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Forward Air Corporation Reports Third Quarter 2011 Results

Dépèche transmise le 19 octobre 2011 par Business Wire

GREENEVILLE, Tenn.--(BUSINESS WIRE)--Forward Air Corporation (NASDAQ:FWRD) today reported revenue, operating income, net income and diluted earnings per share for the third quarter and nine months ended September 30, 2011.

“We are pleased to announce another quarter of outstanding operating performance. As compared to the third quarter of 2010, our nearly 12% increase in operating revenue translated to approximately 34% of incremental profit, once again demonstrating the significant leverage of our operating model.”

Operating revenue for the quarter ended September 30, 2011 increased 11.7% to $135.7 million from $121.5 million for the same quarter in 2010. Income from operations was $20.3 million for the third quarter of 2011, compared with $15.5 million in the prior-year quarter. As a percent of operating revenue, income from operations increased to 15.0% in the third quarter of 2011 from 12.8% for the same quarter last year. Net income during the third quarter of 2011 increased to $12.9 million from $8.9 million in the prior-year quarter. Income per diluted share for the third quarter of 2011 was $0.44 compared with $0.31 in the prior-year quarter.

Operating revenue for the nine months ended September 30, 2011 increased 10.7% to $388.1 million from $350.6 million for the same period in 2010. Income from operations was $53.5 million for the first nine months of 2011, compared with $35.1 million in the prior-year period. As a percent of operating revenue, income from operations increased to 13.8% for the nine months ended September 30, 2011 from 10.0% for the same period in 2010. Net income during the period was $32.8 million compared to $20.2 million in the prior-year period. Income per diluted share for the nine months ended September 30, 2011 was $1.11 compared with $0.69 in the prior-year period.

Bruce A. Campbell, Chairman, President, and CEO, commenting on the third quarter said, “We are pleased to announce another quarter of outstanding operating performance. As compared to the third quarter of 2010, our nearly 12% increase in operating revenue translated to approximately 34% of incremental profit, once again demonstrating the significant leverage of our operating model.”

Commenting further, Mr. Campbell said, “We started the quarter with some intermittent softness in network volumes. Over the course of the quarter, tonnage firmed up very nicely ending the quarter with system tonnage up 9.5% for the month of September as compared to September one year ago. We would characterize current volume trends as being moderately better than normal seasonality.”

In closing, Mr. Campbell said, “As always, I would like to express my gratitude for the ongoing efforts of our employees and independent contractors whose hard work made these results possible.”

Also commenting on the quarter, Rodney L. Bell, Senior Vice President and CFO said, “Cash for the quarter declined $8.7 million to $87.5 million. Cash flow from operations was an impressive $22.3 million in the third quarter of 2011 as compared to $19.0 million in the third quarter of 2010. Toward the end of the quarter, we took advantage of our undervalued stock price to repurchase 904,729 shares of our company stock for $24.3 million with an average share price of $26.88.”

Commenting further, Mr. Bell said, “Included in our third quarter results we booked an approximately $0.02 per share benefit related to federal income taxes. This resulted primarily from the reinstatement of an expired alternative energy tax credit related to our use of propane. The credit, covering 2010 and year to date through the third quarter 2011, was for approximately $0.6 million. We anticipate our fourth quarter 2011 tax rate to be approximately 39.5%.”

Commenting on the Company’s guidance for the fourth quarter, Mr. Bell said, “We anticipate that our fourth quarter 2011 revenues will increase in the range of 10% to 14% over the comparable 2010 period, and we expect income per diluted share to be between $0.47 and $0.51 per share. This compares to $0.41 per share in the fourth quarter of 2010.”

Review of Financial Results

Forward Air will hold a conference call to discuss third quarter 2011 results on Thursday, October 20, 2011 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800.230.1085. 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 85 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
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
 
    Three months ended     Nine months ended
September 30,     September 30, September 30,     September 30,
2011 2010 2011 2010
Operating revenue:
Forward Air
Airport-to-airport $ 92,966 $ 81,828 $ 266,606 $ 234,456
Logistics 18,409 16,774 52,909 47,789
Other 7,250 6,481 20,524 18,745
Forward Air Solutions
Pool distribution   17,124     16,439     48,104     49,639  
Total operating revenue 135,749 121,522 388,143 350,629
 
