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press release

April 27, 2022, 4:06 p.m. EDT

Forward Air Corporation Reports First Quarter 2022 Results

All-time record quarterly reported revenue, income from operations and net income per diluted shareGuides record second quarter revenue and net income per diluted share

GREENEVILLE, Tenn., (BUSINESS WIRE) -- Forward Air Corporation /zigman2/quotes/207526946/composite FWRD -1.70% (the “Company”, “we”, “our”, or “us”) today reported financial results for the three months ended March 31, 2022 as presented in the tables below on a continuing operations basis.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220427006050/en/

Tom Schmitt, Chairman, President and CEO, commenting on first quarter results from continuing operations said, “Strong financial performance resulted in all-time quarterly records set for our first quarter reported revenue, net income and net income per diluted share. Our commitment to precision execution combined with a positive economy drove strong demand for our services. Higher quality freight in our network contributed to a record revenue per shipment for the first quarter for our less-than-truckload line of business. First quarter revenue growth of 29% came in above the high end of our guidance range of 18% to 22% and our reported net income per diluted share of $1.57 exceeded the high end of our $1.15 to $1.19 guidance range.”

Mr. Schmitt continued, “In the first weeks of the second quarter, we have seen continued strength, and believe we will see similar strong performance in the second quarter. Momentum is expected to continue as more and more cruise lines, conferences and trade shows come back. At this point, we are optimistic that we can achieve our previously announced 2023 net income per diluted share of $6.30 in 2022, and are now targeting $6.70 net income per diluted share in 2023 without any major acquisitions.”

In closing, Mr. Schmitt said, “In the first quarter, we achieved unparalleled reported revenue, income from operations and net income per diluted share quarterly financial results. I appreciate the outstanding efforts of our teammates and independent contractors as we could not have reached this monumental achievement without their hard work and valuable contributions.”

Regarding the Company’s second quarter 2022 continuing operations guidance, Rebecca J. Garbrick, CFO, said, “We expect our year-over-year revenue growth will be 18% to 22% and net income per diluted share to be between $1.59 to $1.63, compared to reported net income per diluted share of $1.11 and adjusted net income per diluted share of $1.10 in the second quarter of 2021.”

Continuing Operations   Three Months Ended
(in thousands, except per share data)   March 31, 2022   March 31, 2021   Change   Percent Change
Operating revenue   $ 466,961     $ 362,202     $ 104,759   28.9 %
Income from operations   $ 57,351     $ 22,724     $ 34,627   152.4 %
Operating margin     12.3 %     6.3 %   600 bps
Net income   $ 42,686     $ 16,714     $ 25,972   155.4 %
Net income per diluted share   $ 1.57     $ 0.60     $ 0.97   161.7 %
Cash provided by operating activities   $ 62,486       16,913     $ 45,573   269.5 %
                 
Non-GAAP Financial Measures: 1                
Adjusted income from operations   $ 57,351     $ 29,679     $ 27,672   93.2 %
Adjusted net income   $ 42,686     $ 22,104     $ 20,582   93.1 %
Adjusted net income per diluted share   $ 1.57     $ 0.80     $ 0.77   96.3 %
EBITDA   $ 68,481     $ 31,961     $ 36,520   114.3 %
Free cash flow   $ 53,089     $ 14,883     $ 38,206   256.7 %
                 
[1] Reconciliation of these non-GAAP financial measures are provided below the financial tables.

On April 25, 2022, our Board of Directors declared a quarterly cash dividend of $0.24 per share of common stock. The dividend is payable to shareholders of record at the close of business on May 26, 2022 and is expected to be paid on June 14, 2022. This quarterly dividend is made pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.96 for the full year 2022, payable in quarterly increments of $0.24 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 and position.

The Board approved a strategy to divest the Pool Distribution business (“Pool”) on April 23, 2020, and the sale of Pool was completed on February 12, 2021. Accordingly, the results of operations and cash flows for Pool have been presented as a discontinued operation and have been excluded from continuing operations in this release for all periods presented.

