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Forward Air Corporation | |||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
(As Adjusted) | (As Adjusted) | ||||||||||||||
Operating revenue: | |||||||||||||||
Expedited LTL | $ | 188,507 | $ | 165,399 | $ | 551,342 | $ | 474,636 | |||||||
Truckload Premium Services | 47,942 | 51,461 | 142,982 | 148,999 | |||||||||||
Pool Distribution | 47,280 | 40,183 | 133,256 | 116,741 | |||||||||||
Intermodal | 50,545 | 44,161 | 148,275 | 110,307 | |||||||||||
Eliminations and other operations | (2,899 | ) | (2,915 | ) | (11,530 | ) | (6,474 | ) | |||||||
Operating revenue | 331,375 | 298,289 | 964,325 | 844,209 | |||||||||||
Operating expenses: | |||||||||||||||
Purchased transportation | 155,451 | 140,330 | 450,833 | 389,127 | |||||||||||
Salaries, wages and employee benefits | 76,028 | 65,334 | 217,682 | 192,279 | |||||||||||
Operating leases | 18,671 | 16,809 | 54,640 | 47,205 | |||||||||||
Depreciation and amortization | 10,295 | 10,326 | 31,346 | 30,578 | |||||||||||
Insurance and claims | 9,203 | 7,844 | 26,442 | 21,379 | |||||||||||
Fuel expense | 5,634 | 4,096 | 16,786 | 11,448 | |||||||||||
Other operating expenses | 26,214 | 26,374 | 79,612 | 71,279 | |||||||||||
Total operating expenses | 301,496 | 271,113 | 877,341 | 763,295 | |||||||||||
Income (loss) from operations: | |||||||||||||||
Expedited LTL | 23,724 | 23,189 | 71,023 | 65,164 | |||||||||||
Truckload Premium Services | 1,673 | 124 | 3,348 | 3,734 | |||||||||||
Pool Distribution | 735 | 681 | 3,695 | 3,672 | |||||||||||
Intermodal | 7,321 | 3,785 | 16,333 | 9,548 | |||||||||||
Other operations | (3,574 | ) | (603 | ) | (7,415 | ) | (1,204 | ) | |||||||
Income from operations | 29,879 | 27,176 | 86,984 | 80,914 | |||||||||||
Other expense: | |||||||||||||||
Interest expense | (472 | ) | (288 | ) | (1,327 | ) | (806 | ) | |||||||
Other, net | (1 | ) | (3 | ) | (2 | ) | (11 | ) | |||||||
Total other expense | (473 | ) | (291 | ) | (1,329 | ) | (817 | ) | |||||||
Income before income taxes | 29,406 | 26,885 | 85,655 | 80,097 | |||||||||||
Income tax expense | 7,077 | 8,557 | 21,289 | 27,522 | |||||||||||
Net income and comprehensive income | $ | 22,329 | $ | 18,328 | $ | 64,366 | $ | 52,575 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.76 | $ | 0.61 | $ | 2.18 | $ | 1.74 | |||||||
Diluted | $ | 0.76 | $ | 0.61 | $ | 2.18 | $ | 1.73 | |||||||
Dividends per share: | $ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.45 |
Expedited LTL Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 188.5 | 100.0 | % | $ | 165.4 | 100.0 | % | $ | 23.1 | 14.0 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 88.6 | 47.0 | 72.9 | 44.1 | 15.7 | 21.5 | ||||||||||||||
Salaries, wages and employee benefits | 41.6 | 22.1 | 35.7 | 21.6 | 5.9 | 16.5 | ||||||||||||||
Operating leases | 10.3 | 5.5 | 9.4 | 5.7 | 0.9 | 9.6 | ||||||||||||||
Depreciation and amortization | 5.6 | 3.0 | 5.4 | 3.3 | 0.2 | 3.7 | ||||||||||||||
Insurance and claims | 3.9 | 2.1 | 3.3 | 2.0 | 0.6 | 18.2 | ||||||||||||||
Fuel expense | 1.6 | 0.8 | 0.9 | 0.5 | 0.7 | 77.8 | ||||||||||||||
