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You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in our filings with the Securities and Exchange Commission and in the press release issued yesterday. And consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to update publicly any forward-looking statement, whether as a new result of new information, future events, or otherwise.And now, I’ll turn the call over to Bruce Campbell, Chairman, President, and Chief Executive Officer. Bruce Campbell Thank you, operator and good morning to each of you and thank you for joining our second quarter 2010 earnings call. I'm going to discuss our results this morning by operating segment, beginning with Forward Air, Inc. segment, which includes our legacy airport-to-airport service offering; TLX, which is our expedited truckload brokerage service offering; and Forward Air Complete, which is our pick-up and door delivery service offering. Obviously, each of these service offerings enjoyed excellent revenue growth, achieving in aggregate a 26% year-over-year result. Equally impressive was our team's ability to control the cost side of the equation, allowing us to convert much of the incremental revenue to the profit line. It was an excellent job across all product lines by our team of professionals. While our Forward Air Solutions group produced a slight loss, adversely affected by a still sluggish retail specialty market and unusually high health care costs, we did make good strides on our strategic initiative to position the segment for future growth and profitability. As previously discussed, we discontinued conducting business with a large profitable customer, yet we are able to replace much of this loss business with good profitable business.
Along with the cleaning-up the revenue side of our business, we continued our push for even better costs controls and we feel we have made good progress so far, but have work remaining. Our – on a longer-term basis, we completed our background work on expanding our revenue verticals, which we feel is an essential building block for our future growth and year-round profitability. We will be working this new area of opportunity very hard over the coming months. I would like now to introduce Rodney Bell, our CFO for the financial results.
Rodney BellThank you, Bruce and thanks all of you for joining us this morning. Following our prepared comments, we will open the lines for your questions. Operating revenue for the second quarter was $122.1 million, an increase of 22.5% from the second quarter of 2009. In our Forward Air, Inc. business segment, airport-to-airport revenues were $105.6 million, an increase of $22.3 million or 26.8% compared to last year. This resulted from an 18.5% increase in network tonnage and a 5.7% increase in yield. The yield improvement consisted of 1.8% from line-haul processing, a 3% benefit from net fuel surcharges, along with a 0.9% positive impact from Forward Air Complete. Logistics revenues were $17.9 million, an increase of just over $5 million, which improved – which increased 41.5% compared to Q2 2009. In our Forward Air Solutions segment, revenues were $16.9 million, an increase of 1.2% compared to Q2 2009. New business wins were not enough to offset the loss of the customer that contributed to Q2 2009 revenue base. Additionally, as Bruce mentioned, specialty retail sales continued to be sluggish throughout the quarter, resulting in same-store sales being flat. Moving to expenses for the second quarter, our operations and line-haul did another outstanding job, managing load factors and network miles. In total, overall PT improved 70 basis points. Salaries and wages were up $3.9 million or 13.4%, but were down 220 basis points as a percentage of revenue. The dollar increase resulted primarily from a $2.1 million increase in the second quarter performance-based incentives and a $1.7 million increase in volume-driven variable wages. Read the rest of this transcript for free on seekingalpha.com