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Forward Air Corporation Reports First Quarter 2009 Results

Dépèche transmise le 20 avril 2009 par Business Wire

GREENEVILLE, Tenn.--(BUSINESS WIRE)--Forward Air Corporation (NASDAQ:FWRD) today reported results for the first quarter ended March 31, 2009.

Operating revenue for the quarter ended March 31, 2009 decreased 10.5% to $96.6 million from $107.9 million for the same quarter in 2008. Results from operations for the quarter, which includes a non-cash, pre-tax charge of $7.2 million primarily for goodwill impairment related to the Company’s Forward Air Solutions segment, was a loss of $5.0 million, compared with income from operations of $16.7 million in the prior-year quarter. Including the impact of the goodwill impairment, the Company’s net loss for the quarter ended March 31, 2009, was $3.1 million, compared with net income of $10.0 million in the prior-year quarter. Net loss per share for the first quarter of 2009 was $0.11 compared with net income per diluted share of $0.35 in the prior-year quarter.

Income from operations, adjusted to exclude the $7.2 million non-cash, pre-tax impairment charge, decreased to $2.1 million for the first quarter of 2009 from $16.7 million for the first quarter of 2008. Adjusted net income declined to $1.2 million during the first quarter of 2009 from $10.0 million in the prior-year quarter. Similarly, adjusted earnings per diluted share for the first quarter of 2009 declined to $0.04 compared with $0.35 for the first quarter of 2008.

A tabular reconciliation detailing the adjustments made to arrive at the adjusted financial results set forth above from financial results determined in accordance with United States generally accepted accounting principles is contained in the financial summary statements attached to this press release.

Bruce A. Campbell, Chairman, President, and CEO, said “As previously discussed in our April 9, 2009 first quarter update, our revenue and profitability continue to be negatively impacted by the severe effects of the current economic recession. The unprecedented tonnage decline along with increased downward pressure on our yield driven by lower fuel surcharges as well as a highly competitive pricing environment has created extreme pressure on our airport-to-airport model. We will continue to be vigilant in our cost control efforts. However, we will not make cuts for the benefit of our short term results that could negatively impair our performance when the economy improves.”

Commenting further, Mr. Campbell said, “As we anticipated, our Forward Air Solutions pool distribution business segment was required to record an impairment charge in the quarter. It is important to note that this impairment charge was driven primarily by the current economic environment and related market valuations. While first quarter results for this segment were disappointing, with recent new business awards and successful ongoing cost control measures we anticipate Forward Air Solutions to be a positive bottom line contributor in the near term.”

In closing Mr. Campbell said, “During this challenging time, we would like to recognize the entire Forward Air team of employees and independent contractors. It is their hard work and sacrifice that will guide us through these difficult times allowing us to emerge a stronger company as the recession ultimately comes to an end.”

Commenting on the quarter Rodney L. Bell, Senior Vice President and CFO said, “While our first quarter performance was disappointing, it is encouraging to note that we were, without regard to the non-cash impairment charge, able to remain profitable with positive cash flows each month of the quarter. We ended the quarter with over $31.2 million of cash, a $9.1 million increase from year end. At March 31, 2009, we owed $50.0 million on our line of credit with $40.3 million of availability.”

Commenting further Mr. Bell said, “Assuming no further material deterioration in the environment during the second quarter, we anticipate a year-over-year, quarterly decline in revenue in the range of 11.0 to 16.0% and expect income per diluted share to be between $0.06 and $0.12 per share.”

Review of Financial Results

Forward Air will hold a conference call to discuss first quarter 2009 results on Tuesday, April 21, 2009 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800-841-9385. A replay of the conference call will be available at www.forwardair.com beginning shortly after 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 82 terminals located on or near major airports 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 20 terminals 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
		March 31,			March 31,
		2009			2008
Operating revenue:
Forward Air
	Airport-to-airport	$	63,055		$	82,059
	Logistics		13,044			12,253
	Other		5,867			5,789
Forward Air Solutions
	Pool distribution		14,650			7,837
Total operating revenue			96,616			107,938

Operating expenses:
Purchased transportation
Forward Air
	Airport-to-airport		26,153			31,540
	Logistics		10,279			9,180
	Other		1,064			1,633
Forward Air Solutions
	Pool distribution		2,632			1,172
Total purchased transportation			40,128			43,525
Salaries, wages and employee benefits			29,056			26,447
Operating leases			6,989			4,851
Depreciation and amortization			4,858			3,698
Insurance and claims			2,716			2,260
Fuel expense			1,682			2,124
Other operating expenses			9,056			8,383
Impairment of goodwill and other intangible assets			7,157			--
Total operating expenses			101,642			91,288
(Loss) income from operations			(5,026	)		16,650