Other operating expenses | 13.2 | 7.0 | 14.6 | 8.8 | (1.4 | ) | (9.6 | ) | ||||||||||||
Total operating expenses | 164.8 | 87.4 | 142.2 | 86.0 | 22.6 | 15.9 | ||||||||||||||
Income from operations | $ | 23.7 | 12.6 | % | $ | 23.2 | 14.0 | % | $ | 0.5 | 2.2 | % |
Expedited LTL Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Business days | 63 | 63 | — | % | ||||||
Tonnage | ||||||||||
Total pounds ¹ | 636,831 | 630,753 | 1.0 | |||||||
Pounds per day ¹ | 10,108 | 10,012 | 1.0 | |||||||
Shipments | ||||||||||
Total shipments ¹ | 1,003 | 998 | 0.5 | |||||||
Shipments per day ¹ | 15.9 | 15.8 | 0.5 | |||||||
Total shipments with pickup and/or delivery ¹ | 245 | 246 | (0.5 | ) | ||||||
Revenue per hundredweight | $ | 26.47 | $ | 23.67 | 11.8 | |||||
Revenue per hundredweight, ex fuel | $ | 22.21 | $ | 21.23 | 4.6 | |||||
Revenue per shipment | $ | 168 | $ | 150 | 12.0 | |||||
Revenue per shipment, ex fuel | $ | 141 | $ | 134 | 5.2 | |||||
Weight per shipment | 635 | 632 | 0.5 | % | ||||||
¹ - In thousands |
Truckload Premium Services Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 47.9 | 100.0 | % | $ | 51.5 | 100.0 | % | $ | (3.6 | ) | (7.0 | )% | |||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 35.8 | 74.7 | 39.5 | 76.7 | (3.7 | ) | (9.4 | ) | ||||||||||||
Salaries, wages and employee benefits | 4.7 | 9.8 | 5.0 | 9.7 | (0.3 | ) | (6.0 | ) | ||||||||||||
Operating leases | 0.1 | 0.2 | 0.3 | 0.6 | (0.2 | ) | (66.7 | ) | ||||||||||||
Depreciation and amortization | 1.5 | 3.1 | 1.6 | 3.1 | (0.1 | ) | (6.3 | ) | ||||||||||||
Insurance and claims | 1.2 | 2.5 | 2.0 | 3.9 | (0.8 | ) | (40.0 | ) | ||||||||||||
Fuel expense | 0.7 | 1.5 | 0.8 | 1.6 | (0.1 | ) | (12.5 | ) | ||||||||||||
Other operating expenses | 2.2 | 4.6 | 2.2 | 4.3 | — | — | ||||||||||||||
Total operating expenses | 46.2 | 96.5 | 51.4 | 99.8 | (5.2 | ) | (10.1 | ) | ||||||||||||
Income from operations | $ | 1.7 | 3.5 | % | $ | 0.1 | 0.2 | % | $ | 1.6 | 1,600.0 | % |
Truckload Premium Services Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Total Miles ¹ | 19,197 | 24,714 | (22.3 | )% | ||||||
Empty Miles Percentage | 8.5 | % | 9.6 | % | (11.5 | ) | ||||
Tractors (avg) | 291 | 378 | (23.0 | ) | ||||||
Miles per tractor per week 2 | 2,317 | 2,823 | (17.9 | ) | ||||||
Revenue per mile | $ | 2.37 | $ | 2.01 | 17.9 | |||||
Cost per mile | $ | 1.88 | $ | 1.66 | 13.3 | % | ||||
¹ - In thousands | ||||||||||
2 - Calculated using Company driver and owner operator miles |
Pool Distribution Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 47.3 | 100.0 | % | $ | 40.2 | 100.0 | % | $ | 7.1 | 17.7 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 14.3 | 30.2 | 11.4 | 28.4 | 2.9 | 25.4 | ||||||||||||||
Salaries, wages and employee benefits | 17.5 | 37.0 | 15.3 | 38.1 | 2.2 | 14.4 | ||||||||||||||
Operating leases | 4.2 | 8.9 | 3.3 | 8.2 | 0.9 | 27.3 | ||||||||||||||
Depreciation and amortization | 1.7 | 3.6 | 1.7 | 4.2 | — | — | ||||||||||||||
Insurance and claims | 1.3 | 2.7 | 1.1 | 2.8 | 0.2 | 18.2 | ||||||||||||||
Fuel expense | 1.6 | 3.4 | 1.3 | 3.2 | 0.3 | 23.1 | ||||||||||||||