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport 36,142 32,852 104,411 94,152
Logistics 14,041 12,942 40,214 36,780
Other 1,797 1,703 4,929 4,811
Forward Air Solutions
Pool distribution   4,109     3,680     11,067     10,625  
Total purchased transportation 56,089 51,177 160,621 146,368
Salaries, wages and employee benefits 33,402 31,845 95,336 95,682
Operating leases 6,672 6,508 20,083 19,388
Depreciation and amortization 5,429 5,228 15,734 15,283
Insurance and claims 2,120 1,546 6,140 5,983
Fuel expense 2,406 1,949 7,357 6,051
Other operating expenses   9,311     7,764     29,390     26,813  
Total operating expenses   115,429     106,017     334,661     315,568  
Income from operations 20,320 15,505 53,482 35,061
 
Other income (expense):
Interest expense (131 ) (191 ) (468 ) (557 )
Other, net   10     26     57     38  
Total other expense   (121 )   (165 )   (411 )   (519 )
Income before income taxes 20,199 15,340 53,071 34,542
Income taxes   7,287     6,452     20,321     14,323  
Net income $ 12,912   $ 8,888   $ 32,750   $ 20,219  
 
Net income per share:
Basic $ 0.44   $ 0.31   $ 1.12   $ 0.70  
Diluted $ 0.44   $ 0.31   $ 1.11   $ 0.69  
Weighted average shares outstanding:
Basic 29,237 29,000 29,236 28,975
Diluted 29,552 29,129 29,591 29,101
 
Dividends per share: $ 0.07   $ 0.07   $ 0.21   $ 0.21  
 
 
Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
           
September 30, December 31,
2011 2010 (a)
Assets
Current assets:
Cash $ 87,467 $ 74,504
Accounts receivable, net 69,574 62,763
Other current assets   11,836   8,696
Total current assets 168,877 145,963
 
Property and equipment 224,278 213,704
Less accumulated depreciation and amortization   91,023   87,272
Total property and equipment, net 133,255 126,432
Goodwill and other acquired intangibles:
Goodwill 43,332 43,332
Other acquired intangibles, net   27,816   31,259
Total goodwill and other acquired intangibles 71,148 74,591
Other assets   1,533   1,810
Total assets $ 374,813 $ 348,796
 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 14,603 $ 10,687
Accrued expenses 18,035 16,280
Current portion of debt and capital lease obligations   561   638
Total current liabilities 33,199 27,605
 
Debt and capital lease obligations, less current portion 50,473 50,883
Other long-term liabilities 8,079 8,106
Deferred income taxes 12,169 6,116
 
Shareholders’ equity:
Common stock 285 290
Additional paid-in capital 12,552 24,300
Retained earnings   258,056   231,496
Total shareholders’ equity   270,893   256,086
Total liabilities and shareholders’ equity $ 374,813 $ 348,796
 

(a) Taken from audited financial statements, which are not presented in their entirety.

 
 
Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
    Three months ended
September 30,     September 30,
2011 2010
Operating activities:
Net income $ 12,912 $ 8,888
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 5,429 5,228
Share-based compensation 1,502 1,506
Gain on disposal of property and equipment (76 ) (641 )
Provision for loss (recovery) on receivables 45 (22 )
Provision for revenue adjustments 547 625
Deferred income taxes 4,140 40
Tax benefit for stock options exercised (13 ) (19 )
Changes in operating assets and liabilities
Accounts receivable (387 ) 500
Prepaid expenses and other current assets (82 ) (415 )
Accounts payable and accrued expenses   (1,746 )   3,260  
Net cash provided by operating activities 22,271 18,950
 
Investing activities:
Proceeds from disposal of property and equipment 330 1,371
Purchases of property and equipment (4,851 ) (3,150 )
Other   15     30  
Net cash used in investing activities (4,506 ) (1,749 )
 
Financing activities:
Payments of debt and capital lease obligations (160 ) (232 )
Proceeds from exercise of stock options 90 346
Payments of cash dividends (2,066 ) (2,031 )
Repurchase of common stock (24,294 ) --
Tax benefit for stock options exercised   13     19  
Net cash used in financing activities   (26,417 )   (1,898 )
Net (decrease) increase in cash (8,652 ) 15,303
Cash at beginning of period   96,119     47,916  
Cash at end of period $ 87,467   $ 63,219  
 
 
Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
   

Nine months ended

September 30,     September 30,
2011 2010
Operating activities:
Net income $ 32,750 $ 20,219
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 15,734 15,283
Share-based compensation 4,457 4,887
Gain on disposal of property and equipment (76 ) (648 )
Provision for loss on receivables 17 202
Provision for revenue adjustments 1,480 1,462
Deferred income taxes 6,079 (1,624 )
Tax benefit for stock options exercised (232 ) (28 )
Changes in operating assets and

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