENEVILLE, Tenn.- (BUSINESS WIRE) - April 27, 2022 - Forward Air Corporation (NASDAQ:FWRD) (the “Company”, “we”, “our”, or “us”) today reported financial results for the three months ended March 31, 2022 as presented in the tables below on a continuing operations basis.

Tom Schmitt, Chairman, President and CEO, commenting on first quarter results from continuing operations said, “Strong financial performance resulted in all-time quarterly records set for our first quarter reported revenue, net income and net income per diluted share. Our commitment to precision execution combined with a positive economy drove strong demand for our services. Higher quality freight in our network contributed to a record revenue per shipment for the first quarter for our less-than-truckload line of business. First quarter revenue growth of 29% came in above the high end of our guidance range of 18% to 22% and our reported net income per diluted share of $1.57 exceeded the high end of our $1.15 to $1.19 guidance range.”

Mr. Schmitt continued, “In the first weeks of the second quarter, we have seen continued strength, and believe we will see similar strong performance in the second quarter. Momentum is expected to continue as more and more cruise lines, conferences and trade shows come back. At this point, we are optimistic that we can achieve our previously announced 2023 net income per diluted share of $6.30 in 2022, and are now targeting $6.70 net income per diluted share in 2023 without any major acquisitions.”

In closing, Mr. Schmitt said, “In the first quarter, we achieved unparalleled reported revenue, income from operations and net income per diluted share quarterly financial results. I appreciate the outstanding efforts of our teammates and independent contractors as we could not have reached this monumental achievement without their hard work and valuable contributions.”

Regarding the Company’s second quarter 2022 continuing operations guidance, Rebecca J. Garbrick, CFO, said, “We expect our year-over-year revenue growth will be 18% to 22% and net income per diluted share to be between $1.59 to $1.63, compared to reported net income per diluted share of $1.11 and adjusted net income per diluted share of $1.10 in the second quarter of 2021.”



Continuing OperationsThree Months Ended
(in thousands, except per share data)March 31, 2022March 31, 2021ChangePercent Change
Operating revenue$466,961 $362,202 $104,759 28.9 %
Income from operations $57,351 $22,724 $34,627 152.4 %
Operating margin12.3 %6.3 %600 bps
Net income$42,686 $16,714 $25,972 155.4 %
Net income per diluted share$1.57 $0.60 $0.97 161.7 %
Cash provided by operating activities$62,486 16,913 $45,573 269.5 %
Non-GAAP Financial Measures: 1
Adjusted income from operations$57,351 $29,679 $27,672 93.2 %
Adjusted net income$42,686 $22,104 $20,582 93.1 %
Adjusted net income per diluted share$1.57 $0.80 $0.77 96.3 %
EBITDA$68,481 $31,961 $36,520 114.3 %
Free cash flow$53,089 $14,883 $38,206 256.7 %
1 Reconciliation of these non-GAAP financial measures are provided below the financial tables.
On April 25, 2022, our Board of Directors declared a quarterly cash dividend of $0.24 per share of common stock. The dividend is payable to shareholders of record at the close of business on May 26, 2022 and is expected to be paid on June 14, 2022. This quarterly dividend is made pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.96 for the full year 2022, payable in quarterly increments of $0.24 per share of common stock. The actual declaration of future cash dividends, and the establishment of record and payment dates, is subject to final determination by the Board of Directors each quarter after its review of the Company’s financial performance and position.

The Board approved a strategy to divest the Pool Distribution business (“Pool”) on April 23, 2020, and the sale of Pool was completed on February 12, 2021. Accordingly, the results of operations and cash flows for Pool have been presented as a discontinued operation and have been excluded from continuing operations in this release for all periods presented.

Review of Financial Results
Forward Air will hold a conference call to discuss first quarter 2022 results on Thursday, April 28, 2022 at 9:00 a.m. EDT. The Company’s conference call will be available online on the Investor Relations portion of the Company’s website at www.forwardaircorp.com, or by dialing (844) 721-7237, Access Code: 7291478.

A replay of the conference call will be available on the Investor Relations portion of the Company’s website at www.forwardaircorp.com, which we use as a primary mechanism to communicate with our investors. Investors are urged to monitor the Investors Relations portion of the Company’s website to easily find or navigate to current and pertinent information about us.

