UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-22490

FORWARD AIR CORPORATION

(Exact name of registrant as specified in its charter)

Tennessee

62-1120025

(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)

1915 Snapps Ferry Road

Building N

Greeneville

37745

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (423) 636-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

FWRD

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

The number of shares outstanding of the registrant’s common stock, $0.01 par value, as of of August 5, ~~2021~~2022 was ~~27,100,389.~~26,851,064.


Table of Contents

Forward Air Corporation

		Page
		Number
	Part I.	I: Financial Information

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets –~~June~~ 3 0June 30 , ~~2021~~2022 and December 31, ~~2020~~2021	3

	Condensed Consolidated Statements of Comprehensive Income - Three M ~~onths~~ E ~~nded~~Months Ended June 3 0 30 , ~~2021~~2022 and ~~2020~~2021	4

	Condensed Consolidated Statements of Comprehensive Income - Six Months Ended June 30, ~~2021~~2022 and ~~2020~~2021	5

	Condensed Consolidated Statements of Cash Flows – Six M ~~onths~~ E ~~nded~~ Months Ended June 3 0 ~~, 2021~~ 30, 2022 and ~~2020~~2021	6

	Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity – Three and Six M ~~onths~~ E ~~nded~~Months Ended June 30 3 0,, 2022 and 2021 ~~and 2020~~	7

	Notes to Condensed Consolidated Financial Statements – June 3 0 ~~, 2021~~ 30, 2022	8

Item 2.	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	2726

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4851

Item 4.	Controls and Procedures	4851

	Part ~~II.~~	II: Other Information

Item 1.	Legal Proceedings	4851

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4952

Item 3.	Defaults Upon Senior Securities	4952

Item 4.	Mine Safety Disclosures	4952

Item 5.	Other Information	4952

Item 6.	Exhibits	5053

Signatures		5154

Table of Contents


Part I.			Financial Information

Item 1.			Financial Statements (Unaudited).


Forward Air Corporation	Forward Air Corporation					Forward Air Corporation
Condensed Consolidated Balance Sheets	Condensed Consolidated Balance Sheets					Condensed Consolidated Balance Sheets
(unaudited and in thousands, except share and per share amounts)	(unaudited and in thousands, except share and per share amounts)					(unaudited and in thousands, except share and per share amounts)

		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	50,844	$	40,254	Cash and cash equivalents	$	47,386	$	37,316
Accounts receivable, less allowance of $2,187 in 2021 and $2,273 in 2020		209,187		156,490
Other receivables		16,999		0
Accounts receivable, less allowance of $3,513 in 2022 and $3,260 in 2021						Accounts receivable, less allowance of $3,513 in 2022 and $3,260 in 2021	246,006		208,085
Other receivables, less allowance of $900 in 2022 and $— in 2021						Other receivables, less allowance of $900 in 2022 and $— in 2021	104		8,097
Other current assets	Other current assets	19,982		28,150		Other current assets	22,260		29,309
Current assets held for sale		0		21,002

Total current assets	Total current assets	297,012		245,896		Total current assets	315,756		282,807

Property and equipment		383,155		380,519
Less accumulated depreciation and amortization		196,168		190,652
Total property and equipment, net		186,987		189,867
Property and equipment, net of accumulated depreciation and amortization of $207,225 in 2022 and $200,867 in 2021						Property and equipment, net of accumulated depreciation and amortization of $207,225 in 2022 and $200,867 in 2021	229,220		219,095
Operating lease right-of-use assets	Operating lease right-of-use assets	148,651		123,338		Operating lease right-of-use assets	154,277		148,198

Goodwill	Goodwill	254,993		244,982		Goodwill	287,597		266,752
Other acquired intangibles, net of accumulated amortization of $100,018 in 2021 and $93,009 in 2020		145,813		145,032
Other acquired intangibles, net of accumulated amortization of $115,297 in 2022 and $107,336 in 2021						Other acquired intangibles, net of accumulated amortization of $115,297 in 2022 and $107,336 in 2021	160,216		154,717

Other assets	Other assets	48,385		45,181		Other assets	50,077		46,254
Noncurrent assets held for sale		0		53,097

Total assets	Total assets	$	1,081,841	$	1,047,393	Total assets	$	1,197,143	$	1,117,823

Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity					Liabilities and Shareholders’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	43,655	$	38,371	Accounts payable	$	42,058	$	44,837
Accrued expenses	Accrued expenses	70,894		51,264		Accrued expenses	64,355		61,621
Other current liabilities	Other current liabilities	6,813		10,580		Other current liabilities	4,044		4,614
Current portion of debt and finance lease obligations	Current portion of debt and finance lease obligations	1,867		1,801		Current portion of debt and finance lease obligations	7,505		6,088
Current portion of operating lease liabilities	Current portion of operating lease liabilities	46,042		43,680		Current portion of operating lease liabilities	49,498		47,532
Current liabilities held for sale		0		25,924

Total current liabilities	Total current liabilities	169,271		171,620		Total current liabilities	167,460		164,692

Long-term debt and finance lease obligations, less current portion and debt issuance costs		161,729		117,408
Finance lease obligations, less current portion						Finance lease obligations, less current portion	10,759		9,571
Long-term debt, less current portion and debt issuance costs						Long-term debt, less current portion and debt issuance costs	147,279		155,466
Operating lease liabilities, less current portion	Operating lease liabilities, less current portion	103,280		80,346		Operating lease liabilities, less current portion	106,552		101,409
Other long-term liabilities	Other long-term liabilities	55,741		54,129		Other long-term liabilities	55,374		49,624
Deferred income taxes	Deferred income taxes	41,471		41,986		Deferred income taxes	45,369		43,407
Noncurrent liabilities held for sale		0		34,575

Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Preferred stock, $0.01 par value: Authorized shares - 5,000,000; 0 shares issued or outstanding in 2021 and 2020		0		0
Common stock, $0.01 par value: Authorized shares - 50,000,000; issued and outstanding shares - 27,120,389 in 2021 and 27,316,434 in 2020		271		273
Preferred stock, $0.01 par value: Authorized shares - 5,000,000; no shares issued or outstanding in 2022 and 2021						Preferred stock, $0.01 par value: Authorized shares - 5,000,000; no shares issued or outstanding in 2022 and 2021	—		—
Common stock, $0.01 par value: Authorized shares - 50,000,000; issued and outstanding shares - 26,879,522 in 2022 and 26,968,788 in 2021						Common stock, $0.01 par value: Authorized shares - 50,000,000; issued and outstanding shares - 26,879,522 in 2022 and 26,968,788 in 2021	269		270
Additional paid-in capital	Additional paid-in capital	252,466		242,916		Additional paid-in capital	265,129		258,474
Retained earnings	Retained earnings	297,612		304,140		Retained earnings	398,952		334,910
Total shareholders’ equity	Total shareholders’ equity	550,349		547,329		Total shareholders’ equity	664,350		593,654
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	1,081,841	$	1,047,393	Total liabilities and shareholders’ equity	$	1,197,143	$	1,117,823

