Reports profitable income from operations and positive operating and free cash flow

Business rebounding from April impact of COVID-19, with June continuing operations revenue and operating income above last year’s levels

GREENEVILLE, Tenn.–(BUSINESS WIRE)–Forward Air Corporation (NASDAQ:FWRD) today reported financial results for the three and six months ended June 30, 2020 as presented in the tables below on a continuing operations basis (Pool Distribution is being reported as a discontinued operation).

Tom Schmitt, Chairman, President and CEO, commenting on the Company’s second quarter results said, “I could not be more proud of our teams for stepping up in a huge way for our customers, bringing them back up from April lows in the toughest circumstances with record service levels. By June our top and bottom lines were ahead of last year on a continuing operations basis and were comparable to last year when adjusted for one-time items.”

Continuing Operations

 

Three months ended

(in thousands, except per share data)

 

June 30, 2020 1

 

June 30, 2019

 

Change

 

Percent Change

Operating revenue

 

$

281,678

 

 

$

302,887

 

 

$

(21,209

)

 

(7.0

)%

Income from operations

 

$

13,914

 

 

$

29,070

 

 

$

(15,156

)

 

(52.1

)%

Operating margin

 

4.9

%

 

9.6

%

 

 

(470

) bps

Net income

 

$

9,225

 

 

$

21,244

 

 

$

(12,019

)

 

(56.6

)%

Net income per diluted share

 

$

0.33

 

 

$

0.74

 

 

$

(0.41

)

 

(55.4

)%

Cash provided by operating activities

 

$

29,101

 

 

$

25,715

 

 

$

3,386

 

 

13.2

%

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures: 2

 

 

 

 

 

 

 

 

EBITDA

 

$

23,327

 

 

$

38,296

 

 

$

(14,969

)

 

(39.1

)%

Free cash flow

 

$

17,806

 

 

$

14,436

 

 

$

3,370

 

 

23.3

%

 

1 Results for the three months ended June 30, 2020 include several non-recurring items including a $2.1 million gain from changes in fair value on an earn-out due to the timing of expected new business wins, partially offset by $1.0 million of severance and $0.7 million in reserves for customers negatively impacted by COVID-19.

2 EBITDA and free cash flow are non-GAAP financial measures and reconciliations of these non-GAAP financial measures are provided in the below financial tables.

Michael J. Morris, CFO, commenting on the Company’s third quarter 2020 guidance for continuing operations said “We expect third quarter year-on-year revenue growth to be 1% to 5% and net income per diluted share to be between $0.40 and $0.44.”

On July 21, 2020, our Board of Directors declared a quarterly cash dividend of $0.18 per share of common stock. The dividend is payable to shareholders of record at the close of business on August 20, 2020 and is expected to be paid on September 9, 2020. This quarterly dividend is made pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.72 for the full year 2020, payable in quarterly increments of $0.18 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.

On April 23, 2020, the Board approved a strategy to divest the Pool Distribution business (“Pool”). Accordingly, the results of operations and cash flows for Pool have been presented as discontinued operations and have been excluded from continuing operations in this release for all periods presented. In addition, Pool assets and liabilities are reflected as “held-for-sale” on the Consolidated Balance Sheets in this release. For more information regarding Pool discontinued operations, please see the Company’s Form 10-Q for the quarter ended June 30, 2020 expected to be filed with the Securities and Exchange Commission (the “SEC”) on July 31, 2020.

Review of Financial Results

Forward Air will hold a conference call to discuss second quarter 2020 results on Friday, July 31, 2020 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, where investors can easily find or navigate to pertinent information about us, or by dialing (844) 767-5679, Access Code: 147112. A replay of the conference call will be available on the Investor Relations portion of the Company’s website at www.forwardaircorp.com beginning shortly after completion of the live call.

About Forward Air Corporation

Forward Air keeps your business moving forward by providing services within three business segments: Expedited Freight (provides expedited regional, inter-regional and national LTL services, including local pick-up and delivery, final mile, truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling); Intermodal (provides 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); and Pool Distribution (provides high frequency handling and distribution of time sensitive product to numerous destinations within a specific geographic region). For more information, visit our website at www.forwardaircorp.com.