Review of Financial Results

Forward Air will hold a conference call to discuss first quarter 2022 results on Thursday, April 28, 2022 at 9:00 a.m. EDT. The Company’s conference call will be available online on the Investor Relations portion of the Company’s website at www.forwardaircorp.com , or by dialing (844) 721-7237, Access Code: 7291478.

A replay of the conference call will be available on the Investor Relations portion of the Company’s website at www.forwardaircorp.com , which we use as a primary mechanism to communicate with our investors. Investors are urged to monitor the Investors Relations portion of the Company’s website to easily find or navigate to current and pertinent information about us.

About Forward Air Corporation

Forward Air is a leading asset-light freight and logistics company that provides services across the United States and Canada. We provide expedited less-than-truckload (“LTL”) services, including local pick-up and delivery, shipment consolidation/deconsolidation, warehousing, and customs brokerage by utilizing a comprehensive national network of terminals. In addition, we offer final mile services, including delivery of heavy-bulky freight, truckload brokerage services, including dedicated fleet services; and intermodal, first-and last-mile, high-value drayage services, both to and from seaports and railheads, dedicated contract and Container Freight Station warehouse and handling services. For more information, visit our website at www.forwardaircorp.com .

Forward Air Corporation
Condensed Consolidated Statements of Comprehensive Income
(Unaudited, in thousands, except per share data)
       
  Three Months Ended
  March 31,   March 31,
Operating revenue:      
Expedited Freight $ 376,591     $ 304,186  
Intermodal   90,440       58,514  
Eliminations and other operations   (70 )     (498 )
Operating revenues   466,961       362,202  
Operating expenses:      
Purchased transportation   224,832       184,608  
Salaries, wages and employee benefits   86,081       74,897  
Operating leases   22,673       19,167  
Depreciation and amortization   11,130       9,237  
Insurance and claims   11,968       9,741  
Fuel expense   5,865       3,702  
Other operating expenses   47,061       38,126  
Total operating expenses   409,610       339,478  
Income (loss) from continuing operations:      
Expedited Freight   47,680       24,530  
Intermodal   11,146       4,509  
Other Operations   (1,475 )     (6,315 )
Income from continuing operations   57,351       22,724  
Other expense:      
Interest expense   (784 )     (1,165 )
Total other expense   (784 )     (1,165 )
Income before income taxes   56,567       21,559  
Income tax expense   13,881       4,845  
Net income from continuing operations   42,686       16,714  
Loss from discontinued operation, net of tax         (5,533 )
Net income and comprehensive income $ 42,686     $ 11,181  
       
Net income per share:      
Basic net income (loss) per share      
Continuing operations $ 1.57     $ 0.61  
Discontinued operation         (0.20 )
Net income per basic share [1] $ 1.57     $ 0.40  
       
Diluted net income (loss) per share      
Continuing operations $ 1.57     $ 0.60  
Discontinued operation         (0.20 )
Net income per diluted share $ 1.57     $ 0.40  
Dividends per share $ 0.24     $ 0.21  
       
[1] Rounding may impact summation of amounts.      
Expedited Freight Segment Information
(In thousands)
(Unaudited)
                       
  Three Months Ended
  March 31,   Percent of   March 31,   Percent of   Change   Percent
Operating revenue:                      
Network [1] $ 243,414   64.6 %   $ 178,627   58.7 %   $ 64,787   36.3 %
Truckload   55,908   14.8       52,380   17.2     $ 3,528   6.7  
Final Mile   65,758   17.5       62,256   20.5     $ 3,502   5.6  
Other   11,511   3.1       10,923   3.6     $ 588   5.4  
Total operating revenue   376,591   100.0       304,186   100.0     $ 72,405   23.8  
                       