Other operating expenses | 6.0 | 12.7 | 5.4 | 13.4 | 0.6 | 11.1 | ||||||||||||||
Total operating expenses | 46.6 | 98.5 | 39.5 | 98.3 | 7.1 | 18.0 | ||||||||||||||
Income from operations | $ | 0.7 | 1.5 | % | $ | 0.7 | 1.7 | % | $ | — | — | % |
Pool Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Cartons¹ | 22,218 | 19,256 | 15.4 | % | ||||||
Revenue per Carton | $ | 2.13 | $ | 2.09 | 1.9 | % | ||||
Terminals | 28 | 28 | — | % | ||||||
¹ In thousands |
Intermodal Segment Information | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | ||||||||||||||||||||
September 30, | Percent of | September 30, | Percent of | Percent | ||||||||||||||||
2018 | Revenue | 2017 | Revenue | Change | Change | |||||||||||||||
(As Adjusted) | ||||||||||||||||||||
Operating revenue | $ | 50.5 | 100.0 | % | $ | 44.2 | 100.0 | % | $ | 6.3 | 14.3 | % | ||||||||
Operating expenses: | ||||||||||||||||||||
Purchased transportation | 19.3 | 38.2 | 19.1 | 43.2 | 0.2 | 1.0 | ||||||||||||||
Salaries, wages and employee benefits | 10.9 | 21.6 | 9.0 | 20.4 | 1.9 | 21.1 | ||||||||||||||
Operating leases | 4.0 | 7.9 | 3.8 | 8.6 | 0.2 | 5.3 | ||||||||||||||
Depreciation and amortization | 1.5 | 3.0 | 1.7 | 3.8 | (0.2 | ) | (11.8 | ) | ||||||||||||
Insurance and claims | 1.4 | 2.8 | 1.2 | 2.7 | 0.2 | 16.7 | ||||||||||||||
Fuel expense | 1.6 | 3.2 | 1.1 | 2.5 | 0.5 | 45.5 | ||||||||||||||
Other operating expenses | 4.5 | 8.9 | 4.5 | 10.2 | — | — | ||||||||||||||
Total operating expenses | 43.2 | 85.5 | 40.4 | 91.4 | 2.8 | 6.9 | ||||||||||||||
Income from operations | $ | 7.3 | 14.5 | % | $ | 3.8 | 8.6 | % | $ | 3.5 | 92.1 | % |
Intermodal Operating Statistics | ||||||||||
Three months ended | ||||||||||
September 30, | September 30, | Percent | ||||||||
2018 | 2017 | Change | ||||||||
(As Adjusted) | ||||||||||
Drayage shipments | 75,981 | 72,476 | 4.8 | % | ||||||
Drayage revenue per Shipment | $ | 574 | $ | 535 | 7.3 | % | ||||
Number of Locations | 19 | 19 | — | % |
Forward Air Corporation | |||||||
Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
September 30, 2018 | December 31, 2017 | ||||||
(As Adjusted) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 28,911 | $ | 3,893 | |||
Accounts receivable, net | 148,464 | 147,948 | |||||
Other current assets | 23,692 | 15,807 | |||||
Total current assets | 201,067 | 167,648 | |||||
Property and equipment | 409,465 | 399,235 | |||||
Less accumulated depreciation and amortization | 199,166 | 193,123 | |||||
Net property and equipment | 210,299 | 206,112 | |||||
Goodwill and other acquired intangibles: | |||||||
Goodwill | 193,625 | 191,671 | |||||
Other acquired intangibles, net of accumulated amortization | 106,227 | 111,247 | |||||
Total goodwill and other acquired intangibles, net | 299,852 | 302,918 | |||||
Other assets | 31,923 | 15,944 | |||||
Total assets | $ | 743,141 | $ | 692,622 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 35,110 | $ | 30,723 | |||
Accrued expenses | 40,073 | 35,069 | |||||
Current portion of debt and capital lease obligations | 336 | 359 | |||||
Total current liabilities | 75,519 | 66,151 | |||||