Forward Air Corporation

Consolidated Statements of Comprehensive Income

(Unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30,

2020

 

June 30,

2019

 

June 30,

2020

 

June 30,

2019

 

 

 

(As Adjusted)

 

 

 

(As Adjusted)

Operating revenue:

 

 

 

 

 

 

 

Expedited Freight

$

235,658

 

 

$

253,286

 

 

$

489,287

 

 

$

478,944

 

Intermodal

46,428

 

 

50,539

 

 

98,888

 

 

104,654

 

Eliminations and other operations

(408

)

 

(938

)

 

(940

)

 

(1,750

)

Operating revenue

281,678

 

 

302,887

 

 

587,235

 

 

581,848

 

Operating expenses:

 

 

 

 

 

 

 

Purchased transportation

142,069

 

 

143,436

 

 

292,667

 

 

275,987

 

Salaries, wages and employee benefits

63,772

 

 

63,841

 

 

133,331

 

 

123,798

 

Operating leases

17,387

 

 

16,124

 

 

35,271

 

 

31,001

 

Depreciation and amortization

9,413

 

 

9,227

 

 

18,747

 

 

18,515

 

Insurance and claims

7,722

 

 

11,757

 

 

17,766

 

 

19,745

 

Fuel expense

2,519

 

 

4,467

 

 

6,532

 

 

8,582

 

Other operating expenses

24,882

 

 

24,965

 

 

53,234

 

 

51,448

 

Total operating expenses

267,764

 

 

273,817

 

 

557,548

 

 

529,076

 

Income (loss) from continuing operations:

 

 

 

 

 

 

 

Expedited Freight

11,753

 

 

28,187

 

 

26,933

 

 

49,093

 

Intermodal

4,413

 

 

5,245

 

 

8,126

 

 

11,426

 

Other operations

(2,252

)

 

(4,362

)

 

(5,372

)

 

(7,747

)

Income from continuing operations

13,914

 

 

29,070

 

 

29,687

 

 

52,772

 

Other expense:

 

 

 

 

 

 

 

Interest expense

(1,198

)

 

(581

)

 

(2,051

)

 

(1,156

)

Other, net

 

 

(1

)

 

 

 

(2

)

Total other expense

(1,198

)

 

(582

)

 

(2,051

)

 

(1,158

)

Income before income taxes

12,716

 

 

28,488

 

 

27,636

 

 

51,614

 

Income tax expense

3,491

 

 

7,244

 

 

6,995

 

 

12,683

 

Net income from continuing operations

9,225

 

 

21,244

 

 

20,641

 

 

38,931

 

(Loss) income from discontinued operations, net of tax

(6,071

)

 

1,086

 

 

(9,112

)

 

1,806

 

Net income and comprehensive income

$

3,154

 

 

$

22,330

 

 

$

11,529

 

 

$

40,737

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic net income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.33

 

 

$

0.74

 

 

$

0.72

 

 

$

1.35

 

Discontinued operations

(0.22

)

 

0.04

 

 

(0.31

)

 

0.07

 

Net income per share

$

0.11

 

 

$

0.78

 

 

$

0.41

 

 

$

1.42

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.33

 

 

$

0.74

 

 

$

0.72

 

 

$

1.35

 

Discontinued operations

(0.22

)

 

0.04

 

 

(0.32

)

 

0.06

 

Net income per share

$

0.11

 

 

$

0.78

 

 

$

0.40

 

 

$

1.41

 

Dividends per share:

$

0.18

 

 

$

0.18

 

 

$

0.36

 

 

$

0.36

 

Expedited Freight Segment Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

June 30,

 

Percent of

 

June 30,

 

Percent of

 

 

 

Percent

 

2020 1

 

Revenue

 

2019

 

Revenue

 

Change

 

Change

 

 

 

 

 

(As Adjusted)

 

 

 

 

 

 

Operating revenue:

 

 

 

 

 

 

 

 

 

 

 

Network 2

$

134.2

 

 

56.9

%

 

$

172.5

 

 

68.1

%

 

$

(38.3

)

 

(22.2

)%

Truckload

41.9

 

 

17.8

 

 

48.6

 

 

19.2

 

 

(6.7

)

 

(13.8

)