Operating expenses:                      
Purchased transportation   200,034   53.1       164,364   54.0     $ 35,670   21.7  
Salaries, wages and employee benefits   68,220   18.1       61,687   20.3     $ 6,533   10.6  
Operating leases   15,731   4.2       14,218   4.7     $ 1,513   10.6  
Depreciation and amortization   7,481   2.0       6,798   2.2     $ 683   10.0  
Insurance and claims   8,751   2.3       7,611   2.5     $ 1,140   15.0  
Fuel expense   2,650   0.7       1,993   0.7     $ 657   33.0  
Other operating expenses   26,044   6.9       22,985   7.6     $ 3,059   13.3  
Total operating expenses   328,911   87.3       279,656   91.9     $ 49,255   17.6  
Income from operations $ 47,680   12.7 %   $ 24,530   8.1 %   $ 23,150   94.4 %
                       
[1] Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.
Expedited Freight Operating Statistics
   
  Three Months Ended
  March 31,   March 31,   Percent Change
           
Business days   64       63     1.6 %
           
Tonnage [1,2]          
Total pounds   717,611       651,339     10.2  
Pounds per day   11,213       10,339     8.5  
           
Shipments [1,2]          
Total shipments   892       1,026     (13.1 )
Shipments per day   13.9       16.3     (14.7 )
           
Weight per shipment   804       635     26.6  
           
Revenue per hundredweight [3] $ 32.67     $ 27.56     18.5  
Revenue per hundredweight, ex fuel [3] $ 26.74     $ 23.86     12.1  
           
Revenue per shipment [3] $ 265.23     $ 174.30     52.2  
Revenue per shipment, ex fuel [3] $ 217.53     $ 150.82     44.2  
           
Network revenue from door-to-door shipments as a percentage of network revenue [3,4]   45.2 %     48.4 %   (6.6 )
           
[1] In thousands
[2] Excludes accessorial, Truckload and Final Mile products
[3] Includes intercompany revenue between the Network and Truckload revenue streams
[4] Door-to-door shipments include all shipments with a pickup and/or delivery
Intermodal Segment Information
(In thousands)
(Unaudited)
                       
  Three Months Ended
  March 31,   Percent of   March 31,   Percent of   Change   Percent
Operating revenue $ 90,440   100.0 %   58,514   100.0 %   31,926     54.6 %
                       
Operating expenses:                      
Purchased transportation   24,868   27.5     20,603   35.2     4,265     20.7  
Salaries, wages and employee benefits   17,935   19.8     14,063   24.0     3,872     27.5  
Operating leases   6,941   7.7     4,837   8.3     2,104     43.5  
Depreciation and amortization   3,610   4.0     2,436   4.2     1,174     48.2  
Insurance and claims   2,060   2.3     2,402   4.1     (342 )   (14.2 )
Fuel expense   3,215   3.6     1,710   2.9     1,505     88.0  
Other operating expenses   20,665   22.8     7,954   13.6     12,711     159.8  
Total operating expenses   79,294   87.7     54,005   92.3     25,289     46.8  
Income from operations   11,146   12.3 %   4,509   7.7 %   6,637     147.2 %
                       
Intermodal Operating Statistics
   
  Three Months Ended
  March 31,   March 31,   Percent Change
           
Drayage shipments 88,312   89,909   (1.8 ) %
Drayage revenue per shipment 890   553   60.9 %
Number of locations 29   27   7.4 %
 
Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
  March 31,   December 31,
Assets      
Current assets:      
Cash and cash equivalents $ 61,630   $ 37,316
Accounts receivable, net   236,666     208,085
Other receivables   4,488     8,097
Other current assets   22,468     29,309
Total current assets   325,252     282,807
       
Property and equipment, net   224,060     219,095
Operating lease right-of-use assets   153,337     148,198
Goodwill   265,639     266,752
Other acquired intangibles, net   150,638     154,717
Other assets   47,880     46,254
Total assets $ 1,166,806   $ 1,117,823
       