About Forward Air Corporation
Forward Air is a leading asset-light freight and logistics company that provides services across the United States and Canada. We provide expedited less-than-truckload (“LTL”) services, including local pick-up and delivery, shipment consolidation/deconsolidation, warehousing, and customs brokerage by utilizing a comprehensive national network of terminals. In addition, we offer final mile services, including delivery of heavy-bulky freight, truckload brokerage services, including dedicated fleet services; and intermodal, first-and last-mile, high-value drayage services, both to and from seaports and railheads, dedicated contract and Container Freight Station warehouse and handling services. For more information, visit our website at www.forwardaircorp.com.
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Forward Air Corporation
Condensed Consolidated Statements of Comprehensive Income
(Unaudited, in thousands, except per share data)
 Three Months Ended
March 31,
2022		March 31,
2021
Operating revenue:
Expedited Freight$376,591 $304,186 
Intermodal90,440 58,514 
Eliminations and other operations(70)(498)
Operating revenues466,961 362,202 
Operating expenses:  
Purchased transportation224,832 184,608 
Salaries, wages and employee benefits86,081 74,897 
Operating leases22,673 19,167 
Depreciation and amortization11,130 9,237 
Insurance and claims11,968 9,741 
Fuel expense5,865 3,702 
Other operating expenses47,061 38,126 
Total operating expenses409,610 339,478 
Income (loss) from continuing operations:
Expedited Freight47,680 24,530 
Intermodal11,146 4,509 
Other Operations(1,475)(6,315)
Income from continuing operations57,351 22,724 
Other expense:  
Interest expense(784)(1,165)
Total other expense(784)(1,165)
Income before income taxes56,567 21,559 
Income tax expense13,881 4,845 
Net income from continuing operations42,686 16,714 
Loss from discontinued operation, net of tax— (5,533)
Net income and comprehensive income $42,686 $11,181 
Net income per share: 
Basic net income (loss) per share
Continuing operations$1.57 $0.61 
Discontinued operation— (0.20)
Net income per basic share1
$1.57 $0.40 
Diluted net income (loss) per share
Continuing operations$1.57 $0.60 
Discontinued operation— (0.20)
Net income per diluted share$1.57 $0.40 
Dividends per share$0.24 $0.21 
1 Rounding may impact summation of amounts.

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Expedited Freight Segment Information
(In thousands)
(Unaudited)
Three Months Ended
 March 31,
2022		Percent of RevenueMarch 31,
2021		Percent of RevenueChangePercent Change
Operating revenue:
Network 1
$243,414 64.6 %$178,627 58.7 %$64,787 36.3 %
Truckload55,908 14.8 52,380 17.2 $3,528 6.7 
Final Mile65,758 17.5 62,256 20.5 $3,502 5.6 
Other11,511 3.1 10,923 3.6 $588 5.4 
Total operating revenue376,591 100.0 304,186 100.0 $72,405 23.8 
Operating expenses:
Purchased transportation200,034 53.1 164,364 54.0 $35,670 21.7 
Salaries, wages and employee benefits68,220 18.1 61,687 20.3 $6,533 10.6 
Operating leases15,731 4.2 14,218 4.7 $1,513 10.6 
Depreciation and amortization7,481 2.0 6,798 2.2 $683 10.0 
Insurance and claims8,751 2.3 7,611 2.5 $1,140 15.0 
Fuel expense2,650 0.7 1,993 0.7 $657 33.0 
Other operating expenses26,044 6.9 22,985 7.6 $3,059 13.3 
Total operating expenses328,911 87.3 279,656 91.9 $49,255 17.6 
Income from operations$47,680 12.7 %$24,530 8.1 %$23,150 94.4 %
1Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.

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Expedited Freight Operating Statistics
Three Months Ended
March 31,
2022		March 31,
2021		Percent Change
Business days64 63 1.6 %
Tonnage 1,2
    Total pounds717,611 651,339 10.2 
    Pounds per day11,213 10,339 8.5 
Shipments 1,2
    Total shipments892 1,026 (13.1)
    Shipments per day13.9 16.3 (14.7)
Weight per shipment804 635 26.6 
Revenue per hundredweight 3
$32.67 $27.56 18.5 
Revenue per hundredweight, ex fuel 3
$26.74 $23.86 12.1 
Revenue per shipment 3
$265.23 $174.30 52.2 
Revenue per shipment, ex fuel 3
$217.53 $150.82 44.2 
Network revenue from door-to-door shipments as a percentage of network revenue 3,4
45.2 %48.4 %(6.6)
1 In thousands
2 Excludes accessorial, Truckload and Final Mile products
3 Includes intercompany revenue between the Network and Truckload revenue streams
4 Door-to-door shipments include all shipments with a pickup and/or delivery