Final Mile

53.4

 

 

22.7

 

 

25.0

 

 

9.9

 

 

28.4

 

 

113.6

 

Other

6.2

 

 

2.6

 

 

7.2

 

 

2.8

 

 

(1.0

)

 

(13.9

)

Total operating revenue

235.7

 

 

100.0

 

 

253.3

 

 

100.0

 

 

(17.6

)

 

(6.9

)

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

127.5

 

 

54.1

 

 

125.8

 

 

49.7

 

 

1.7

 

 

1.4

 

Salaries, wages and employee benefits

50.5

 

 

21.4

 

 

50.9

 

 

20.1

 

 

(0.4

)

 

(0.8

)

Operating leases

13.3

 

 

5.6

 

 

12.1

 

 

4.8

 

 

1.2

 

 

9.9

 

Depreciation and amortization

6.7

 

 

2.8

 

 

7.5

 

 

3.0

 

 

(0.8

)

 

(10.7

)

Insurance and claims

5.7

 

 

2.4

 

 

6.6

 

 

2.6

 

 

(0.9

)

 

(13.6

)

Fuel expense

1.4

 

 

0.6

 

 

2.7

 

 

1.1

 

 

(1.3

)

 

(48.1

)

Other operating expenses

18.8

 

 

8.0

 

 

19.5

 

 

7.7

 

 

(0.7

)

 

(3.6

)

Total operating expenses

223.9

 

 

95.0

 

 

225.1

 

 

88.9

 

 

(1.2

)

 

(0.5

)

Income from operations

$

11.8

 

 

5.0

%

 

$

28.2

 

 

11.1

%

 

$

(16.4

)

 

(58.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

1 Includes revenues and operating expenses from the acquisition of FSA and Linn Star, which were acquired in April 2019 and January 2020, respectively. FSA results are partially included in the prior period. Linn Star results are not included in the prior period.

2 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

 

June 30,

 

June 30,

 

Percent

 

2020

 

2019

 

Change

 

 

 

(As Adjusted)

 

 

 

 

 

 

 

 

Business days

64

 

 

64

 

 

%

 

 

 

 

 

 

Tonnage 1,2

 

 

 

 

 

Total pounds

522,031

 

 

626,748

 

 

(16.7

)

Pounds per day

8,157

 

 

9,793

 

 

(16.7

)

 

 

 

 

 

 

Shipments 1,2

 

 

 

 

 

Total shipments

963

 

 

1,014

 

 

(5.0

)

Shipments per day

15.0

 

 

15.8

 

 

(5.0

)

 

 

 

 

 

 

Weight per shipment

542

 

 

618

 

 

(12.3

)

 

 

 

 

 

 

Revenue per hundredweight 3

$

26.32

 

 

$

27.39

 

 

(3.9

)

Revenue per hundredweight, ex fuel 3

$

23.09

 

 

$

22.91

 

 

0.8

 

 

 

 

 

 

 

Revenue per shipment 3

$

139

 

 

$

171

 

 

(18.7

)

Revenue per shipment, ex fuel 3

$

122

 

 

$

144

 

 

(15.3

)

 

 

 

 

 

 

Network revenue from door-to-door shipments as a percentage of network revenue 3,4

49.9

%

 

39.9

%

 

25.1

 

Network gross margin 5

50.6

%

 

55.8

%

 

(9.3

)%

 

 

 

 

 

 

1 In thousands

2 Excludes accessorial, full 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

5 Network revenue less Network purchased transportation as a percentage of Network revenue

Intermodal Segment Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

June 30,

 

Percent of

 

June 30,

 

Percent of

 

 

 

Percent

 

2020 1

 

Revenue

 

2019

 

Revenue

 

Change

 

Change

Operating revenue

$

46.4

 

 

100.0

%

 

$

50.5

 

 

100.0

%

 

$

(4.1

)

 

(8.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

14.9

 

 

32.1

 

 

18.2

 

 

36.0

 

 

(3.3

)

 

(18.1

)

Salaries, wages and employee benefits

11.7

 

 

25.2

 

 

12.4

 

 

24.6

 

 

(0.7

)

 

(5.6

)

Operating leases

4.0

 

 

8.6

 