Other (expense) income:
	Interest expense		(141	)		(301	)
	Other, net		(22	)		154
Total other expense			(163	)		(147	)
(Loss) income before income taxes			(5,189	)		16,503
Income taxes			(2,085	)		6,495
Net (loss) income		$	(3,104	)	$	10,008

Net (loss) income per share:
Basic		$	(0.11	)	$	0.35
Diluted		$	(0.11	)	$	0.35
Weighted average shares outstanding:
Basic			28,906			28,694
Diluted			28,906			28,982

Dividends per share:		$	0.07		$	0.07

Forward Air Corporation
Reconciliation of U.S. GAAP Financial Results to Adjusted Financial Results
(In thousands, except per share data)
(Unaudited)

	Three months ended
							Adjusted
	March 31,			Impairment			March 31,
	2009 (1)			Charge			2009
(Loss) income from operations	$	(5,026	)	$	7,157		$	2,131

Income taxes		(2,085	)		(2,875	)		790

Net (loss) income		(3,104	)		4,282			1,178

Weighted average diluted shares outstanding		28,906			28,906			28,963

Net (loss) income per share:	$	(0.11	)		(0.15	)	$	0.04

(1) - As reported in accordance with United States generally accepted accounting principles.

Forward Air Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)

		March 31,		December 31,
		2009		2008 (a)
Assets
Current assets:
	Cash	$	31,241	$	22,093
	Accounts receivable, net		48,441		57,206
	Other current assets		12,627		12,290
Total current assets			92,309		91,589

Property and equipment			190,384		186,377
Less accumulated depreciation and amortization			66,453		63,401
Total property and equipment, net			123,931		122,976
Goodwill and other acquired intangibles:
	Goodwill		43,332		50,230
	Other acquired intangibles, net		39,292		40,708
Total goodwill and other acquired intangibles			82,624		90,938
Other assets			2,124		2,024
Total assets		$	300,988	$	307,527

Liabilities and Shareholders’ Equity
Current liabilities:
	Accounts payable	$	7,841	$	11,633
	Accrued expenses		16,124		12,927
	Current portion of debt and capital lease obligations		1,433		1,602
Total current liabilities			25,398		26,162

Long-term debt and capital lease obligations, less current portion			52,868		53,035
Other long-term liabilities			2,918		3,055
Deferred income taxes			6,947		8,841

Shareholders’ equity:
	Common stock		289		289
	Additional paid-in capital		11,802		10,249
	Retained earnings		200,766		205,896
Total shareholders’ equity			212,857		216,434
Total liabilities and shareholders’ equity		$	300,988	$	307,527

(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
			March 31,			March 31,
			2009			2008
Operating activities:
Net (loss) income			$	(3,104	)	$	10,008
Adjustments to reconcile net (loss) income to net cash provided by operating activities
	Depreciation and amortization			4,858			3,698
	Impairment of goodwill and other intangible assets			7,157			-
	Share-based compensation			1,780			1,535
	Loss on sale or disposal of property and equipment			9			16
	Provision for (recovery) loss on receivables			(35	)		95
	Provision for revenue adjustments			794			996
	Deferred income taxes			(1,960	)		514
	Tax benefit for stock options exercised			--			(725	)
	Changes in operating assets and liabilities,
		Accounts receivable		8,006			(5,437	)
		Prepaid expenses and other current assets		705			459
		Accounts payable and accrued expenses		(1,751	)		(317	)
Net cash provided by operating activities				16,459			10,842

Investing activities:
Proceeds from disposal of property and equipment				127			4
Purchases of property and equipment				(4,737	)		(2,645	)
Acquisition of businesses				--			(18,526	)
Other				(112	)		(49	)
Net cash used in investing activities				(4,722	)		(21,216	)

Financing activities:
Payments of debt and capital lease obligations				(336	)		(606	)
Borrowings on line of credit				--			20,000
Payments on line of credit				--			(10,000	)
Proceeds from exercise of stock options				--			956
Payments of cash dividends				(2,025	)		(2,013	)
Cash settlement of share-based awards for minimum tax withholdings				(228	)		(362	)
Tax benefit for stock options exercised				--			725
Net cash (used in) provided by financing activities				(2,589	)		8,700
Net increase (decrease) in cash				9,148			(1,674	)
Cash at beginning of period				22,093			4,909
Cash at end of period			$	31,241		$	3,235