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents


Forward Air Corporation	Forward Air Corporation					Forward Air Corporation
Condensed Consolidated Statements of Comprehensive Income	Condensed Consolidated Statements of Comprehensive Income					Condensed Consolidated Statements of Comprehensive Income
(unaudited and in thousands, except per share amounts)	(unaudited and in thousands, except per share amounts)					(unaudited and in thousands, except per share amounts)

		Three Months Ended					Three Months Ended
		June 30, 2021		June 30, 2020			June 30, 2022		June 30, 2021
Operating revenues	Operating revenues	$	420,671	$	281,678	Operating revenues	$	515,219	$	420,671

Operating expenses:	Operating expenses:					Operating expenses:
Purchased transportation	Purchased transportation	215,217		142,069		Purchased transportation	239,490		215,217
Salaries, wages and employee benefits	Salaries, wages and employee benefits	84,641		63,772		Salaries, wages and employee benefits	86,358		84,641
Operating leases	Operating leases	20,370		17,387		Operating leases	23,459		20,370
Depreciation and amortization	Depreciation and amortization	9,414		9,413		Depreciation and amortization	11,595		9,414
Insurance and claims	Insurance and claims	10,891		7,722		Insurance and claims	13,196		10,891
Fuel expense	Fuel expense	4,059		2,519		Fuel expense	8,314		4,059
Other operating expenses	Other operating expenses	33,955		24,882		Other operating expenses	57,262		33,955

Total operating expenses	Total operating expenses	378,547		267,764		Total operating expenses	439,674		378,547
Income from continuing operations	Income from continuing operations	42,124		13,914		Income from continuing operations	75,545		42,124

Other expense:	Other expense:					Other expense:
Interest expense	Interest expense	(1,323)		(1,198)		Interest expense	(1,193)		(1,323)

Total other expense	Total other expense	(1,323)		(1,198)		Total other expense	(1,193)		(1,323)
Income before income taxes	Income before income taxes	40,801		12,716		Income before income taxes	74,352		40,801
Income tax expense	Income tax expense	10,124		3,491		Income tax expense	18,922		10,124
Net income from continuing operations	Net income from continuing operations	30,677		9,225		Net income from continuing operations	55,430		30,677
Loss from discontinued operation, net of tax	Loss from discontinued operation, net of tax	0		(6,071)		Loss from discontinued operation, net of tax	—		—
Net income and comprehensive income	Net income and comprehensive income	$	30,677	$	3,154	Net income and comprehensive income	$	55,430	$	30,677

Basic net income (loss) per share	Basic net income (loss) per share					Basic net income (loss) per share
Continuing operations	Continuing operations	$	1.12	$	0.33	Continuing operations	$	2.05	$	1.12
Discontinued operation	Discontinued operation	0		(0.22)		Discontinued operation	—		—
Net income per basic share	Net income per basic share	$	1.12	$	0.11	Net income per basic share	$	2.05	$	1.12

Diluted net income (loss) per share	Diluted net income (loss) per share					Diluted net income (loss) per share
Continuing operations	Continuing operations	$	1.11	$	0.33	Continuing operations	$	2.04	$	1.11
Discontinued operation	Discontinued operation	0		(0.22)		Discontinued operation	—		—
Net income per diluted share	Net income per diluted share	$	1.11	$	0.11	Net income per diluted share	$	2.04	$	1.11

Dividends per share	Dividends per share	$	0.21	$	0.18	Dividends per share	$	0.24	$	0.21

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents


Forward Air Corporation	Forward Air Corporation					Forward Air Corporation
Condensed Consolidated Statements of Comprehensive Income	Condensed Consolidated Statements of Comprehensive Income					Condensed Consolidated Statements of Comprehensive Income
(unaudited and in thousands, except per share amounts)	(unaudited and in thousands, except per share amounts)					(unaudited and in thousands, except per share amounts)

		Six Months Ended					Six Months Ended
		June 30, 2021		June 30, 2020			June 30, 2022		June 30, 2021
Operating revenues	Operating revenues	$	782,873	$	587,235	Operating revenues	$	982,180	$	782,873

Operating expenses:	Operating expenses:					Operating expenses:
Purchased transportation	Purchased transportation	399,825		292,667		Purchased transportation	464,322		399,825
Salaries, wages and employee benefits	Salaries, wages and employee benefits	159,538		133,331		Salaries, wages and employee benefits	172,439		159,538
Operating leases	Operating leases	39,537		35,271		Operating leases	46,132		39,537
Depreciation and amortization	Depreciation and amortization	18,651		18,747		Depreciation and amortization	22,725		18,651
Insurance and claims	Insurance and claims	20,632		17,766		Insurance and claims	25,164		20,632
Fuel expense	Fuel expense	7,761		6,532		Fuel expense	14,179		7,761
Other operating expenses	Other operating expenses	72,081		53,234		Other operating expenses	104,323		72,081

Total operating expenses	Total operating expenses	718,025		557,548		Total operating expenses	849,284		718,025
Income from continuing operations	Income from continuing operations	64,848		29,687		Income from continuing operations	132,896		64,848

Other expense:	Other expense:					Other expense:
Interest expense	Interest expense	(2,488)		(2,051)		Interest expense	(1,977)		(2,488)

Total other expense	Total other expense	(2,488)		(2,051)		Total other expense	(1,977)		(2,488)
Income before income taxes	Income before income taxes	62,360		27,636		Income before income taxes	130,919		62,360
Income tax expense	Income tax expense	14,969		6,995		Income tax expense	32,803		14,969
Net income from continuing operations	Net income from continuing operations	47,391		20,641		Net income from continuing operations	98,116		47,391
Loss from discontinued operation, net of tax	Loss from discontinued operation, net of tax	(5,533)		(9,112)		Loss from discontinued operation, net of tax	—		(5,533)
Net income and comprehensive income	Net income and comprehensive income	$	41,858	$	11,529	Net income and comprehensive income	$	98,116	$	41,858

Basic net income (loss) per share	Basic net income (loss) per share					Basic net income (loss) per share
Continuing operations	Continuing operations	$	1.72	$	0.72	Continuing operations	$	3.63	$	1.72
Discontinued operation	Discontinued operation	(0.20)		(0.31)		Discontinued operation	—		(0.20)
Net income per basic share	Net income per basic share	$	1.52	$	0.41	Net income per basic share	$	3.63	$	1.52

Diluted net income (loss) per share	Diluted net income (loss) per share					Diluted net income (loss) per share
Continuing operations	Continuing operations	$	1.71	$	0.72	Continuing operations	$	3.61	$	1.71
Discontinued operation	Discontinued operation	(0.20)		(0.32)		Discontinued operation	—		(0.20)
Net income per diluted share	Net income per diluted share	$	1.51	$	0.40	Net income per diluted share	$	3.61	$	1.51

