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

Stocks in this article: FWRD

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
Purchases of property and equipment (854 ) (924 )
Other 4   (38 )
Net cash used in investing activities (806 ) (692 )
 
Financing activities:
Payments of debt and capital lease obligations (140 ) (149 )
Payments on line of credit (50,000 )
Proceeds from exercise of stock options 3,225
Payments of cash dividends (2,938 ) (2,007 )
Repurchase of common stock (repurchase program) (1,807 )
Common stock issued under employee stock purchase plan 140 120
Tax benefit for stock options exercised 31   515  
Net cash used in financing activities (2,907 ) (50,103 )
Net increase (decrease) in cash 19,194 (28,666 )
Cash at beginning of period 92,988   87,467  
Cash at end of period $ 112,182   $ 58,801  
 
 
Forward Air Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
    Year ended

December 31, 2012

   

December 31, 2011

Operating activities:
Net income $ 52,668 $ 47,199
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 21,021 20,993
Share-based compensation 6,050 5,971
Loss (gain) on disposal of property and equipment 318 (82 )
Provision for loss (recovery) on receivables 199 (217 )
Provision for revenue adjustments 2,003 1,951
Deferred income taxes 2,043 5,148
Tax benefit for stock options exercised (385 ) (747 )
Changes in operating assets and liabilities
Accounts receivable (6,542 ) (9,893 )
Prepaid expenses and other current assets (1,331 ) (1,757 )
Accounts payable and accrued expenses (7,458 ) 8,393  
Net cash provided by operating activities 68,586 76,959
 
Investing activities:
Proceeds from disposal of property and equipment 911 1,267
Purchases of property and equipment (21,353 ) (21,216 )
Other (263 ) 278  
Net cash used in investing activities (20,705 ) (19,671 )
 
Financing activities:
Payments of debt and capital lease obligations (551 ) (637 )
Payments on line of credit (50,000 )
Proceeds from exercise of stock options 15,740 10,946
Payments of cash dividends (9,947 ) (8,194 )
Repurchase of common stock (repurchase program) (26,101 )
Common stock issued under employee stock purchase plan 259 248
Cash settlement of share-based awards for minimum tax withholdings (386 )
Tax benefit for stock options exercised 385   747  
Net cash provided by (used in) financing activities 5,500   (72,991 )
Net increase (decrease) in cash 53,381 (15,703 )
Cash at beginning of year 58,801   74,504  
Cash at end of year $ 112,182   $ 58,801  
 
 
Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
   
Three months ended

December 31, 2012

   

Percent of

   

December 31, 2011

    Percent of         Percent
Revenue Revenue Change Change
Operating revenue
Forward Air $ 128.4 82.6 % $ 123.9 83.6 % $ 4.5 3.6 %
FASI 27.9 17.9 24.8 16.7 3.1 12.5
Intercompany eliminations (0.8 ) (0.5 ) (0.5 ) (0.3 ) (0.3 ) 60.0  
Total 155.5   100.0   148.2   100.0   7.3   4.9  
 
Purchased transportation
Forward Air 58.1 45.3 56.3 45.4 1.8 3.2
FASI 7.8 27.9 6.5 26.2 1.3 20.0
Intercompany eliminations (0.7 ) 87.5   (0.4 ) 80.0   (0.3 ) 75.0  
Total 65.2   41.9   62.4   42.1   2.8   4.5  
 
Salaries, wages and employee benefits
Forward Air 27.7 21.6 26.2 21.1 1.5 5.7
FASI 9.9   35.5   9.1   36.7   0.8   8.8  
Total 37.6   24.2   35.3   23.8   2.3   6.5  
 
Operating leases
Forward Air 5.2 4.1 4.9 4.0 0.3 6.1
FASI 2.0   7.2   2.1   8.5   (0.1 ) (4.8 )
Total 7.2   4.6   7.0   4.7   0.2   2.9  
 
Depreciation and amortization
Forward Air 3.9 3.0 4.2 3.4 (0.3 ) (7.1 )
FASI 1.2   4.3   1.1   4.4   0.1   9.1  
Total 5.1   3.3   5.3   3.6   (0.2 ) (3.8 )
 
Insurance and claims
Forward Air 2.5 1.9 2.3 1.9 0.2 8.7
FASI 0.7   2.5   0.3   1.2   0.4   133.3  
Total 3.2   2.1   2.6   1.8   0.6   23.1  
 
Fuel expense
Forward Air 1.0 0.8 1.1 0.9 (0.1 ) (9.1 )
FASI 1.7   6.1   1.6   6.4   0.1   6.3  
Total 2.7   1.7   2.7   1.8      
 
Other operating expenses
Forward Air 8.4 6.5 7.7 6.2 0.7 9.1
FASI 2.2 7.9 1.7 6.9 0.5 29.4
Intercompany eliminations (0.1 ) 12.5   (0.1 ) 20.0      
Total 10.5   6.8   9.3   6.3   1.2   12.9  
 
Income from operations
Forward Air 21.6 16.8 21.2 17.1 0.4 1.9
FASI 2.4   8.6   2.4   9.7      
Total $ 24.0   15.4 % $ 23.6   15.9 % $ 0.4   1.7 %
 