Debt and capital lease obligations, less current portion | 40,383 | 40,588 | |||||
Other long-term liabilities | 43,073 | 24,104 | |||||
Deferred income taxes | 35,756 | 29,080 | |||||
Shareholders’ equity: | |||||||
Common stock | 288 | 295 | |||||
Additional paid-in capital | 206,790 | 195,346 | |||||
Retained earnings | 341,332 | 337,058 | |||||
Total shareholders’ equity | 548,410 | 532,699 | |||||
Total liabilities and shareholders’ equity | $ | 743,141 | $ | 692,622 |
Forward Air Corporation | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
September 30, 2018 | September 30, 2017 | ||||||
(As Adjusted) | |||||||
Operating activities: | |||||||
Net income | $ | 22,329 | $ | 18,328 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 10,295 | 10,326 | |||||
Change in fair value of earn-out liability | (455 | ) | — | ||||
Share-based compensation | 2,847 | 1,939 | |||||
Loss on disposal of property and equipment | 120 | 194 | |||||
Provision for (recovery) loss on receivables | (509 | ) | 1,531 | ||||
Provision for revenue adjustments | 1,092 | 663 | |||||
Deferred income tax expense | 2,182 | (558 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | 3,345 | (12,409 | ) | ||||
Prepaid expenses and other current assets | (1,241 | ) | 2,567 | ||||
Income taxes | (1,765 | ) | (2,161 | ) | |||
Accounts payable and accrued expenses | 8,615 | 5,311 | |||||
Net cash provided by operating activities | 46,855 | 25,731 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 1,150 | 158 | |||||
Purchases of property and equipment | (16,738 | ) | (8,948 | ) | |||
Acquisition of business, net of cash acquired | (3,737 | ) | — | ||||
Other | (9 | ) | (586 | ) | |||
Net cash used in investing activities | (19,334 | ) | (9,376 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (77 | ) | (282 | ) | |||
Proceeds from senior credit facility | — | 20,000 | |||||
Proceeds from exercise of stock options | 2,570 | 750 | |||||
Payments of cash dividends | (4,385 | ) | (4,502 | ) | |||
Repurchase of common stock (repurchase program) | (16,820 | ) | (29,988 | ) | |||
Net cash used in financing activities | (18,712 | ) | (14,022 | ) | |||
Net increase in cash | 8,809 | 2,333 | |||||
Cash at beginning of period | 20,102 | 10,090 | |||||
Cash at end of period | $ | 28,911 | $ | 12,423 |
Forward Air Corporation | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Nine months ended | |||||||
September 30, 2018 | September 30, 2017 | ||||||
(As Adjusted) | |||||||
Operating activities: | |||||||
Net income | $ | 64,366 | $ | 52,575 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 31,346 | 30,578 | |||||
Change in fair value of earn-out liability | (455 | ) | — | ||||
Share-based compensation | 7,525 | 5,965 | |||||
(Gain) loss on disposal of property and equipment | (14 | ) | 701 | ||||
Provision for (recovery) loss on receivables | (52 | ) | 1,788 | ||||
Provision for revenue adjustments | 2,921 | 2,131 | |||||
Deferred income tax | 6,676 | 523 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (3,386 | ) | (22,894 | ) | |||
Prepaid expenses and other current assets | (4,880 | ) | (1,411 | ) | |||