Dividends per share	Dividends per share	$	0.42	$	0.36	Dividends per share	$	0.48	$	0.42

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents


Forward Air Corporation	Forward Air Corporation					Forward Air Corporation
Condensed Consolidated Statements of Cash Flows	Condensed Consolidated Statements of Cash Flows					Condensed Consolidated Statements of Cash Flows
(unaudited and in thousands)	(unaudited and in thousands)					(unaudited and in thousands)

		Six Months Ended					Six Months Ended
		June 30, 2021		June 30, 2020			June 30, 2022		June 30, 2021

Operating activities:	Operating activities:					Operating activities:
Net income from continuing operations	Net income from continuing operations	$	47,391	$	20,641	Net income from continuing operations	$	98,116	$	47,391
Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations	Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations					Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations
Depreciation and amortization	Depreciation and amortization	18,651		18,747		Depreciation and amortization	22,725		18,651

Change in fair value of earn-out liability	Change in fair value of earn-out liability	(385)		(2,702)		Change in fair value of earn-out liability	(294)		(385)
Share-based compensation expense	Share-based compensation expense	5,578		5,507		Share-based compensation expense	6,067		5,578
Provision for revenue adjustments	Provision for revenue adjustments	3,525		1,787		Provision for revenue adjustments	2,934		3,525
Deferred income tax (benefit) expense		(572)		4,668
Deferred income tax expense (benefit)						Deferred income tax expense (benefit)	1,962		(572)
Other	Other	189		697		Other	1,383		189
Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:	Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:					Changes in operating assets and liabilities, net of effects from the purchase of acquired businesses:
Accounts receivable	Accounts receivable	(51,018)		2,979		Accounts receivable	(36,751)		(51,018)
Other receivables	Other receivables	(13,491)		0		Other receivables	7,093		(13,491)
Other current and noncurrent assets	Other current and noncurrent assets	6,746		(29)		Other current and noncurrent assets	3,918		6,746
Accounts payable and accrued expenses		23,047		7,634
Accounts payable, accrued expenses and other long-term liabilities						Accounts payable, accrued expenses and other long-term liabilities	5,667		23,047
Net cash provided by operating activities of continuing operations	Net cash provided by operating activities of continuing operations	39,661		59,929		Net cash provided by operating activities of continuing operations	112,820		39,661

Investing activities:	Investing activities:					Investing activities:
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	1,314		988		Proceeds from sale of property and equipment	767		1,314
Purchases of property and equipment	Purchases of property and equipment	(8,575)		(14,214)		Purchases of property and equipment	(18,673)		(8,575)
Purchase of a business, net of cash acquired		(22,543)		(55,931)
Purchases of a business, net of cash acquired						Purchases of a business, net of cash acquired	(40,433)		(22,543)
Net cash used in investing activities of continuing operations	Net cash used in investing activities of continuing operations	(29,804)		(69,157)		Net cash used in investing activities of continuing operations	(58,339)		(29,804)

Financing activities:	Financing activities:					Financing activities:
Repayments of finance lease obligations	Repayments of finance lease obligations	(954)		(676)		Repayments of finance lease obligations	(2,583)		(954)
Proceeds from revolving credit facility		45,000		65,000
Proceeds from credit facility						Proceeds from credit facility	—		45,000
Payments on credit facility						Payments on credit facility	(8,250)		—

Payment of earn-out liability	Payment of earn-out liability	0		(5,284)		Payment of earn-out liability	(91)		—
Proceeds from issuance of common stock upon stock option exercises	Proceeds from issuance of common stock upon stock option exercises	3,570		0		Proceeds from issuance of common stock upon stock option exercises	206		3,570
Payments of dividends to stockholders		(11,565)		(10,087)
Payments of dividends to shareholders						Payments of dividends to shareholders	(12,994)		(11,565)
Repurchases and retirement of common stock	Repurchases and retirement of common stock	(33,992)		(15,259)		Repurchases and retirement of common stock	(17,780)		(33,992)
Proceeds from common stock issued under employee stock purchase plan	Proceeds from common stock issued under employee stock purchase plan	388		294		Proceeds from common stock issued under employee stock purchase plan	374		388
Payment of minimum tax withholdings on share-based awards	Payment of minimum tax withholdings on share-based awards	(2,832)		(3,286)		Payment of minimum tax withholdings on share-based awards	(3,293)		(2,832)
Contributions from (distributions to) subsidiary held for sale		1,118		(5,307)
Net cash provided by financing activities from continuing operations		733		25,395
Contributions from subsidiary held for sale						Contributions from subsidiary held for sale	—		1,118
Net cash (used in) provided by financing activities from continuing operations						Net cash (used in) provided by financing activities from continuing operations	(44,411)		733
Net increase in cash and cash equivalents of continuing operations	Net increase in cash and cash equivalents of continuing operations	10,590		16,167		Net increase in cash and cash equivalents of continuing operations	10,070		10,590

Cash from discontinued operation:	Cash from discontinued operation:					Cash from discontinued operation:
Net cash used in operating activities of discontinued operation	Net cash used in operating activities of discontinued operation	(6,902)		(4,672)		Net cash used in operating activities of discontinued operation	—		(6,902)
Net cash provided by (used in) investing activities of discontinued operation		8,020		(635)
Net cash (used in) provided by financing activities of discontinued operation		(1,118)		5,307
Net cash provided by investing activities of discontinued operation						Net cash provided by investing activities of discontinued operation	—		8,020
Net cash used in financing activities of discontinued operation						Net cash used in financing activities of discontinued operation	—		(1,118)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	10,590		16,167		Net increase in cash and cash equivalents	10,070		10,590
Cash and cash equivalents at beginning of period of continuing operations	Cash and cash equivalents at beginning of period of continuing operations	40,254		64,749		Cash and cash equivalents at beginning of period of continuing operations	37,316		40,254
Cash at beginning of period of discontinued operation	Cash at beginning of period of discontinued operation	0		0		Cash at beginning of period of discontinued operation	—		—
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	10,590		16,167		Net increase in cash and cash equivalents	10,070		10,590
Less: cash at end of period of discontinued operation	Less: cash at end of period of discontinued operation	0		0		Less: cash at end of period of discontinued operation	—		—
Cash and cash equivalents at end of period of continuing operations	Cash and cash equivalents at end of period of continuing operations	$	50,844	$	80,916	Cash and cash equivalents at end of period of continuing operations	$	47,386	$	50,844

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents


Forward Air Corporation
Condensed Consolidated Statements of Shareholders’ Equity
(unaudited and in thousands)

	Common Stock			Additional Paid-in Capital		Retained Earnings		Total Shareholders’ Equity
	Shares	Amount
Balance at December 31, 2021	26,969	$	270	$	258,474	$	334,910	$	593,654
Net income	—	—		—		42,686		42,686
Stock options exercised	3	—		206		—		206