Liabilities and Shareholders’ Equity      
Current liabilities:      
Accounts payable $ 54,430   $ 44,837
Accrued expenses   66,467     61,621
Other current liabilities   12,479     4,614
Current portion of debt and finance lease obligations   6,069     6,088
Current portion of operating lease liabilities   48,499     47,532
Total current liabilities   187,944     164,692
       
Finance lease obligations, less current portion   8,767     9,571
Long-term debt, less current portion and debt issuance costs   155,125     155,466
Operating lease liabilities, less current portion   105,773     101,409
Other long-term liabilities   52,376     49,624
Deferred income taxes   45,050     43,407
       
Shareholders’ equity:      
       
Preferred stock      
Common stock   269     270
Additional paid-in capital   261,444     258,474
Retained earnings   350,058     334,910
Total shareholders’ equity   611,771     593,654
Total liabilities and shareholders’ equity $ 1,166,806   $ 1,117,823
 
Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
  Three Months Ended
  March 31,   March 31,
Operating activities:      
Net income from continuing operations $ 42,686     $ 16,714  
Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations      
Depreciation and amortization   11,130       9,237  
Change in fair value of earn-out liability   (294 )     (48 )
Share-based compensation expense   2,761       2,597  
Provision for revenue adjustments   1,304       1,777  
Deferred income tax expense (benefit)   1,643       (505 )
Other   132       92  
Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:      
Accounts receivable   (30,278 )     (28,023 )
Other receivables   3,609       (13,339 )
Other current and noncurrent assets   13,818       7,085  
Accounts payable and accrued expenses   15,975       21,326  
Net cash provided by operating activities of continuing operations   62,486       16,913  
       
Investing activities:      
Proceeds from sale of property and equipment   511       665  
Purchases of property and equipment   (9,908 )     (2,695 )
Purchases of a business, net of cash acquired         (15,000 )
Net cash used in investing activities of continuing operations   (9,397 )     (17,030 )
       
Financing activities:      
Repayments of finance lease obligations   (1,070 )     (467 )
Payments on credit facility   (375 )      
Proceeds from issuance of common stock upon stock option exercises   206       2,147  
Payments of dividends to shareholders   (6,502 )     (5,797 )
Repurchases and retirement of common stock   (17,780 )     (9,998 )
Payment of minimum tax withholdings on share-based awards   (3,254 )     (2,744 )
Contributions from subsidiary held for sale         1,118  
Net cash used in financing activities from continuing operations   (28,775 )     (15,741 )
Net increase (decrease) in cash and cash equivalents of continuing operations   24,314       (15,858 )
       
Cash from discontinued operation:      
Net cash used in operating activities of discontinued operation         (6,902 )
Net cash provided by investing activities of discontinued operation         8,020  
Net cash used in financing activities of discontinued operation         (1,118 )
Net increase (decrease) in cash and cash equivalents   24,314       (15,858 )
Cash and cash equivalents at beginning of period of continuing operations   37,316       40,254  
Cash at beginning of period of discontinued operation          
Net increase (decrease) in cash and cash equivalents   24,314       (15,858 )
Less: cash at end of period of discontinued operation          
Cash and cash equivalents at end of period of continuing operations $ 61,630     $ 24,396  
       

Forward Air Corporation Reconciliation of Non-GAAP Financial Measures

In this press release, the Company uses non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with GAAP. The Company believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions as well as evaluating the Company’s performance.

For the three months ended March 31, 2022 and 2021, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), free cash flow, and adjusted income from continuing operations, adjusted net income, and adjusted net income per diluted share. All non-GAAP financial measures are presented on a continuing operations basis.

The Company believes that EBITDA improves comparability from period to period by removing the impact of its capital structure (interest and financing expenses), asset base (depreciation and amortization) and tax impacts. The Company believes that free cash flow is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance shareholder value. The Company believes providing adjusted income from operations, net income and net income per share allows investors to compare Company performance consistently over various periods without regard to the impact of unusual, nonrecurring or nonoperational items.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s financial results prepared in accordance with GAAP. Non-GAAP financial information does not represent a comprehensive basis of accounting. As required by the Securities and Exchange Act of 1933 and the rules and regulations promulgated thereunder, the Company has included, for the periods indicated, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure.