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Intermodal Segment Information
(In thousands)
(Unaudited)
Three Months Ended
 March 31,
2022		Percent of RevenueMarch 31,
2021		Percent of RevenueChangePercent Change
Operating revenue$90,440 100.0 %58,514 100.0 %31,926 54.6 %
Operating expenses:
Purchased transportation24,868 27.5 20,603 35.2 4,265 20.7 
Salaries, wages and employee benefits17,935 19.8 14,063 24.0 3,872 27.5 
Operating leases6,941 7.7 4,837 8.3 2,104 43.5 
Depreciation and amortization3,610 4.0 2,436 4.2 1,174 48.2 
Insurance and claims2,060 2.3 2,402 4.1 (342)(14.2)
Fuel expense3,215 3.6 1,710 2.9 1,505 88.0 
Other operating expenses20,665 22.8 7,954 13.6 12,711 159.8 
Total operating expenses79,294 87.7 54,005 92.3 25,289 46.8 
Income from operations11,146 12.3 %4,509 7.7 %6,637 147.2 %

Intermodal Operating Statistics
Three Months Ended
March 31,
2022		March 31,
2021		Percent Change
Drayage shipments88,312 89,909 (1.8)%
Drayage revenue per shipment890 553 60.9 %
Number of locations29 27 7.4 %

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Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 March 31,
2022		December 31,
2021
Assets
Current assets: 
Cash and cash equivalents$61,630 $37,316 
Accounts receivable, net236,666 208,085 
Other receivables4,488 8,097 
Other current assets22,468 29,309 
Total current assets325,252 282,807 
Property and equipment, net224,060 219,095 
Operating lease right-of-use assets153,337 148,198 
Goodwill265,639 266,752 
Other acquired intangibles, net150,638 154,717 
Other assets47,880 46,254 
Total assets$1,166,806 $1,117,823 
Liabilities and Shareholders’ Equity 
Current liabilities: 
Accounts payable$54,430 $44,837 
Accrued expenses66,467 61,621 
Other current liabilities12,479 4,614 
Current portion of debt and finance lease obligations6,069 6,088 
Current portion of operating lease liabilities48,499 47,532 
Total current liabilities187,944 164,692 
Finance lease obligations, less current portion8,767 9,571 
Long-term debt, less current portion and debt issuance costs155,125 155,466 
Operating lease liabilities, less current portion105,773 101,409 
Other long-term liabilities52,376 49,624 
Deferred income taxes45,050 43,407 
Shareholders’ equity:
Preferred stock— — 
Common stock269 270 
Additional paid-in capital261,444 258,474 
Retained earnings350,058 334,910 
Total shareholders’ equity611,771 593,654 
Total liabilities and shareholders’ equity$1,166,806 $1,117,823 
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Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2022		March 31,
2021
Operating activities:
Net income from continuing operations$42,686 $16,714 
Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations
Depreciation and amortization11,130 9,237 
Change in fair value of earn-out liability(294)(48)
Share-based compensation expense2,761 2,597 
Provision for revenue adjustments1,304 1,777 
Deferred income tax expense (benefit)1,643 (505)
Other132 92 
Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:
Accounts receivable(30,278)(28,023)
Other receivables3,609 (13,339)
Other current and noncurrent assets13,818 7,085 
Accounts payable and accrued expenses15,975 21,326 
Net cash provided by operating activities of continuing operations62,486 16,913 
Investing activities:
Proceeds from sale of property and equipment511 665 
Purchases of property and equipment(9,908)(2,695)
Purchases of a business, net of cash acquired— (15,000)
Net cash used in investing activities of continuing operations(9,397)(17,030)
Financing activities:
Repayments of finance lease obligations(1,070)(467)
Payments on credit facility(375)— 
Proceeds from issuance of common stock upon stock option exercises206 2,147 
Payments of dividends to shareholders(6,502)(5,797)
Repurchases and retirement of common stock(17,780)(9,998)
Payment of minimum tax withholdings on share-based awards(3,254)(2,744)
Contributions from subsidiary held for sale— 1,118 
Net cash used in financing activities from continuing operations(28,775)(15,741)
Net increase (decrease) in cash and cash equivalents of continuing operations24,314 (15,858)
Cash from discontinued operation:
Net cash used in operating activities of discontinued operation— (6,902)
Net cash provided by investing activities of discontinued operation— 8,020 
Net cash used in financing activities of discontinued operation— (1,118)
Net increase (decrease) in cash and cash equivalents24,314 (15,858)
Cash and cash equivalents at beginning of period of continuing operations37,316 40,254 
Cash at beginning of period of discontinued operation— — 
Net increase (decrease) in cash and cash equivalents24,314 (15,858)
Less: cash at end of period of discontinued operation— — 
Cash and cash equivalents at end of period of continuing operations$61,630 $24,396 
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Forward Air Corporation Reconciliation of Non-GAAP Financial Measures

In this press release, the Company uses non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with GAAP. The Company believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions as well as evaluating the Company’s performance.