Share-based compensation expense	—	—		2,761		—		2,761
Payment of dividends to shareholders	—	—		4		(6,506)		(6,502)
Payment of minimum tax withholdings on share-based awards	(30)	—		—		(3,254)		(3,254)
Repurchases and retirement of common stock	(176)	(2)		—		(17,778)		(17,780)
Issuance of share-based awards	96	1		(1)		—		—
Balance at March 31, 2022	26,862	$	269	$	261,444	$	350,058	$	611,771
Net income	—	—		—		55,430		55,430

Common stock issued under employee stock purchase plan	5	—		374		—		374
Share-based compensation expense	—	—		3,306		—		3,306
Payment of dividends to shareholders	—	—		5		(6,497)		(6,492)
Payment of minimum tax withholdings on share-based awards	(1)	—		—		(39)		(39)

Issuance of share-based awards	14	—		—		—		—
Balance at June 30, 2022	26,880	$	269	$	265,129	$	398,952	$	664,350


	Common Stock			Additional Paid-in Capital		Retained Earnings		Total Shareholders’ Equity
	Shares	Amount
Balance at December 31, 2020	27,316	$	273	$	242,916	$	304,140	$	547,329
Net income	—	—		—		11,181		11,181
Stock options exercised	40	—		2,147		—		2,147
Share-based compensation expense	—	—		2,613		—		2,613
Payment of dividends to shareholders	—	—		3		(5,800)		(5,797)
Payment of minimum tax withholdings on share-based awards	(35)	—		—		(2,744)		(2,744)
Repurchases and retirement of common stock	(114)	(1)		—		(9,997)		(9,998)
Issuance of share-based awards	111	1		(1)		—		—
Balance at March 31, 2021	27,318	$	273	$	247,678	$	296,780	$	544,731
Net income	—	—		—		30,677		30,677
Stock options exercised	26	—		1,416		—		1,416
Common stock issued under employee stock purchase plan	5	—		388		—		388
Share-based compensation expense	—	—		2,981		—		2,981
Payment of dividends to shareholders	—	—		3		(5,771)		(5,768)
Payment of minimum tax withholdings on share-based awards	(1)	—		—		(82)		(82)
Repurchases and retirement of common stock	(252)	(2)		—		(23,992)		(23,994)
Issuance of share-based awards	24	—		—		—		—
Balance at June 30, 2021	27,120	$	271	$	252,466	$	297,612	$	550,349

Forward Air Corporation
Condensed Consolidated Statements of Shareholders’ Equity
(unaudited and in thousands)
Common Stock Additional Paid-in
Capital Retained Earnings Total Shareholders’ Equity
Shares Amount
Balance at December 31, 2020 27,316 $ 273 $ 242,916 $ 304,140 $ 547,329
Net income — — — 11,181 11,181
Stock options exercised 40 — 2,147 — 2,147
Share-based compensation expense — — 2,613 — 2,613
Payment of dividends to shareholders — — 3 (5,800) (5,797)
Payment of minimum tax withholdings on share-based awards (35) — — (2,744) (2,744)
Repurchases and retirement of common stock (114) (1) — (9,997) (9,998)
Issuance of share-based awards 111 1 (1) — 0
Balance at March 31, 2021 27,318 $ 273 $ 247,678 $ 296,780 $ 544,731
Net income — — — 30,677 30,677
Stock options exercised 26 — 1,416 — 1,416
Common stock issued under employee stock purchase plan 5 — 388 — 388
Share-based compensation expense — — 2,981 — 2,981
Payment of dividends to shareholders — — 3 (5,771) (5,768)
Payment of minimum tax withholdings on share-based awards (1) — — (82) (82)
Repurchases and retirement of common stock (252) (2) — (23,992) (23,994)
Issuance of share-based awards 24 — — — —
Balance at June 30, 2021 27,120 $ 271 $ 252,466 $ 297,612 $ 550,349

Common Stock Additional Paid-in
Capital Retained Earnings Total Shareholders’ Equity
Shares Amount
Balance at December 31, 2019 27,850 $ 279 $ 226,869 $ 350,034 $ 577,182
Net income — — — 8,375 8,375
Share-based compensation expense — — 3,266 — 3,266
Payment of dividends to shareholders — — 2 (5,052) (5,050)
Payment of minimum tax withholdings on share-based awards (42) — — (2,672) (2,672)
Repurchases and retirement of common stock (268) (3) — (15,256) (15,259)
Issuance of share-based awards 139 1 (2) — (1)
Balance at March 31, 2020 27,679 $ 277 $ 230,135 $ 335,429 $ 565,841
Net income — — — 3,155 3,155
Common stock issued under employee stock purchase plan 7 — 295 — 295
Share-based compensation expense — — 2,654 — 2,654
Payment of dividends to shareholders — — 3 (5,042) (5,039)
Payment of minimum tax withholdings on share-based awards (13) — — (613) (613)
Issuance of share-based awards 56 — (1) — (1)
Balance at June 30, 2020 27,729 $ 277 $ 233,086 $ 332,929 $ 566,292

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

1. Description of Business and Basis of Presentation

Basis of Presentation and Principles of Consolidation

Forward Air Corporation and its subsidiaries (“Forward Air” or or the “Company”) is a leading asset-light freight and logistics company. The Company has 2 reportable segments: Expedited Freight and Intermodal. The Company conducts business in the United States and Canada.

The Expedited Freight segment ~~operates a comprehensive national network to provide~~provides expedited regional, inter-regional and national less-than-truckload (“LTL”), truckload and final mile services. Expedited Freight also offers customers local pick-up and delivery and other services including ~~final mile, truckload,~~ shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.

The Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads. Intermodal also offers dedicated contract and ~~Container Freight Station~~container freight station (“CFS”) warehouse and handling services.

The Company’s condensed consolidated financial statements include Forward Air Corporation and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

The condensed consolidated financial statements of the Company have been prepared in ~~accordance~~conformity with ~~United States~~U.S. generally accepted accounting principles (“~~U.S.~~ GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly the Company’s financial position, results of operations, and cash flows ~~at the dates and~~ for the periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Results for interim periods are not necessarily indicative of the results for the year.

~~The~~On April 23, 2020, the Board of Directors (the “Board”) of the Company 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. Pool provided high-frequency handling and distribution of time sensitive product to numerous destinations within a specific geographic region. ~~Pool offered this service throughout~~As a result of the ~~Mid-Atlantic, Southeast, Midwest and Southwest United States. Accordingly,~~strategy to divest of Pool, the results of operations for Pool ~~have been~~were presented as a discontinued operation in ~~our~~the Condensed Consolidated Statements of Comprehensive Income ~~for all period presented. In addition, the assets and liabilities were presented as held for sale in the Condensed Consolidated Balance Sheets~~ for the prior period. Unless otherwise noted, amounts, percentages and discussion for ~~all periods~~the prior period reflect the results of operations, financial condition and cash flows from ~~our~~the Company’s continuing operations. Refer to Note 3, Discontinued Operation, for further discussion.

