Forward Air Corporation : Reports First Quarter 2012 Results
04/19/2012| 04:10pm US/Eastern
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Forward Air Corporation (NASDAQ:FWRD) today reported revenue, operating
income, net income and diluted earnings per share for the three months
ended March 31, 2012.
Operating revenue for the quarter ended March 31, 2012 increased 14.1%
to $137.1 million from $120.2 million for the same quarter in 2011.
Income from operations was $16.8 million, compared with $13.3 million in
the prior-year quarter. As a percent of operating revenue, income from
operations increased to 12.3% from 11.1% for the same quarter last year.
Net income during the period increased to $10.3 million from $7.9
million in the prior-year quarter. Income per diluted share for the
first quarter of 2012 was $0.35 compared with $0.27 in the prior-year
quarter.
Bruce A. Campbell, Chairman, President, and CEO, commenting on the first
quarter said, "Our team delivered another solid operating performance
achieving top line growth of 14% and impressive operating income and
earnings growth of 26.3% and 29.6%, respectively."
Commenting further, Mr. Campbell said, "Within our Forward Air, Inc.
business segment, we continued to experience strong demand for our
airport-to-airport service offering which was nicely complemented by
considerable revenue growth from both our Logistics group, as well as,
from our Forward Air Complete pick-up and delivery product. In the first
quarter, Logistics revenue grew over 29% while Complete revenues grew
nearly 31% as we achieved a record 19.4% attachment rate to our linehaul
shipments."
Turning to the Forward Air Solutions business segment, Mr. Campbell
said, "Solutions showed year-over-year improvement and generated a small
profit in March. As we exit the historically most challenging quarter
for this service offering, we anticipate continued improvement in our
year-over-year results as a number of key initiatives, begun in the
first quarter, are completed and fully implemented."
In closing, Mr. Campbell said, "As always, I would like to thank the
Forward Air team of employees and independent contractors for their
dedication and hard work. Without them, these results would not have
been possible."
Commenting on the Company's guidance for the second quarter, Rodney L.
Bell, Senior Vice President and CFO said, "We anticipate that our second
quarter 2012 revenues will increase in the range of 8% to 12% over the
comparable 2011 period, and we expect income per diluted share to be
between $0.43 and $0.47 per share. This compares to $0.40 per share in
the second quarter of 2011."
Review of Financial Results
Forward Air will hold a conference call to discuss first quarter 2012
results on Friday, April 20, 2012 at 9:00 a.m. EDT. The Company's
conference call will be available online at www.forwardair.com
or by dialing 800-230-1951. A replay of the conference call will be
available at www.forwardair.com
beginning shortly after the completion of the live call.
About Forward Air Corporation
Forward Air Corporation operates two business segments, Forward Air,
Inc. and Forward Air Solutions, Inc.
Forward Air, Inc. is a high-service-level contractor to the air cargo
industry providing time-definite ground transportation services through
a network of terminals located on or near major airports in 85 cities in
the United States and Canada. It provides these services as a
cost-effective alternative to air transportation of cargo that must be
delivered at a specific time but is relatively less time-sensitive than
traditional air freight or when air transportation is not economical.
Forward Air Solutions, Inc. is a provider of pool distribution services.
Pool distribution involves the consolidation and shipment of several
smaller less-than-truckload shipments to a common area or region. Once
at the regional destination, the loads are deconsolidated, then grouped
with other shipments with common delivery points, and delivered in a
very precise, time-sensitive manner. Our pool distribution network
consists of terminals and service locations in 20 cities within the
Mid-Atlantic, Southeast, Midwest and Southwestern United States.
