Forward Air Corporation Reports Third Quarter 2012 Results

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Forward Air Corporation Reports Third Quarter 2012 Results

GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NAS: FWRD) today reported revenue, operating income, net income and diluted earnings per share for the third quarter and nine months ended September 30, 2012.

Operating revenue for the quarter ended September 30, 2012 increased 5.7% to $143.5 million from $135.7 million for the same quarter in 2011. Income from operations was $19.6 million, compared with $20.3 million in the prior-year quarter. As a percent of operating revenue, income from operations was 13.7%, compared with 15.0% in the same quarter last year. Net income during the period decreased to $12.3 million from $12.9 million in the prior-year quarter. Income per diluted share for the third quarter of 2012 was $0.41 compared with $0.44 in the prior-year quarter.


Operating revenue for the nine months ended September 30, 2012 increased 10.5% to $428.9 million from $388.1 million for the same period in 2011. Income from operations was $59.5 million, compared with $53.5 million in the prior-year period. As a percent of operating revenue, income from operations increased to 13.9% for the first nine months of 2012 from 13.8% for the same period in 2011. Net income during the period was $36.7 million compared to $32.8 million in the prior-year period. Income per diluted share from operations for the first nine months of 2012 was $1.24 compared with $1.11 in the prior-year period.

Bruce A. Campbell, Chairman, President, and CEO, commenting on the third quarter said, "On September 24th, we disclosed that, in large part due to macroeconomic issues, our airport-to-airport volumes had fallen off to the point that we needed to revise our guidance for the third quarter. Since that announcement, we have continued to experience choppiness in our daily tonnage numbers but there were some signs of firming last week. With limited visibility and realizing that one week certainly doesn't make a trend, we remain cautiously optimistic that volumes will continue to improve."

Commenting further, Mr. Campbell said, "Our operations group will continue to monitor our volumes and freight flows and will dynamically adjust to fluctuations in network volumes to effectively control our costs."

Turning to the Forward Air Solutions business segment, Mr. Campbell said, "We were extremely pleased to see that our pooled distribution segment performed according to plan and produced a modest profit for the quarter. As you know, the fourth quarter is traditionally our strongest period for this operating group. With decent year-over-year same store volumes as well as recent new business wins, we expect Solutions to make a meaningful contribution to our fourth quarter."

Commenting on the Company's guidance for the fourth quarter, Rodney L. Bell, Senior Vice President and CFO said, "We anticipate that our fourth quarter 2012 revenues will increase in the range of 5% to 8% over the comparable 2011 period, and we expect income per diluted share to be between $0.48 and $0.52 per share. This compares to $0.50 per share in the fourth quarter of 2011."

Review of Financial Results

Forward Air will hold a conference call to discuss third quarter 2012 results on Friday, October 19, 2012 at 9:00 a.m. EDT. The Company's conference call will be available online at www.forwardair.com or by dialing 800-230-1092. 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 endedNine months ended
September 30,
2012
 September 30,
2011
September 30,
2012
September 30,
2011
Operating revenue:
Forward Air
Airport-to-airport$96,914$92,966$290,006$266,606
Logistics20,87818,40963,31552,909
Other6,5287,25019,49820,524
Forward Air Solutions
Pool distribution19,194 17,124 56,102 48,104 
Total operating revenue143,514135,749428,921388,143
 
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport40,15036,142119,546104,411
Logistics15,95414,04147,75640,214
Other1,8221,7975,2524,929
Forward Air Solutions
Pool distribution5,176 4,109 14,989 11,067 
Total purchased transportation63,10256,089187,543160,621
Salaries, wages and employee benefits31,69833,40297,40895,336
Operating leases6,8956,67220,82620,083
Depreciation and amortization5,4255,42915,94015,734
Insurance and claims3,0982,1208,1326,140
Fuel expense2,3182,4067,2717,357
Other operating expenses11,352 9,311 32,303 29,390 
Total operating expenses123,888 115,429 369,423 334,661 
Income from operations19,62620,32059,49853,482
 
Other income (expense):
Interest expense(111)(131)(241)(468)
Other, net(21)10 (6)57 
Total other expense(132)(121)(247)(411)
Income before income taxes19,49420,19959,25153,071
Income taxes7,227 7,287 22,544 20,321 
Net income and comprehensive income$12,267 $12,912 $36,707 $32,750 
 
Net income per share:
Basic$0.42 $0.44 $1.27 $1.12 
Diluted$0.41 $0.44 $1.24 $1.11 
Weighted average shares outstanding:
Basic29,08829,23728,89529,236
Diluted29,66029,55229,48429,591
 
Dividends per share:$0.10 $0.07 $0.24 $0.21 
 
 
Forward Air Corporation
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 September 30,
2012
 

December 31,
2011 (a)

Assets
Current assets:
Cash and cash equivalents$92,988$58,801
Accounts receivable, net74,87870,922
Other current assets13,607 9,994
Total current assets181,473139,717
 
Property and equipment238,704223,135
Less accumulated depreciation and amortization101,941 93,267
Net property and equipment136,763129,868
Goodwill and other acquired intangibles:
Goodwill43,33243,332
Other acquired intangibles, net of accumulated amortization23,225 26,668
Total net goodwill and other acquired intangibles66,55770,000
Other assets1,825 1,566
Total assets$386,618 $341,151
 
 
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable$12,896$12,392
Accrued expenses16,47520,986
Current portion of debt and capital lease obligations386 552
Total current liabilities29,75733,930
 
Debt and capital lease obligations, less current portion88333
Other long-term liabilities6,8058,860
Deferred income taxes12,99111,126
 
Shareholders' equity:
Common stock292285
Additional paid-in capital62,97142,212
Retained earnings273,714 244,405
Total shareholders' equity336,977 286,902
Total liabilities and shareholders' equity$386,618 $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
September 30,
2012
September 30,
2011
Operating activities:
Net income$12,267$12,912
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization5,4255,429
Share-based compensation1,4271,502
Loss (gain) on disposal of property and equipment92(76)
Provision for loss on receivables11545
Provision for revenue adjustments490547
Deferred income taxes1,0234,140
Tax benefit for stock options exercised(148)(13)
Changes in operating assets and liabilities
Accounts receivable(426)(387)
Prepaid expenses and other current assets1,499(82)
Accounts payable and accrued expenses(5)(1,746)
Net cash provided by operating activities21,75922,271
 
Investing activities:
Proceeds from disposal of property and equipment131330
Purchases of property and equipment(2,181)(4,851)
Other80 15 
Net cash used in investing activities(1,970)(4,506)
 
Financing activities:
Payments of debt and capital lease obligations(139)(160)
Proceeds from exercise of stock options7,29590
Payments of cash dividends(2,937)(2,066)
Repurchase of common stock (repurchase program)(24,294)
Tax benefit for stock options exercised148 13 
Net cash provided by (used in) financing activities4,367 (26,417)
Net increase (decrease) in cash24,156(8,652)
Cash at beginning of period68,832 96,119 
Cash at end of period$92,988 $ Read Full Story

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