2. Revenue Recognition

Revenue is recognized when the Company satisfies the performance obligation by the delivery of a shipment in accordance with contractual agreements, bills of lading (“BOLs”) and general tariff provisions. The amount of revenue recognized is measured as the consideration the Company expects to receive in exchange for those services pursuant to a contract with a customer. A contract exists once the Company enters into a contractual agreement with a customer. The Company does not recognize revenue in cases where collectibility is not probable, and defers recognition until collection is probable or payment is received.

The Company generates revenue from the delivery of a shipment and the completion of related services. Revenue for the delivery of a shipment is recorded over time to coincide with when customers simultaneously receive and consume the benefits of the delivery services. Accordingly, revenue billed to a customer for the transportation of freight are recognized over the transit period as the performance obligation to the customer is satisfied. The Company determines the transit period for a shipment based on the pick-up date and the delivery date, which may be estimated if delivery has not occurred as of a reporting period. The determination of the transit period and how much of it has been completed as of a given reporting date may require the Company to make judgments that impact the timing of revenue recognized. For delivery of shipments with a pick-up date in one reporting period and a delivery date in another reporting period, the Company recognizes revenue based on relative transit ~~time in each reporting period. A portion of the total revenue to be billed to the customer after completion of a delivery is~~

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

time in each reporting period. A portion of the total revenue to be billed to the customer after completion of a delivery is recognized in each reporting period based on the percentage of total transit time that has been completed at the end of the applicable reporting period. Upon delivery of a shipment or related service, customers are billed according to the applicable payment terms. Related services are a separate performance obligation and include accessorial charges such as terminal handling, storage, equipment rentals and customs brokerage.

Revenue is classified based on the line of business as the Company believes ~~this~~that best depicts the nature, timing and amount of revenue and cash flows. For all lines of business, the Company records revenue on a gross basis as it is the principal in the transaction as the Company has discretion to determine the amount of consideration. Additionally, the Company has the discretion to select drivers and other vendors for the services provided to customers. These factors, discretion in the amount of consideration and the selection of drivers and other vendors, support revenue recognized on a gross basis.

3. Discontinued Operation ~~and Held for Sale~~

As previously disclosed, on April 23, 2020, the Company made a decision to divest of ~~Pool. The~~ Pool ~~business met~~and the ~~criteria for held for~~ sale ~~classification.~~was completed on February 12, 2021. As a result, the assets and liabilities of Pool were presented separately under the captions “Current assets held for sale”, “Noncurrent assets held for sale”, “Current liabilities held for sale” and “Noncurrent liabilities held for sale” in the Condensed Consolidated Balance Sheets as of December 31, 2020. The results of Pool were ~~reclassified~~classified to “Loss from discontinued operation, net of tax” in the Condensed Consolidated Statements of Comprehensive Income for three and six months ended June 30, ~~2021 and 2020.~~2021. Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operation and ~~have been reallocated~~were allocated to continuing operations. These costs were ~~reclassified~~classified to the eliminations ~~and other~~ column in the segment reconciliation in Note 13, Segment Reporting.

~~Sale of Pool~~

On February 12, 2021, the Company completed the sale of the Pool business for $8,000 in cash and up to a $12,000 earn-out based on earnings before interest, taxes, depreciation and amortization. The sale agreement for Pool included an earn-out based on the achievement of certain earnings before interest, taxes, depreciation and amortization attainment over an eleven-month period, beginning February 1, 2021. The Company will receive payment for the amount earned in the first quarter of 2022, and if elected, the buyer may defer the payment of up to half of the amount earned to first quarter of 2023. The estimated fair value of the earn-out asset on the date of sale was $6,967. The fair value was based on the estimated eleven-month period of the earnings before interest, taxes, depreciation and amortization and was calculated using a Monte Carlo simulation model.

~~The weighted-average assumptions under the Monte Carlo simulation model were as follows:~~


			~~February 12, 2021~~
~~Counterparty credit spread~~			~~1.2%~~
~~Earnings before interest, taxes, depreciation and amortization discount rate~~			~~15.0%~~
~~Asset volatility~~			~~55.0%~~

Subsequent to the date of sale, the Company will recognize any increases in the carrying value of the earn-out asset when the change is realized and will evaluate the earn-out asset for impairment at each reporting period. The Company concluded there were no indicators of impairment during the three months ended June 30, 2021. As of June 30, 2021, the Company recorded $3,508 in “Other receivables” ~~and $3,459 in “Other assets~~” ~~in the Condensed Consolidated Balance Sheets.~~

Transition Services Agreement

On February 12, 2021, the Company entered into a Transition Services Agreement (“TSA”) with TOG FAS Holdings LLC, the buyer of the Pool business. Under the TSA, the Company ~~performs~~performed certain services on an interim basis in order to facilitate the orderly transition of the Pool business. The effective date of the TSA was February 12, 2021 and ~~will remain~~remained in effect until the date all services ~~have been~~were completed, but no more than six months following the effective date. The TSA ~~provides~~provided the right to extend the term of the TSA with no limit on the number of the mutually agreed upon extensions. In exchange for the services performed by the Company under the TSA, the Company ~~receives~~received a monthly service charge. For the three and six

~~Table of Contents~~

~~Forward Air Corporation~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited and in thousands, except per share data)~~

~~June 30, 2021~~

months ended June 30, 2021, the Company recognized $241 and $412, respectively, in “Other operating expenses” in the Condensed Consolidated Statements of Comprehensive Income, for the services performed under the TSA. The TSA ended in October 2021 when all services were completed.

Additionally, under the TSA, the Company ~~remits~~remitted payments to outside vendors on behalf of TOG FAS Holdings LLC for expenses incurred by the Pool business up to a limit of $18,000. The Company iswas reimbursed by TOG FAS Holdings LLC within 60 days from the end of the month in ~~which~~ the payment iswas remitted. As of June 30, 2022 and December 31, 2021, the Company recorded a net receivable in the amount of ~~$13,491~~$104 and $8,097 respectively, in “Other receivables” in the Condensed Consolidated Balance Sheets for the reimbursement due to the Company. The Company evaluates the collectability of the receivables at least quarterly and if the Company is aware of the inability of TOG FAS Holdings LLC to meet its financial obligations to the Company, the Company will record a specific reserve in order to reduce the receivable to the amount the Company reasonably believes will be collected. As of June 30, 2022, the Company recorded a specific reserve in the amount of $900 in order to reduce the receivable to the amount the Company reasonably believes will be collected.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2022

Summarized Discontinued Operation Financial Information

A summary of the results of operations classified as a discontinued operation, net of tax, in the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021 ~~and 2020~~ is as follows:

