All-time record quarterly reported revenue,
income from operations and net income per diluted share
Guides record second quarter revenue and net
income per diluted share
Forward Air Corporation (NASDAQ:FWRD) (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/
Forward Air Corporation Reports First
Quarter 2022 Results (Photo: Business Wire)
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,
2022
March 31,
2021
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 share1
$
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,
2022
Percent of
Revenue
March 31,
2021
Percent of
Revenue
Change
Percent
Change
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
%
1Network 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,
2022
March 31,
2021
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,
2022
Percent of
Revenue
March 31,
2021
Percent of
Revenue
Change
Percent
Change
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,
2022
March 31,
2021
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,
2022
December 31,
2021
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,
2022
March 31,
2021
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
Operations
Net
Income1
Net Income
Per Diluted
Share1
Income From
Operations
Net
Income1
Net Income
Per Diluted
Share1
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
Share1
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
March 31, 2022
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/
Forward Air Corporation Brandon Hammer, 423-636-7173
bhammer@forwardair.com
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