Forward Air Corporation Reports Fourth Quarter and Fiscal 2012 Results and Announces Quarterly Cash

Forward Air Corporation Reports Fourth Quarter and Fiscal 2012 Results and Announces Quarterly Cash Dividend

GREENEVILLE, Tenn.--(BUSINESS WIRE)-- Forward Air Corporation (NAS: FWRD) today reported results for the fourth quarter and year ended December 31, 2012.

Operating revenue for the quarter ended December 31, 2012 increased 4.9% to $155.5 million from $148.2 million for the same quarter in 2011. Income from operations was $24.0 million, compared with $23.6 million for the fourth quarter of 2011, an increase of 1.7%. Net income per diluted share for the fourth quarter of 2012 was $0.54 compared with $0.50 in the same quarter of 2011, an increase of 8.0%.


Operating revenue for the year ended December 31, 2012 increased 8.9% to $584.4 million from $536.4 million for the year ended December 31, 2011. Income from operations was $83.5 million, compared with $77.1 million in 2011. Net income per diluted share for the year ended December 31, 2012 was $1.78 compared with $1.60 in 2011.

Bruce A. Campbell, Chairman, President and CEO, said, "Overall, we achieved the fourth quarter Forward Air, Inc. operating segment results that we anticipated." Commenting on the Forward Air Solutions business segment, Mr. Campbell said, "Over the course of 2012, we made good progress within our Solutions service offering. In the fourth quarter, we grew revenue 12.5% primarily on revenues from newly-won business. While the profitability from our new business wins is initially offset by the start-up costs associated with any new business launch, we are encouraged by how robust our new business pipeline looks for the first quarter."

In closing, Mr. Campbell said, "As always, I would like to acknowledge our employees and independent contractors. Their contributions were critical to our delivering another solid year for Forward Air and continued value to our shareholders."

In commenting on the Company's guidance for the first quarter, Rodney L. Bell, Senior Vice President and CFO said, "We anticipate our first quarter 2013 revenues will increase in the range of 5% to 8% over the comparable 2012 period, and we expect income per diluted share to be between $0.36 and $0.40 per share. This compares to $0.35 per share in the first quarter of 2012."

On February 8, 2013, our Board of Directors declared a quarterly cash dividend of $0.10 per share of common stock. The dividend is payable to shareholders of record at the close of business on March 8, 2013, and is expected to be paid on March 22, 2013.

This quarterly dividend is pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.40 per share of common stock, payable in quarterly increments of $0.10 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.

Review of Financial Results

Forward Air will hold a conference call to discuss fourth quarter and year end 2012 results on Tuesday, February 12, 2013 at 9:00 a.m. EST. The Company's conference call will be available online at www.forwardair.com or by dialing 800-230-1059. 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 87 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 19 cities within the Mid-Atlantic, Southeast, Midwest and Southwestern United States.

Forward Air Corporation

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

Three months ended

Year ended

December 31,
2012

December 31,
2011

December 31,
2012

December 31,
2011

Operating revenue:

Forward Air

Airport-to-airport

$

100,691

$

95,024

$

390,697

$

361,630

Logistics

20,473

21,485

83,787

74,394

Other

6,639

7,116

26,137

27,640

Forward Air Solutions

Pool distribution

27,722

24,634

83,825

72,738

Total operating revenue

155,525

148,259

584,446

536,402

Operating expenses:

Purchased transportation

Forward Air

Airport-to-airport

40,519

38,294

160,065

142,705

Logistics

15,447

16,045

63,203

56,259

Other

1,989

1,752

7,241

6,681

Forward Air Solutions

Pool distribution

7,221

6,288

22,211

17,355

Total purchased transportation

65,176

62,379

252,720

223,000

Salaries, wages and employee benefits

37,597

35,315

135,006

130,651

Operating leases

7,164

7,039

27,989

27,122

Depreciation and amortization

5,081

5,259

21,021

20,993

Insurance and claims

3,177

2,658

11,309

8,798

Fuel expense

2,767

2,683

10,038

10,041

Other operating expenses

10,529

9,297

42,831

38,687

Total operating expenses

131,491

124,630

500,914

459,292

Income from operations

24,034

23,629

83,532

77,110

Other income (expense):

Interest expense

(150

)

(151

)

(391

)

(619

)

Other, net

20

16

14

74

Total other expense

(130

)

(135

)

(377

)

(545

)

Income before income taxes

23,904

23,494

83,155

76,565

Income taxes

7,944

9,045

30,487

29,366

Net income

$

15,960

$

14,449

$

52,668

$

47,199

Net income per share:

Basic

$

0.55

$

0.51

$

1.82

$

1.62

Diluted

$

0.54

$

0.50

$

1.78

$

1.60

Weighted average shares outstanding:

Basic

29,190

28,502

28,967

29,052

Diluted

29,716

28,968

29,536

29,435

Dividends per share:

$

0.10

$

0.07

$

0.34

$

0.28

Forward Air Corporation

Consolidated Balance Sheets

(In thousands)

(Unaudited)

December 31,
2012

December 31,

2011 (a)

Assets

Current assets:

Cash and cash equivalents

$

112,182

$

58,801

Accounts receivable, net

75,262

70,922

Other current assets

10,952

9,994

Total current assets

198,396

139,717

Property and equipment

239,138

223,135

Less accumulated depreciation and amortization

105,581

93,267

Net property and equipment

133,557

129,868

Goodwill and other acquired intangibles:

Goodwill

43,332

43,332

Other acquired intangibles, net of accumulated amortization

22,102

26,668

Total net goodwill and other acquired intangibles

65,434

70,000

Other assets

1,800

1,566

Total assets

$

399,187

$

341,151

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

11,168

$

12,392

Accrued expenses

16,476

20,986

Current portion of debt and capital lease obligations

276

552

Total current liabilities

27,920

33,930

Debt and capital lease obligations, less current portion

58

333

Other long-term liabilities

7,098

8,860

Deferred income taxes

12,440

11,126

Commitments and contingencies

Shareholders' equity:

Common stock

292

285

Additional paid-in capital

64,644

42,212

Retained earnings

286,735

244,405

Total shareholders' equity

351,671

286,902

Total liabilities and shareholders' equity

$

399,187

$

341,151

(a) Taken from audited financial statements, which are not presented in their entirety.

Forward Air Corporation

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three months ended

December 31,
2012

December 31,
2011

Operating activities:

Net income

$

15,960

$

14,449

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

5,081

5,259

Share-based compensation

1,500

1,514

Loss (gain) on disposal of property and equipment

59

(6

)

Provision for recovery on receivables

(27

)

(234

)

Provision for revenue adjustments

586

471

Deferred income taxes

(417

)

(931

)

Tax benefit for stock options exercised

(31

)

(515

)

Changes in operating assets and liabilities

Accounts receivable

(943

)

(1,585

)

Prepaid expenses and other current assets

298

71

Accounts payable and accrued expenses

841

3,636

Net cash provided by operating activities

22,907

22,129

Investing activities:

Proceeds from disposal of property and equipment

44

270