Three Months Ended Six Months Ended
June 30,
2021 June 30,
2020 June 30,
2021 June 30,
2020
Operating revenues $ 0 $ 13,974 $ 17,087 $ 50,926
Operating expenses:
Purchased transportation 0 3,147 4,290 12,683
Salaries, wages and employee benefits 0 8,394 9,674 25,507
Operating leases 0 4,966 2,907 10,646
Depreciation and amortization 0 362 0 1,657
Insurance and claims 0 1,287 929 3,013
Fuel expense 0 413 644 1,740
Other operating expenses 0 3,495 2,087 7,841
Total operating expenses 0 22,064 20,531 63,087
Loss from discontinued operation 0 (8,090) (3,444) (12,161)
Loss on sale of business 0 0 (2,860) 0
Loss from discontinued operation before income taxes 0 (8,090) (6,304) (12,161)
Income tax benefit 0 (2,019) (771) (3,049)
Loss from discontinued operation, net of tax $ 0 $ (6,071) $ (5,533) $ (9,112)

~~Table of Contents~~

~~Forward Air Corporation~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited and in thousands, except per share data)~~

~~June 30, 2021~~








	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
Operating revenue	$	—	$	17,087

Operating expenses:
Purchased transportation	—		4,290
Salaries, wages and employee benefits	—		9,674
Operating leases	—		2,907
Depreciation and amortization	—		—
Insurance and claims	—		929
Fuel expense	—		644
Other operating expenses	—		2,087

Total operating expenses	—		20,531
Loss from discontinued operation	—		(3,444)
Loss on sale of business	—		(2,860)
Loss from discontinued operation before income taxes	—		(6,304)
Income tax benefit	—		(771)
Loss from discontinued operation, net of tax	$	—	$	(5,533)

4. Acquisitions

~~Expedited Freight Acquisition~~

As part of the Company’s strategy to expand final mile pickup and delivery operations, in April 2019, the Company acquired certain assets and liabilities of FSA Network, Inc., doing business as FSA Logistix (“FSA”), for $27,000 and a potential earn-out of up to $15,000. The purchase agreement for FSA included an earn-out up to $15,000 based on the achievement of certain revenue milestones over 2 one-year periods, beginning May 1, 2019. The estimated fair value of the earn-out liability on the date of acquisition was $11,803. The fair value was based on the estimated two-year performance of the acquired customer revenue and was calculated using a Monte Carlo simulation model. The fair value of the earn-out liability was adjusted at each reporting period based on changes in the expected cash flows and related assumptions used in the Monte Carlo simulation model. During the three and six months ended June 30, 2021, the fair value of the earn-out changed by ($4) and ($52), respectively, and the change in fair value was recorded in “Other operating expenses” in the Condensed Consolidated Statements of Comprehensive Income. During the three and six months ended June 30, 2020, the fair value of the earn-out changed by ($2,108) and ($2,702), respectively, and the change in fair value was recorded in “Other operating expenses” in the Condensed Consolidated Statements of Comprehensive Income. The first one-year period ended in the second quarter of 2020 and the Company paid $5,284 based on the terms of the purchase agreement. The second one-year period ended in the second quarter of 2021 and the Company will remit payment in the third quarter of 2021 based on the terms of purchase agreement. As of June 30, 2021 and December 31, 2020, the fair value of the earn-out liability was $6,813 and $6,865, respectively, which was reflected in “Other current liabilities” ~~in the Condensed Consolidated Balance Sheets.~~

In May 2021, the Company acquired certain assets and liabilities of J&P Hall Express Delivery (“J&P”) for $7,543. J&P is headquartered in Atlanta, Georgia with a second terminal in Albany, Georgia. The acquisition of J&P supports the Company’s strategic growth plan by expanding pickup and delivery, less than truckload, truckload, less than container load, container freight station warehousing, and airport transfer services across the Southeastern United States. The acquisition was financed by cash flow from operations. The results of J&P have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Expedited Freight reportable segment.

Intermodal ~~Acquisition~~Acquisitions

In February 2021, the Company acquired certain assets and liabilities of Proficient Transport Incorporated and Proficient Trucking, Inc. (together “Proficient Transport”) for ~~$15,510~~$16,339 and a potential earn-out of up to $2,000. Proficient Transport is an intermodal drayage company headquartered in Chicago, Illinois. The acquisition of Proficient Transport supports the Company’s strategic growth plan by expanding the intermodal footprint in Georgia, Illinois, North Carolina, and Texas, and introduces a new location in Ohio. The acquisition was financed by cash flows from operations. The results of Proficient Transport have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Intermodal reportable segment.

The purchase agreement for Proficient Transport included an earn-out up to $2,000 based on the achievement of certain revenue milestones over a one-year period, beginning March 1, 2021. The estimated fair value of the earn-out liability on the date of acquisition was $829. The fair value was based on the estimated one-year performance of the acquired customer revenue and was calculated using the option pricing method.

The ~~weighted-average~~fair value of the earn-out liability was adjusted at each reporting period based on changes in the expected cash flows and related assumptions used in the option pricing method. During the three and six months ended June 30, 2022, the fair value of the earn-out changed by $— and ($294) respectively, and the change in fair value was recorded in “Other operating expenses” in the Condensed Consolidated Statements of Comprehensive Income. During both the three and six months ended June 30, 2021, the fair value of the earn-out changed by ($333), and the change in fair value was recorded in “Other operating expenses” in the Condensed Consolidated Statements of Comprehensive Income. The one-year period ended in the first quarter of 2022 and the Company paid $91 in the second quarter of 2022 based on the terms of the purchase agreement. As of December 31, 2021, the fair value of the earn-out liability was $385, which was reflected in “Other current liabilities” in the Condensed Consolidated Balance Sheets.

Table of Contents

Forward Air Corporation

Notes to ~~calculate~~Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2022

In November 2021, the Company acquired certain assets and liabilities of BarOle Trucking, Inc. (“BarOle”) for $35,436. BarOle is an intermodal drayage company headquartered in Roseville, Minnesota. The acquisition of BarOle provides additional capacity and resources to meet customer demands in the intermodal market, and extends the service footprint to the Minneapolis-Saint Paul, Minnesota area. In addition, BarOle has a larger terminal location, which allows for further expansion in the future. The acquisition was financed by cash flows from operations. The results of BarOle have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Intermodal reportable segment.

In May 2022, the Company acquired certain assets and liabilities of Edgmon Trucking, LLC (“Edgmon”) for $40,433 and a potential earn-out of up to $5,000. Edgmon, headquartered in Kent, Washington, operates a terminal in Kent and a yard in Seattle, servicing both the Port of Seattle and the Port of Tacoma. The acquisition of Edgmon marks the Company’s first Intermodal location on the West Coast, a key area of expansion in the Intermodal strategic growth plan. The acquisition was financed by cash flows from operations. The results of Edgmon have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Intermodal reportable segment.

The purchase agreement for Edgmon included an earn-out up to $5,000 based on the achievement of certain profit contribution milestones over a nineteen month period, beginning May 30, 2022. An estimated fair value of the earn-out ~~under~~liability on the date of acquisition is in process and is excluded from the preliminary purchase price. As the Company finalizes the valuation of the preliminary purchase price, the fair value will based on the estimated nineteen month profit contribution of the acquired operations and will be calculated using the option pricing ~~method were~~method.