 

4.0

 

 

7.9

 

 

 

 

 

Depreciation and amortization

2.6

 

 

5.6

 

 

1.8

 

 

3.6

 

 

0.8

 

 

44.4

 

Insurance and claims

1.8

 

 

3.9

 

 

1.7

 

 

3.4

 

 

0.1

 

 

5.9

 

Fuel expense

1.1

 

 

2.4

 

 

1.7

 

 

3.4

 

 

(0.6

)

 

(35.3

)

Other operating expenses

5.9

 

 

12.7

 

 

5.5

 

 

10.9

 

 

0.4

 

 

7.3

 

Total operating expenses

42.0

 

 

90.5

 

 

45.3

 

 

89.7

 

 

(3.3

)

 

(7.3

)

Income from operations

$

4.4

 

 

9.5

%

 

$

5.2

 

 

10.3

%

 

$

(0.8

)

 

(15.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

1 Includes revenues and operating expenses from the acquisition of OST, which was acquired in July 2019 (and is not included in the prior period).

Intermodal Operating Statistics

 

 

 

Three months ended

 

June 30,

 

June 30,

 

Percent

 

2020

 

2019

 

Change

 

 

 

 

 

 

Drayage shipments

68,974

 

 

76,074

 

 

(9.3

)%

Drayage revenue per shipment

$

556

 

 

$

571

 

 

(2.6

)

Number of locations

24

 

 

21

 

 

14.3

%

 

Forward Air Corporation

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

June 30,

2020

 

December 31,

2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

80,916

 

 

$

64,749

 

Accounts receivable, net

130,759

 

 

136,214

 

Other current assets

23,745

 

 

20,403

 

Current assets held for sale

11,871

 

 

14,952

 

Total current assets

247,291

 

 

236,318

 

 

 

 

 

Property and equipment

381,834

 

 

373,571

 

Less accumulated depreciation and amortization

187,239

 

 

180,815

 

Total property and equipment, net

194,595

 

 

192,756

 

Operating lease right-of-use assets

123,925

 

 

105,170

 

Goodwill and other acquired intangibles:

 

 

 

Goodwill

240,933

 

 

215,699

 

Other acquired intangibles, net of accumulated amortization

148,452

 

 

124,857

 

Total goodwill and other acquired intangibles, net

389,385

 

 

340,556

 

Other assets

42,710

 

 

39,374

 

Noncurrent assets held for sale

74,593

 

 

76,704

 

Total assets

$

1,072,499

 

 

$

990,878

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

27,682

 

 

$

25,411

 

Accrued expenses

48,041

 

 

44,154

 

Other current liabilities

3,784

 

 

5,318

 

Current portion of debt and finance lease obligations

1,445

 

 

1,421

 

Current portion of operating lease obligations

42,108

 

 

35,886

 

Current liabilities held for sale

23,792

 

 

24,974

 

Total current liabilities

146,852

 

 

137,164

 

 

 

 

 

Debt and finance lease obligations, less current portion

136,549

 

 

72,249

 

Operating lease obligations, less current portion

82,404

 

 

69,678

 

Other long-term liabilities

58,194

 

 

56,448

 

Deferred income taxes

45,883

 

 

41,214

 

Noncurrent liabilities held for sale

36,325

 

 

36,943

 

 

 

 

 

Shareholders’ equity:

 

 

 

Common stock

277

 

 

279

 

Additional paid-in capital

233,086

 

 

226,869

 

Retained earnings

332,929

 

 

350,034

 

Total shareholders’ equity

566,292

 

 

577,182

 

Total liabilities and shareholders’ equity

$

1,072,499

 

 

$

990,878

 

Forward Air Corporation

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Three months ended

 

June 30, 2020

 

June 30, 2019

Operating activities:

 

 

 

Net income from continuing operations

$

9,225

 

 

$

21,244

 

Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations

 

 

 

Depreciation and amortization

9,413

 

 

9,227

 

Change in fair value of earn-out liability

(2,108

)

 

 

Share-based compensation

2,429

 

 

3,045

 

Loss (gain) on disposal of property and equipment, net

75

 

 

(137

)

Provision for loss on receivables

887

 

 

2

 

Provision for revenue adjustments

745

 