For the three months ended March 31, 2022 and 2021, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), free cash flow, and adjusted income from continuing operations, adjusted net income, and adjusted net income per diluted share. All non-GAAP financial measures are presented on a continuing operations basis.

The Company believes that EBITDA improves comparability from period to period by removing the impact of its capital structure (interest and financing expenses), asset base (depreciation and amortization) and tax impacts. The Company believes that free cash flow is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance shareholder value. The Company believes providing adjusted income from operations, net income and net income per share allows investors to compare Company performance consistently over various periods without regard to the impact of unusual, nonrecurring or nonoperational items.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s financial results prepared in accordance with GAAP. Non-GAAP financial information does not represent a comprehensive basis of accounting. As required by the Securities and Exchange Act of 1933 and the rules and regulations promulgated thereunder, the Company has included, for the periods indicated, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure.

The following is a reconciliation of net income to EBITDA for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended
Continuing OperationsMarch 31, 2022March 31, 2021
Net income$42,686 $16,714 
Interest expense784 1,165 
Income tax expense13,881 4,845 
Depreciation and amortization11,130 9,237 
EBITDA$68,481 $31,961 

The following is a reconciliation of net cash provided by operating activities to free cash flow for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended
Continuing OperationsMarch 31, 2022March 31, 2021
Net cash provided by operating activities$62,486 $16,913 
Proceeds from sale of property and equipment511 665 
Purchases of property and equipment(9,908)(2,695)
Free cash flow$53,089 $14,883 

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The following is a reconciliation of reported income from operations, net income, and net income per diluted share to adjusted income from operations, net income, and net income per diluted share for the three months ended March 31, 2022 and 2021 (in thousands, except net income per diluted share):

Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Continuing OperationsIncome From Operations
Net Income1
Net Income Per Diluted Share1
Income From Operations
Net Income1
Net Income Per Diluted Share1
As Reported$57,351 $42,686 $1.57 $22,724 $16,714 $0.60 
Professional fees for cybersecurity and shareholder engagement activities— — — 6,955 5,390 0.20 
As Adjusted$57,351 $42,686 $1.57 $29,679 $22,104 $0.80 
1 Net income and net income per diluted share amounts are after tax

The following is a reconciliation of reported net income per diluted share to adjusted net income per diluted share for the three months ended June 30, 2021:
Continuing Operations
Net Income Per Diluted Share1
As reported$1.11 
Change in the fair value of the earn-out liability(0.01)
As adjusted$1.10 
1 Net income per diluted share is after tax.


The following information is provided to supplement this press release.
Actual - Continuing OperationsThree Months Ended March 31, 2022
Net income from continuing operations42,686 
Income allocated to participating securities(248)
Numerator for diluted net income per share - net income$42,438 
Weighted-average common shares and common share equivalent outstanding - diluted27,100 
Diluted net income per share$1.57 
ProjectedFull year 2022
Projected tax rate - continuing operations25.9 %
Projected purchases of property and equipment, net of proceeds from sale of property and equipment$40,000 
ProjectedDecember 31, 2022
Projected weighted-average common shares and common share equivalent outstanding - diluted26,900 
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Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements included in this press release relate to expected second quarter 2022 revenue, revenue growth, net income per diluted share, adjusted net income per diluted share and volume, expectations regarding continued momentum in our business into 2022 and 2023, expectations regarding expansion of operating margins, and the future of declaration of dividends.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, changes in fuel prices and/or fuel taxes, a decrease in demand for transportation services, pricing pressure, changes in freight volume, the COVID-19 pandemic, our ability to manage our growth and ability to grow, in part, through acquisitions, while being able to successfully integrate such acquisitions, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party carriers needed to serve our customers’ transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, loss of a major customer, increasing competition,, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2021.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.


SOURCE: Forward Air Corporation

Forward Air Corporation
Brandon Hammer, 423-636-7173
bhammer@forwardair.com

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