Fair Value of Assets Acquired and Liabilities Assumed

Assets acquired and liabilities assumed as ~~follows:~~of the acquisition date are presented in the following table:

February 28, 2021 June 30, 2021
Risk-free rate 0.1% 0.1%
Revenue discount rate 8.3% 8.3%
Revenue volatility 27.3% 19.7%


	BarOle		Edgmon
	November 30, 2021		May 30, 2022
Tangible assets:

Accounts receivable	$	2,481	$	4,831


Property and equipment	6,464		613


Total tangible assets	8,945		5,444
Intangible assets:
Customer relationships	12,028		17,950
Non-compete agreements	212		465
Goodwill	14,519		17,003
Total intangible assets	26,759		35,418
Total assets acquired	35,704		40,862

Liabilities assumed:
Current liabilities	268		429



Total liabilities assumed	268		429
Net assets acquired	$	35,436	$	40,433

The preliminary purchase price for BarOle and Edgmon has been allocated to assets acquired and liabilities assumed based on the Company’s best estimates and assumptions using the information available as of the acquisition date through the date of this filing. The provisional measurements of identifiable assets and liabilities, and the resulting goodwill related to these acquisitions are subject to adjustments in subsequent periods as the Company finalizes its purchase price allocation, including the third-party valuations. During the six months ended June 30, 2022, the Company recorded measurement period adjustments to the provisional amounts initially recorded for acquired property and equipment and acquired customer relationships and non-compete agreements related to the BarOle acquisition. The measurement period adjustments resulted in a $1,113 increase to acquired property and equipment and a combined $4,955 decrease to acquired customer relationships and non-compete

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

~~During both~~agreements, with a corresponding net increase to goodwill. The Company expects to finalize the ~~three and six months ended June 30, 2021,~~valuation as soon as practicable, but no later than one year from the ~~fair value of the earn-out changed by ($333) and the change in the fair value was recorded in “Other operating expenses~~” ~~in the Condensed Consolidated Statements of Comprehensive Income. As of June 30, 2021, the fair value of the earn-out liability was $496, which was reflected in “Other current liabilities~~” ~~in the Condensed Consolidated Balance Sheets.~~

~~Fair Value of Assets Acquired and Liabilities Assumed~~

~~Assets acquired and liabilities assumed as of the~~respective acquisition ~~date are presented in the following table:~~

Proficient Transport J&P
February 28, 2021 May 30, 2021
Tangible assets:
Accounts receivable $ 4,171 $ 1,686
Prepaid expenses and other current assets 0 32
Property and equipment 140 934
Other assets 24 3
Total tangible assets 4,335 2,655
Intangible assets:
Customer relationships 6,060 1,580
Non-compete agreements 18 132
Goodwill 6,249 3,762
Total intangible assets 12,327 5,474
Total assets acquired 16,662 8,129
Liabilities assumed:
Current liabilities 323 586
Total liabilities assumed 323 586
Net assets acquired $ 16,339 $ 7,543
dates.

The ~~fair value of the assets acquired and liabilities assumed are preliminary based on the information available as of the acquisition date through the date of this filing.~~

~~The weighted-average~~estimated useful life of acquired intangible assets as of the acquisition date are summarized in the following table:

~~Weighted-Average~~Estimated Useful Lives

~~Proficient Transport~~BarOle

~~J&P~~Edgmon

Customer relationships

8 years

127 years

Non-compete agreements

~~1 year~~5 years

5 years

~~Table of Contents~~

~~Forward Air Corporation~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited and in thousands, except per share data)~~

~~June 30, 2021~~

5. Goodwill and ~~Other~~ Intangible Assets

Goodwill

Changes in the carrying amount of goodwill during the six months ended June 30, ~~2021~~2022 are summarized as follows:

Expedited Freight Intermodal Consolidated
Balance as of December 31, 2020 $ 165,268 $ 79,714 $ 244,982
Acquisitions 3,762 6,249 10,011
Balance as of June 30, 2021 $ 169,030 $ 85,963 $ 254,993


	Expedited Freight		Intermodal		Consolidated




Balance as of December 31, 2021	$	169,288	$	97,464	$	266,752
Acquisition	—		17,003		17,003
Acquisition adjustment	—		3,842		3,842
Balance as of June 30, 2022	$	169,288	$	118,309	$	287,597

The Company’s accumulated goodwill impairment is $25,686 related to impairment charges the Company recorded during 2016 pertaining to its TLS reporting unit. The TLS reporting unit operates within the Expedited Freight reportable segment. As of June 30, 2022, approximately $208,454 of goodwill is deductible for tax purposes.

Goodwill is tested for impairment on an annual basis and more often if indications of impairment exist. The Company conducts its annual impairment analyses as of June 30 each year. ~~Based on~~The results of the ~~current macroeconomic conditions, the Company assessed its~~Company’s goodwill ~~and other intangible assets for indications of~~ impairment analyses conducted as of June 30, ~~2021. The Company concluded there were~~2022 indicated that no ~~indicators~~reduction in the carrying amount of ~~impairment during~~ the ~~six months ended June 30, 2021.~~goodwill was required.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2022

Other Intangible Assets

Changes in the carrying amount of acquired intangible assets during the six months ended June 30, ~~2021~~2022 are summarized as follows:

Gross Carrying Amount
Customer Relationships1
Non-Compete Agreements Trade Names Total
Balance as of December 31, 2020 $ 228,416 $ 8,125 $ 1,500 $ 238,041
Acquisitions 7,640 150 0 7,790
Balance as of June 30, 2021 $ 236,056 $ 8,275 $ 1,500 $ 245,831


	Gross Carrying Amount
	Customer Relationships1		Non-Compete Agreements		Trade Names		Total
Balance as of December 31, 2021	$	251,377	$	9,176	$	1,500	$	262,053
Acquisition	17,950		465		—		18,415
Acquisition adjustment	(4,254)		(701)		—		(4,955)
Balance as of June 30, 2022	$	265,073	$	8,940	$	1,500	$	275,513

Accumulated Amortization
Customer Relationships1
Non-Compete Agreements Trade Names Total
Balance as of December 31, 2020 $ 85,930 $ 5,579 $ 1,500 $ 93,009
Amortization expense 6,344 665 0 7,009
Balance as of June 30, 2021 $ 92,274 $ 6,244 $ 1,500 $ 100,018


	Accumulated Amortization
	Customer Relationships1		Non-Compete Agreements		Trade Names		Total
Balance as of December 31, 2021	$	99,093	$	6,743	$	1,500	$	107,336
Amortization expense	7,513		448		—		7,961
Balance as of June 30, 2022	$	106,606	$	7,191	$	1,500	$	115,297

1 Carrying value as of June 30, ~~2021~~2022 and December 31, ~~2020~~2021 is inclusive of ~~$16,501~~$16,501 of accumulated impairment.