 

738

 

Deferred income tax expense

3,443

 

 

2,367

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable

(61

)

 

(6,566

)

Prepaid expenses and other current assets

(493

)

 

(7,371

)

Income taxes

(1,962

)

 

(6,599

)

Accounts payable and accrued expenses

7,508

 

 

9,765

 

Net cash provided by operating activities of continuing operations

29,101

 

 

25,715

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from disposal of property and equipment

268

 

 

624

 

Purchases of property and equipment

(11,563

)

 

(11,903

)

Acquisition of business, net of cash acquired

 

 

(27,000

)

Other

 

 

6

 

Net cash used in investing activities of continuing operations

(11,295

)

 

(38,273

)

 

 

 

 

Financing activities:

 

 

 

Payments of finance lease obligations

(340

)

 

(69

)

Proceeds from senior credit facility

 

 

10,000

 

Payments on earn-out liability

(5,284

)

 

 

Proceeds from exercise of stock options

 

 

448

 

Payments of cash dividends

(5,037

)

 

(5,144

)

Repurchase of common stock (repurchase program)

 

 

(24,436

)

Proceeds from common stock issued under employee stock purchase plan

294

 

 

261

 

Cash settlement of share-based awards for tax withholdings

(614

)

 

(49

)

(Distributions to) contributions from subsidiary

(3,154

)

 

4,159

 

Net cash used in financing activities from continuing operations

(14,135

)

 

(14,830

)

Net increase (decrease) in cash of continuing operations

3,671

 

 

(27,388

)

 

 

 

 

Cash from discontinued operations:

 

 

 

Cash (used in) provided by operating activities of discontinued operations, net

(3,010

)

 

4,523

 

Cash used in investing activities of discontinued operations, net

(144

)

 

(364

)

Cash provided by (used in) financing activities of discontinued operations, net

3,154

 

 

(4,159

)

Net increase (decrease) in cash

3,671

 

 

(27,388

)

Cash at beginning of period of continuing operations

77,245

 

 

42,165

 

Cash at beginning of period of discontinued operations/held for sale

 

 

 

Net increase (decrease) in cash

3,671

 

 

(27,388

)

Less: cash at end of period of discontinued operations/held for sale

 

 

 

Cash at end of period of continuing operations

$

80,916

 

 

$

14,777

 

Forward Air Corporation

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

Six months ended

 

June 30, 2020

 

June 30, 2019

Operating activities:

 

 

 

Net income from continuing operations

$

20,641

 

 

$

38,931

 

Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations

 

 

 

Depreciation and amortization

18,747

 

 

18,515

 

Change in fair value of earn-out liability

(2,702

)

 

 

Share-based compensation

5,507

 

 

5,910

 

Loss (gain) on disposal of property and equipment, net

9

 

 

(218

)

Provision for loss on receivables

688

 

 

635

 

Provision for revenue adjustments

1,787

 

 

1,277

 

Deferred income tax expense

4,668

 

 

3,290

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable

2,979

 

 

(3,922

)

Prepaid expenses and other current assets

312

 

 

(4,842

)

Income taxes

(341

)

 

(2,182

)

Accounts payable and accrued expenses

7,634

 

 

6,876

 

Net cash provided by operating activities of continuing operations

59,929

 

 

64,270

 

 

 

 

 

Investing activities:

 

 

 

Proceeds from disposal of property and equipment

988

 

 

1,008

 

Purchases of property and equipment

(14,214

)

 

(14,214

)

Acquisition of business, net of cash acquired

(55,931

)

 

(27,000

)

Net cash used in investing activities of continuing operations

(69,157

)

 

(40,206

)

 

 

 

 

Financing activities:

 

 

 

Payments of finance lease obligations

(676

)

 

(137

)

Proceeds from senior credit facility

65,000

 

 

10,000

 

Payments on earn-out liability

(5,284

)

 

 

Proceeds from exercise of stock options

 

 

1,278

 

Payments of cash dividends

(10,087

)

 

(10,333

)

Repurchase of common stock (repurchase program)

(15,259

)

 

(38,617

)

Proceeds from common stock issued under employee stock purchase plan

294

 

 

261

 