Forward Air Corporation
Consolidated Statements of Comprehensive Income
(In thousands, except per share data)
(Unaudited)
Three months ended
March 31, 2012
March 31, 2011
Operating revenue:
Forward Air
Airport-to-airport
$
90,627
$
82,147
Logistics
21,313
16,494
Other
6,202
6,403
Forward Air Solutions
Pool distribution
18,939
15,157
Total operating revenue
137,081
120,201
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport
36,758
32,593
Logistics
15,716
12,799
Other
1,598
1,473
Forward Air Solutions
Pool distribution
5,126
3,457
Total purchased transportation
59,198
50,322
Salaries, wages and employee benefits
33,174
30,495
Operating leases
7,106
6,706
Depreciation and amortization
5,121
5,082
Insurance and claims
2,798
2,175
Fuel expense
2,541
2,388
Other operating expenses
10,354
9,747
Total operating expenses
120,292
106,915
Income from operations
16,789
13,286
Other income (expense):
Interest expense
(51
)
(195
)
Other, net
17
16
Total other expense
(34
)
(179
)
Income before income taxes
16,755
13,107
Income taxes
6,482
5,238
Net income and comprehensive income
$
10,273
$
7,869
Net income per share:
Basic
$
0.36
$
0.27
Diluted
$
0.35
$
0.27
Weighted average shares outstanding:
Basic
28,692
29,135
Diluted
29,363
29,371
Dividends per share:
$
0.07
$
0.07
Forward Air Corporation
Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, 2012
December 31, 2011 (a)
Assets
Current assets:
Cash and cash equivalents
$
69,397
$
58,801
Accounts receivable, net
75,376
70,922
Other current assets
10,669
9,994
Total current assets
155,442
139,717
Property and equipment
235,138
223,135
Less accumulated depreciation and amortization
96,531
93,267
Net property and equipment
138,607
129,868
Goodwill and other acquired intangibles:
Goodwill
43,332
43,332
Other acquired intangibles, net of accumulated amortization
25,521
26,668
Total net goodwill and other acquired intangibles
68,853
70,000
Other assets
1,858
1,566
Total assets
$
364,760
$
341,151
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
$
16,563
$
12,392
Accrued expenses
23,163
20,986
Current portion of debt and capital lease obligations
521
552
Total current liabilities
40,247
33,930
Debt and capital lease obligations, less current portion
228
333
Other long-term liabilities
9,470
8,860
Deferred income taxes
10,058
11,126
Shareholders' equity:
Common stock
289
285
Additional paid-in capital
52,212
42,212
Retained earnings
252,256
244,405
Total shareholders' equity
304,757
286,902
Total liabilities and shareholders' equity
$
364,760
$
341,151
(a) Taken from audited financial statements, which are not presented
in their entirety.
Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended
March 31, 2012
March 31, 2011
Operating activities:
Net income
$
10,273
$
7,869
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization
5,121
5,082
Share-based compensation
1,606
1,443
Loss on disposal of property and equipment
196
21
Provision for loss (recovery) on receivables
110
(50
)
Provision for revenue adjustments
427
484
Deferred income taxes
(804
)
20
Tax benefit for stock options exercised
(204
)
(88
)
Changes in operating assets and liabilities
Accounts receivable
(2,491
)
(6,058
)
Prepaid expenses and other current assets
(925
)
(881
)
Accounts payable and accrued expenses
4,646
7,377
Net cash provided by operating activities
17,955
15,219
Investing activities:
Proceeds from disposal of property and equipment
205
279
Purchases of property and equipment
(13,098
)
(7,329
)
Other
(306
)
308
Net cash used in investing activities
(13,199
)
(6,742
)
Financing activities:
Payments of debt and capital lease obligations
(136
)
(171
)
Proceeds from exercise of stock options
8,192
4,838
Payments of cash dividends
(2,034
)
(2,055
)
Cash settlement of share-based awards for minimum tax withholdings
(386
)
--
Tax benefit for stock options exercised
204
88
Net cash provided by financing activities
5,840
2,700
Net increase in cash
10,596
11,177
Cash at beginning of period
58,801
74,504
Cash at end of period
$
69,397
$
85,681
Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
Three months ended
March 31,
Percent of
March 31,
Percent of
Percent
2012
Revenue
2011
Revenue
Change
Change
Operating revenue
Forward Air
$