Income taxes | (3,193 | ) | (424 | ) | |||
Accounts payable and accrued expenses | 12,991 | 8,179 | |||||
Net cash provided by operating activities | 113,845 | 77,711 | |||||
Investing activities: | |||||||
Proceeds from disposal of property and equipment | 5,989 | 1,497 | |||||
Purchases of property and equipment | (34,344 | ) | (13,610 | ) | |||
Acquisition of business, net of cash acquired | (3,737 | ) | (22,500 | ) | |||
Other | (356 | ) | (73 | ) | |||
Net cash used in investing activities | (32,448 | ) | (34,686 | ) | |||
Financing activities: | |||||||
Payments of debt and capital lease obligations | (228 | ) | (28,215 | ) | |||
Proceeds from senior credit facility | — | 55,000 | |||||
Payments on line of credit | — | (14,500 | ) | ||||
Proceeds from exercise of stock options | 3,682 | 5,642 | |||||
Payments of cash dividends | (13,213 | ) | (13,584 | ) | |||
Repurchase of common stock (repurchase program) | (44,985 | ) | (41,983 | ) | |||
Proceeds from common stock issued under employee stock purchase plan | 237 | 226 | |||||
Cash settlement of share-based awards for tax withholdings | (1,872 | ) | (1,699 | ) | |||
Net cash used in financing activities | (56,379 | ) | (39,113 | ) | |||
Net increase in cash | 25,018 | 3,912 | |||||
Cash at beginning of period | 3,893 | 8,511 | |||||
Cash at end of period | $ | 28,911 | $ | 12,423 |
Forward Air Corporation | |||||||||||||||
Reconciliation to U.S. GAAP | |||||||||||||||
(In thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
(As Adjusted) | (As Adjusted) | ||||||||||||||
Net income and comprehensive income | $ | 22,329 | $ | 18,328 | $ | 64,366 | $ | 52,575 | |||||||
Interest expense and other, net | 473 | 291 | 1,329 | 817 | |||||||||||
Taxes | 7,077 | 8,557 | 21,289 | 27,522 | |||||||||||
Depreciation and amortization | 10,295 | 10,326 | 31,346 | 30,578 | |||||||||||
EBITDA | $ | 40,174 | $ | 37,502 | $ | 118,330 | $ | 111,492 | |||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
(As Adjusted) | |||||||||||||||
Net cash provided by operating activities | $ | 46,855 | $ | 25,731 | $ | 113,845 | $ | 77,711 | |||||||
Proceeds from disposal of property and equipment | 1,150 | 158 | 5,989 | 1,497 | |||||||||||
Purchases of property and equipment | (16,738 | ) | (8,948 | ) | (34,344 | ) | (13,610 | ) | |||||||
Free cash flow | $ | 31,267 | $ | 16,941 | $ | 85,490 | $ | 65,598 |
Forward Air Corporation | |||
Additional Guidance Data | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
Three months ended | |||
Actual | September 30, 2018 | ||
Net income | $ | 22,329 | |
Income allocated to participating securities | (239 | ) | |
Numerator for diluted income per share - net income | $ | 22,090 | |
Fully diluted share count | 29,095 | ||
Diluted earnings per share | $ | 0.76 | |
Projected | Full year 2018 | ||
Projected tax rate | 25.0 | % | |
Projected capital expenditures, net | $ | 34,500 | |
Projected | Three months ended December 31, 2018 | ||
Projected period end fully diluted share count | 28,800 | ||
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