Cash settlement of share-based awards for tax withholdings

(3,286

)

 

(2,770

)

(Distributions to) contributions from subsidiary

(5,307

)

 

5,374

 

Net cash provided by (used in) financing activities from continuing operations

25,395

 

 

(34,944

)

Net increase (decrease) in cash of continuing operations

16,167

 

 

(10,880

)

 

 

 

 

Cash from discontinued operations:

 

 

 

Cash (used in) provided by operating activities of discontinued operations, net

(4,672

)

 

7,494

 

Cash used in investing activities of discontinued operations, net

(635

)

 

(2,120

)

Cash provided by (used in) financing activities of discontinued operations, net

5,307

 

 

(5,374

)

Net increase (decrease) in cash

16,167

 

 

(10,880

)

Cash at beginning of period of continuing operations

64,749

 

 

25,657

 

Cash at beginning of period of discontinued operations/held for sale

 

 

 

Net increase (decrease) in cash

16,167

 

 

(10,880

)

Less: cash at end of period of discontinued operations/held for sale

 

 

 

Cash at end of period of continuing operations

$

80,916

$

14,777

 

Forward Air Corporation Reconciliation of U.S. GAAP and Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP (also referred to herein as “reported”). However, the Company also uses “Non-GAAP financial measures” that are derived on the basis of methodologies other than in accordance with GAAP. Specifically, 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 and in evaluating the Company’s performance.

For the three and six months ended June 30, 2020 and 2019, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”) and free cash flow. All non-GAAP financial measures are presented on a continuing operations basis.

The Company believes that EBITDA from continuing operations 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 as set out in the below tables. The Company believes that free cash flow from continuing operations is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance stockholder value.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported 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 tables below present, for the periods indicated, a reconciliation of the Company’s presented non-GAAP financial measures to the most directly comparable GAAP financial measures.

Forward Air Corporation

Reconciliation to U.S. GAAP

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

Continuing Operations

June 30,

2020

 

June 30,

2019

 

June 30,

2020

 

June 30,

2019

Net income (GAAP)

$

9,225

 

 

$

21,244

 

 

$

20,641

 

 

$

38,931

 

Interest expense

 

1,198

 

 

 

581

 

 

 

2,051

 

 

 

1,156

 

Income tax expense

 

3,491

 

 

 

7,244

 

 

 

6,995

 

 

 

12,683

 

Depreciation and amortization

 

9,413

 

 

 

9,227

 

 

 

18,747

 

 

 

18,515

 

EBITDA (Non-GAAP)

$

23,327

 

 

$

38,296

 

 

$

48,434

 

 

$

71,285

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

Continuing Operations

June 30,

2020

 

June 30,

2019

 

June 30,

2020

 

June 30,

2019

Net cash provided by operating activities (GAAP)

$

29,101

 

 

$

25,715

 

 

$

59,929

 

 

$

64,270

 

Proceeds from disposal of property and equipment

 

268

 

 

 

624

 

 

 

988

 

 

 

1,008

 

Purchases of property and equipment

 

(11,563

)

 

 

(11,903

)

 

 

(14,214

)

 

 

(14,214

)

Free cash flow (Non-GAAP)

$

17,806

 

 

$

14,436

 

 

$

46,703

 

 

$

51,064

 

The following table summarizes supplemental guidance information that management believes to be useful.

Forward Air Corporation

Additional Guidance Data

(In thousands, except per share data)

(Unaudited)

 

 

 

Three months ended

Actual – Continuing Operations

June 30, 2020

Net income from continuing operations

$

9,225

 

Income allocated to participating securities

(13

)

Numerator for diluted income per share – net income

$

9,212

 

 

 

Fully diluted share count

27,726

 

Diluted earnings per share from continuing operations

$

0.33

 

 

 

Projected

Full year 2020

Projected continuing operations and consolidated tax rate

26.5

%

 

 

Projected capital expenditures, net

$

26,000

 

 

 

Projected

December 31, 2020

Projected year-end fully diluted share count

27,500

 

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 impact of COVID-19, full year 2020 projected tax rate, share count, capital expenditures and the 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.

Contacts

Forward Air Corporation

Michael J. Morris, 404-362-8933

mmorris@forwardair.com

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