118.4
86.4
%
$
105.2
87.5
%
$
13.2
12.5
%
FASI
19.2
14.0
15.2
12.6
4.0
26.3
Intercompany eliminations
(0.5
)
(0.4
)
(0.2
)
(0.1
)
(0.3
)
150.0
Total
137.1
100.0
120.2
100.0
16.9
14.1
Purchased transportation
Forward Air
54.3
45.9
46.9
44.6
7.4
15.8
FASI
5.3
27.6
3.6
23.7
1.7
47.2
Intercompany eliminations
(0.4
)
80.0
(0.2
)
100.0
(0.2
)
100.0
Total
59.2
43.2
50.3
41.8
8.9
17.7
Salaries, wages and employee benefits
Forward Air
25.7
21.7
23.9
22.7
1.8
7.5
FASI
7.5
39.1
6.6
43.4
0.9
13.6
Total
33.2
24.2
30.5
25.4
2.7
8.9
Operating leases
Forward Air
5.1
4.3
4.9
4.7
0.2
4.1
FASI
2.0
10.4
1.8
11.8
0.2
11.1
Total
7.1
5.2
6.7
5.6
0.4
6.0
Depreciation and amortization
Forward Air
4.0
3.4
4.1
3.9
(0.1
)
(2.4
)
FASI
1.1
5.7
1.0
6.6
0.1
10.0
Total
5.1
3.7
5.1
4.2
--
--
Insurance and claims
Forward Air
2.1
1.8
1.6
1.5
0.5
31.3
FASI
0.7
3.6
0.6
3.9
0.1
16.7
Total
2.8
2.0
2.2
1.8
0.6
27.3
Fuel expense
Forward Air
1.1
0.9
1.1
1.0
--
--
FASI
1.4
7.3
1.3
8.6
0.1
7.7
Total
2.5
1.8
2.4
2.0
0.1
4.2
Other operating expenses
Forward Air
8.7
7.3
8.4
8.0
0.3
3.6
FASI
1.8
9.4
1.3
8.6
0.5
38.5
Intercompany eliminations
(0.1
)
20.0
--
--
(0.1
)
(100.0
)
Total
10.4
7.6
9.7
8.1
0.7
7.2
Income (loss) from operations
Forward Air
17.4
14.7
14.3
13.6
3.1
21.7
FASI
(0.6
)
(3.1
)
(1.0
)
(6.6
)
0.4
(40.0
)
Total
$
16.8
12.3
%
$
13.3
11.1
%
$
3.5
26.3
%
Forward Air Corporation
Forward Air Inc. Operating Statistics
Three months ended
March 31,
March 31,
Percent
2012
2011
Change
Operating ratio
85.3
%
86.4
%
(1.3
)%
Business days
64.0
64.0
--
Business weeks
12.8
12.8
--
Airport-to-airport:
Tonnage
Total pounds ¹
422,139
400,558
5.4
Average weekly pounds ¹
32,980
31,294
5.4
Linehaul shipments
Total linehaul
637,438
572,456
11.4
Average weekly
49,800
44,723
11.4
Forward Air Complete shipments
123,366
83,006
48.6
As a percentage of linehaul shipments
19.4
%
14.5
%
33.8
Average linehaul shipment size
662
700
(5.4
)
Revenue per pound ²
Linehaul yield
$
16.89
$
16.69
1.0
Fuel surcharge impact
1.91
1.66
1.2
Forward Air Complete impact
2.70
2.18
2.5
Total airport-to-airport yield
$
21.50
$
20.53
4.7
Logistics:
Miles
Owner operator ¹
8,920
6,980
27.8
Third party ¹
3,687
3,259
13.1
Total Miles
12,607
10,239
23.1
Revenue per mile
$
1.69
$
1.62
4.3
Cost per mile
$
1.25
$
1.25
--
%
¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent
of total yield.
Important Information
This press release contains "forward-looking statements," as defined in
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Forward-looking
statements are statements other than historical information or
statements of current condition and relate to future events or our
future financial performance. Some forward-looking statements may be
identified by use of such terms as "believes," "anticipates," "intends,"
"plans," "estimates," "projects" or "expects." Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by such 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, our inability to maintain our historical growth rate because of
a decreased volume of freight moving through our network or decreased
average revenue per pound of freight moving through our network,
increasing competition and pricing pressure, surplus inventories, loss
of a major customer, the creditworthiness of our customers and their
ability to pay for services rendered, our ability to secure terminal
facilities in desirable locations at reasonable rates, the inability of
our information systems to handle an increased volume of freight moving
through our network, changes in fuel prices, claims for property damage,
personal injuries or workers' compensation, employment matters including
rising health care costs, enforcement of and changes in governmental
regulations, environmental and tax matters, the handling of hazardous
materials, the availability and compensation of qualified independent
owner-operators and freight handlers needed to serve our transportation
needs and our inability to successfully integrate acquisitions. As a
result of the foregoing, no assurance can be given as to future
financial condition, cash flows or results of operations. We undertake
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
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