Annual report pursuant to Section 13 and 15(d)

Operations and Summary of Significant Accounting Policies (Tables)

v3.22.4
Operations and Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Property and Equipment
Property and equipment as of December 31, 2022 and 2021 consisted of the following:
December 31,
2022		 December 31,
2021
Land $ 26,479  $ 26,479 
Buildings and improvements 94,277  67,269 
Equipment 287,872  259,030 
Leasehold improvements 17,510  13,780 
Computer software 29,511  26,333 
Construction in progress 14,100  27,071 
Total property and equipment 469,749  419,962 
Less accumulated depreciation and amortization 220,669  200,867 
Total property and equipment, net $ 249,080  $ 219,095 
Schedule of Goodwill
Changes in the carrying amount of goodwill during the years ended December 31, 2022, 2021 and 2020 are summarized as follows:
Expedited Freight Intermodal Consolidated
Balance as of December 31, 2020 $ 165,268  $ 79,714  $ 244,982 
Acquisitions 4,020  17,750  21,770 
Balance as of December 31, 2021 $ 169,288  $ 97,464  $ 266,752 
Acquisitions —  34,754  34,754 
Acquisition adjustment —  4,678  4,678 
Balance as of December 31, 2022 $ 169,288  $ 136,896  $ 306,184 
Weighted-Average Useful Life of Acquired Intangible Assets The acquired intangible assets have a weighted-average useful life as follows:
Intangible Assets Weighted-Average Useful Life
Customer relationships 14 years
Non-compete agreements 4 years
Trade names 4 years
The estimated useful life of acquired intangible assets as of the acquisition date are summarized in the following table:
Estimated Useful Lives
Proficient Transport J&P BarOle Edgmon
Customer relationships 8 years 12 years 9 years 9 years
Non-compete agreements 1 year 5 years 5 years 5 years
Finite-lived Intangible Assets Amortization Expense
Changes in the carrying amount of acquired intangible assets during 2022 and 2021 are summarized as follows:

Gross Carrying Amount
Customer Relationships1
Non-Compete Agreements Trade Names Total
Balance as of December 31, 2020 $ 228,416  $ 8,125  $ 1,500  $ 238,041 
Acquisitions 22,961  1,051  —  24,012 
Balance as of December 31, 2021 $ 251,377  $ 9,176  $ 1,500  $ 262,053 
Acquisitions 21,655  272  —  21,927 
Acquisition adjustment (5,162) (692) —  (5,854)
Balance as of December 31, 2022 $ 267,870  $ 8,756  $ 1,500  $ 278,126 


Accumulated Amortization
Customer Relationships1
Non-Compete Agreements Trade Names Total
Balance as of December 31, 2020 $ 85,930  $ 5,579  $ 1,500  $ 93,009 
Amortization expense 13,164  1,164  —  14,328 
Balance as of December 31, 2021 $ 99,094  $ 6,743  $ 1,500  $ 107,337 
Amortization expense 15,286  702  —  15,988 
Balance as of December 31, 2022 $ 114,380  $ 7,445  $ 1,500  $ 123,325 
1 Carrying value as of December 31, 2022, 2021 and 2020 is inclusive of $16,501 of accumulated impairment.
Schedule of Accrued Liabilities Accrued expenses as of December 31, 2022 and 2021 consisted of the following:
December 31,
2022		 December 31,
2021
Accrued payroll and related items $ 23,804  $ 29,364 
Insurance and claims accruals 19,961  21,172 
Payables to Leased Capacity Providers 10,526  11,085 
Accrued expenses $ 54,291  $ 61,621 
Self-Insurance Loss Reserves Below is a summary of the Company’s risk retention on vehicle liability insurance coverage maintained by the Company through $10,000 (in thousands):
Company
Risk Retention		 Frequency Layer Policy Term
Expedited Freight¹
LTL business $ 5,000  Occurrence/Accident²
$0 to $5,000
 10/1/2022 to 10/1/2023
Truckload business $ 2,000  Occurrence/Accident²
$0 to $2,000
 10/1/2022 to 10/1/2023
LTL, Truckload and Intermodal businesses $ 5,000  Policy Term Aggregate³
$5,000 to $10,000
 10/1/2022 to 10/1/2023
Intermodal $ 1,000  Occurrence/Accident²
$0 to $1,000
 10/1/2022 to 10/1/2023
¹ Excluding the Final Mile business, which is primarily a brokered service.
² For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident.
³ During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute.
Net Income (Loss) per Share
A reconciliation of net income (loss) attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share during the years ended December 31, 2022, 2021 and 2020 is as follows:
 
2022 2021 2020
Numerator:
Net income and comprehensive income from continuing operations $ 193,191  $ 116,091  $ 52,767 
Net (loss) income and comprehensive (loss) income from discontinued operation —  (10,232) (29,034)
Net income attributable to Forward Air $ 193,191  $ 105,859  $ 23,733 
Income allocated to participating securities from continuing operations (1,070) (807) (385)
Loss allocated to participating securities from discontinued operation —  70  — 
Income allocated to participating securities (1,070) (737) (385)
Numerator for basic and diluted net income per share for continuing operations $ 192,121  $ 115,284  $ 52,382 
Numerator for basic and diluted net (loss) income per share for discontinued operation $ —  $ (10,162) $ (29,034)
Denominator:
Denominator for basic net income per share - weighted-average number of common shares outstanding 26,783  27,155  27,631 
Dilutive stock options and performance share awards 143  137  66 
Denominator for diluted net income per share - weighted-average number of common shares and common share equivalents outstanding 26,926  27,292  27,697 
Basic net income (loss) per share:
    Continuing operations $ 7.17  $ 4.25  $ 1.90 
    Discontinued operation —  (0.37) (1.05)
Net income per basic share1
$ 7.17  $ 3.87  $ 0.84 
Diluted net income (loss) per share:
    Continuing operations $ 7.14  $ 4.22  $ 1.89 
    Discontinued operation —  (0.37) (1.05)
Net income per diluted share $ 7.14  $ 3.85  $ 0.84 
1 Rounding may impact summation of amounts.
Schedule of Anti-Dilutive Shares Not Included in Calculation of Net Income per Diluted Share
The number of shares that were not included in the calculation of net income (loss) per diluted share because to do so would have been anti-dilutive for the years ended December 31, 2022, 2021 and 2020 are as follows:
2022 2021 2020
Anti-dilutive stock options 57  —  206 
Anti-dilutive performance shares 13  —  15 
Anti-dilutive restricted shares and deferred stock units 2  —  3 
Total anti-dilutive shares 72  —  224