 
Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
   
Year ended

December 31, 2012

    Percent of    

December 31, 2011

    Percent of         Percent
Revenue Revenue Change Change
Operating revenue
Forward Air $ 501.7 85.9 % $ 464.5 86.6 % $ 37.2 8.0 %
FASI 85.0 14.5 73.2 13.6 11.8 16.1
Intercompany eliminations (2.3 ) (0.4 ) (1.3 ) (0.2 ) (1.0 ) 76.9  
Total 584.4   100.0   536.4   100.0   48.0   8.9  
 
Purchased transportation
Forward Air 231.4 46.1 206.0 44.4 25.4 12.3
FASI 23.3 27.4 18.2 24.9 5.1 28.0
Intercompany eliminations (2.0 ) 87.0   (1.2 ) 92.3   (0.8 ) 66.7  
Total 252.7   43.3   223.0   41.6   29.7   13.3  
 
Salaries, wages and employee benefits
Forward Air 103.1 20.6 101.3 21.8 1.8 1.8
FASI 31.9   37.5   29.4   40.2   2.5   8.5  
Total 135.0   23.1   130.7   24.4   4.3   3.3  
 
Operating leases
Forward Air 20.4 4.1 19.7 4.2 0.7 3.6
FASI 7.6   9.0   7.4   10.1   0.2   2.7  
Total 28.0   4.8   27.1   5.0   0.9   3.3  
 
Depreciation and amortization
Forward Air 16.4 3.3 16.8 3.6 (0.4 ) (2.4 )
FASI 4.7   5.5   4.2   5.7   0.5   11.9  
Total 21.1   3.6   21.0   3.9   0.1   0.5  
 
Insurance and claims
Forward Air 8.9 1.8 7.2 1.6 1.7 23.6
FASI 2.4   2.8   1.6   2.2   0.8   50.0  
Total 11.3   1.9   8.8   1.6   2.5   28.4  
 
Fuel expense
Forward Air 4.2 0.8 4.4 0.9 (0.2 ) (4.5 )
FASI 5.8   6.8   5.6   7.6   0.2   3.6  
Total 10.0   1.7   10.0   1.9      
 
Other operating expenses
Forward Air 35.8 7.1 32.6 7.0 3.2 9.8
FASI 7.3 8.6 6.2 8.5 1.1 17.7
Intercompany eliminations (0.3 ) 13.0   (0.1 ) 7.7   (0.2 ) 200.0  
Total 42.8   7.3   38.7   7.2   4.1   10.6  
 
Income from operations
Forward Air 81.5 16.2 76.5 16.5 5.0 6.5
FASI 2.0   2.4   0.6   0.8   1.4   233.3  
Total $ 83.5   14.3 % $ 77.1   14.4 % $ 6.4   8.3 %
 
 
Forward Air Corporation
Forward Air Inc. Operating Statistics
           
Three months ended
December 31, December 31, Percent
2012 2011 Change
 
Operating ratio 83.2 % 82.9 % 0.4 %
 
Business days 64.0 63.0 1.6
Business weeks 12.8 12.6 1.6
 
 
Airport-to-airport:
Tonnage
Total pounds ¹ 456,007 458,773 (0.6 )
Average weekly pounds ¹ 35,626 36,411 (2.2 )
 
Linehaul shipments
Total linehaul 727,274 649,152 12.0
Average weekly 56,818 51,520 10.3
 
Forward Air Complete shipments 135,680 104,143 30.3
As a percentage of linehaul shipments 18.7 % 16.0 % 16.9
 
Average linehaul shipment size 627 707 (11.3 )
 
Revenue per pound ²
Linehaul yield $ 17.41 $ 16.83 2.8
Fuel surcharge impact 1.95 1.67 1.3
Forward Air Complete impact 2.74   2.25   2.4  
Total airport-to-airport yield $ 22.10 $ 20.75 6.5
 
 
Logistics:
Miles
Owner operator ¹ 8,501 8,472 0.3
Third party ¹ 4,152   4,093   1.4  
Total Miles 12,653 12,565 0.7
 
Revenue per mile $ 1.65 $ 1.71 (3.5 )
 
Cost per mile $ 1.22 $ 1.28 (4.7 )%
 
 
¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.
 
 
Forward Air Corporation
Forward Air Inc. Operating Statistics
           
Year ended
December 31, December 31, Percent
2012 2011 Change
 
Operating ratio 83.8 % 83.5 % 0.4 %
 
Business days 255.0 255.0
Business weeks 51.0 51.0
 
 
Airport-to-airport:
Tonnage
Total pounds ¹ 1,778,397 1,735,409 2.5
Average weekly pounds ¹ 34,871 34,028 2.5
 
Linehaul shipments
Total linehaul 2,791,597 2,419,350 15.4
Average weekly 54,737 47,438 15.4
 
Forward Air Complete shipments 645,207 374,116 72.5
As a percentage of linehaul shipments 23.1 % 15.5 % 49.0
 
Average linehaul shipment size 637 717 (11.2 )
 
Revenue per pound ²
Linehaul yield $ 17.13 $ 16.80 1.6
Fuel surcharge impact 1.90 1.80 0.5
Forward Air Complete impact 2.97   2.27   3.3  
Total airport-to-airport yield $ 22.00 $ 20.87 5.4
 
 
Logistics:
Miles
Owner operator ¹ 35,091 30,885 13.6
Third party ¹ 16,162   13,798   17.1  
Total Miles 51,253 44,683 14.7
 
Revenue per mile $ 1.64 $ 1.67 (1.8 )
 
Cost per mile $ 1.24 $ 1.26 (1.6 )%
 
 
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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