The following is a reconciliation of net income to EBITDA for the three months ended March 31, 2022 and 2021 (in thousands):

    Three Months Ended
Continuing Operations   March 31, 2022   March 31, 2021
Net income   $ 42,686   $ 16,714
Interest expense     784     1,165
Income tax expense     13,881     4,845
Depreciation and amortization     11,130     9,237
EBITDA   $ 68,481   $ 31,961
         

The following is a reconciliation of net cash provided by operating activities to free cash flow for the three months ended March 31, 2022 and 2021 (in thousands):

    Three Months Ended
Continuing Operations   March 31, 2022   March 31, 2021
Net cash provided by operating activities   $ 62,486     $ 16,913  
Proceeds from sale of property and equipment     511       665  
Purchases of property and equipment     (9,908 )     (2,695 )
Free cash flow   $ 53,089     $ 14,883  
 

The following is a reconciliation of reported income from operations, net income, and net income per diluted share to adjusted income from operations, net income, and net income per diluted share for the three months ended March 31, 2022 and 2021 (in thousands, except net income per diluted share):

    Three Months Ended March 31, 2022   Three Months Ended March 31, 2021
Continuing Operations   Income From   Net   Net Income   Income From   Net   Net Income
As Reported   $ 57,351   $ 42,686   $ 1.57   $ 22,724   $ 16,714   $ 0.60
Professional fees for cybersecurity and shareholder engagement activities                 6,955     5,390     0.20
As Adjusted   $ 57,351   $ 42,686   $ 1.57   $ 29,679   $ 22,104   $ 0.80
                         
[1 ] Net income and net income per diluted share amounts are after tax

The following is a reconciliation of reported net income per diluted share to adjusted net income per diluted share for the three months ended June 30, 2021:

Continuing Operations   Net Income Per Diluted
As reported   $ 1.11  
Change in the fair value of the earn-out liability     (0.01 )
As adjusted   $ 1.10  
[1 ] Net income per diluted share is after tax.
 

The following information is provided to supplement this press release.

Actual - Continuing Operations   Three Months Ended
Net income from continuing operations     42,686  
Income allocated to participating securities     (248 )
Numerator for diluted net income per share - net income   $ 42,438  
     
Weighted-average common shares and common share equivalent outstanding - diluted     27,100  
Diluted net income per share   $ 1.57  
     
Projected   Full year 2022
Projected tax rate - continuing operations     25.9 %
     
Projected purchases of property and equipment, net of proceeds from sale of property and equipment   $ 40,000  
     
Projected   December 31, 2022
Projected weighted-average common shares and common share equivalent outstanding - diluted     26,900  

Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements included in this press release relate to expected second quarter 2022 revenue, revenue growth, net income per diluted share, adjusted net income per diluted share and volume, expectations regarding continued momentum in our business into 2022 and 2023, expectations regarding expansion of operating margins, and the future of declaration of dividends.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these 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, changes in fuel prices and/or fuel taxes, a decrease in demand for transportation services, pricing pressure, changes in freight volume, the COVID-19 pandemic, our ability to manage our growth and ability to grow, in part, through acquisitions, while being able to successfully integrate such acquisitions, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party carriers needed to serve our customers transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, loss of a major customer, increasing competition,, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2021.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220427006050/en/

SOURCE: Forward Air Corporation

Forward Air Corporation
Brandon Hammer, 423-636-7173
bhammer@forwardair.com

COMTEX_406345752/2456/2022-04-27T16:05:37

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/zigman2/quotes/207526946/composite
US : U.S.: Nasdaq
$ 90.26
-1.56 -1.70%
Volume: 191,734
Sept. 30, 2022 4:00p
P/E Ratio
15.17
Dividend Yield
1.06%
Market Cap
$2.47 billion
Rev. per Employee
$461,396
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