6. Stock Incentive Plans

Stock Incentive Plan

The Company recorded share-based compensation expense as follows for the three and six months ended June 30, 2022 and 2021:


	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Salaries, wages and employee benefits - continuing operations	$	2,884	$	2,463	$	5,306	$	4,732
Salaries, wages and employee benefits - discontinued operation	—		—		—		16
Total share-based compensation expense	$	2,884	$	2,463	$	5,306	$	4,748

In May 2016, the Company adopted the 2016 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) for the issuance of up to 2,000 common shares to employees. As of June 30, 2022, approximately 687 shares remain available for grant under the Omnibus Plan.

Stock Options

Certain executives are eligible to receive grants of stock options. Stock options vest over a three-year period from the date of grant. Share-based compensation expense associated with these awards is amortized ratably over the vesting period. The Company estimates the fair value of the grants using the Black-Scholes option-pricing model.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~

~~6. Stock Incentive Plans~~

~~Stock Incentive Plan~~

~~The Company recorded shared-based compensation expense as follows for the three and six months ended June 30, 2021 and 2020:~~

Three Months Ended Six Months Ended
June 30,
2021 June 30,
2020 June 30,
2021 June 30,
2020
Salaries, wages and employee benefits - continuing operations $ 2,463 $ 2,154 $ 4,732 $ 4,971
Salaries, wages and employee benefits - discontinued operation 0 222 16 410
Total share-based compensation expense $ 2,463 $ 2,376 $ 4,748 $ 5,381

~~In May 2016, the Company adopted the 2016 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) for the issuance of up to 2,000 of common shares to employees. As of June 30, 2021, approximately 797~~ ~~shares remain available for grant under the Omnibus Plan.~~

~~Stock Options~~

Share-based compensation expense associated with stock options is amortized ratably over the vesting period. The Company estimates the fair value of the grants using the Black-Scholes option-pricing model.

~~Stock option transactions during the six months ended June 30, 2021 on a continuing operations basis were as follows:~~

Stock Options Weighted-Average Exercise Price
Outstanding as of January 1, 2021 359 $ 55.79
Granted 39 75.05
Exercised (52) 54.57
Forfeited 0 0
Outstanding as of June 30, 2021 346 $ 58.30

As of June 30, 2021, the total share-based compensation expense related to unvested stock options net yet recognized was $1,002, and the weighted-average period over which it is expected to be recognized is approximately two years.

~~Table of Contents~~

~~Forward Air Corporation~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited and in thousands, except per share data)~~

~~June 30, 2021~~2022

Stock option transactions during the six months ended June 30, ~~2021 on a discontinued operation basis were as follows:~~

Stock Options Weighted-Average Exercise Price
Outstanding as of January 1, 2021 14 $ 52.15
Granted 0 0
Exercised (14) 52.15
Forfeited 0 0
Outstanding as of June 30, 2021 0 $ 0

~~Restricted Shares~~

~~Restricted shares are restricted from sale or transfer until vesting, and restrictions lapse in~~ ~~three~~ equal installments beginning one year after the date of grant. Share-based compensation expense associated with these awards is amortized ratably over the requisite service period. Restricted share transactions during the six months ended June 30, 20212022 on a continuing operations basis were as follows:

Restricted Shares Weighted-Average Grant Date Fair Value
Outstanding as of January 1, 2021 210 $ 62.78
Granted 108 75.28
Vested (98) 61.49
Forfeited (15) 69.91
Outstanding as of June 30, 2021 205 $ 69.31


	Stock Options	Weighted-Average Exercise Price
Outstanding as of January 1	342	$	58.44
Granted	64	106.13
Exercised	(3)	60.42
Forfeited	(6)	106.29
Outstanding as of June 30	397	$	65.32

As of June 30, ~~2021,~~2022, the total share-based compensation expense related to ~~restricted shares~~unvested stock options not yet recognized was ~~$11,227,~~$1,931, and the weighted-average period over which it is expected to be recognized is approximately two years.

Restricted Shares

The Company’s primary long-term incentive plan is a restricted share award plan that entitles employees to receive shares of the Company’s common stock subject to vesting requirements based on continued employment. Shares granted under the restricted share award plan are restricted from sale or transfer until vesting, and the restrictions lapse in three equal installments beginning one year after the date of grant. Dividends are paid in cash on a current basis throughout the vesting period. Share-based compensation expense associated with these awards is amortized ratably over the requisite service period.

Restricted share transactions during the six months ended June 30, ~~2021~~2022 on a ~~discontinued operation~~continuing operations basis were as follows:


		Restricted Shares	Weighted-Average Grant Date Fair Value			Restricted Shares	Weighted-Average Grant Date Fair Value
Outstanding as of January 1, 2021		10	$	61.25
Outstanding as of January 1					Outstanding as of January 1	191	$	69.84
Granted	Granted	0	0		Granted	78	106.11
Vested	Vested	(5)	60.49		Vested	(90)	67.32
Forfeited	Forfeited	(5)	61.92		Forfeited	(17)	81.91
Outstanding as of June 30, 2021		0	$	0
Outstanding as of June 30					Outstanding as of June 30	162	$	87.46

As of June 30, 2022, the total share-based compensation expense related to restricted shares not yet recognized was $11,417, and the weighted-average period over which it is expected to be recognized is approximately two years.

Performance Awards

Performance awards are based on achieving certain financial targets, such as targets for earnings before interest, taxes, depreciation and amortization, and the Company’s total shareholder return as compared to the total shareholder return of a selected peer group, as determined by the ~~Company’s Board of Directors.~~Board. Performance targets are set at the beginning of each three-year measurement period. Share-based compensation expense associated with these awards is amortized ratably over the vesting period. Depending on the financial target, the compensation expense is determined based on the projected assessment of the level of performance that will be achieved. The Company estimates the fair value of the grants with a financial target based on the Company’s total shareholder return using a Monte Carlo simulation model.

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Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

Performance award transactions during the six months ended June 30, ~~2021~~2022 on a continuing operations basis were as follows assuming target levels of performance:


		Performance Awards	Weighted-Average Grant Date Fair Value			Performance Awards	Weighted-Average Grant Date Fair Value
Outstanding as of January 1, 2021		65	$	67.62
Outstanding as of January 1					Outstanding as of January 1	79	$	75.61
Granted	Granted	36	87.33		Granted	14	127.29

Earned	Earned	(11)	72.30		Earned	(7)	63.40
Forfeited or unearned	Forfeited or unearned	(11)	70.22		Forfeited or unearned	(16)	74.79
Outstanding as June 30, 2021		79	$	75.61
Outstanding as of June 30					Outstanding as of June 30	70	$	87.74

As of June 30, ~~2021,~~2022, the total share-based compensation expense related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was ~~$4,621,~~$4,070, and the weighted-average period over which it is expected to be recognized is approximately ~~three~~two years.

Employee Stock Purchase Plan

Under the 2005 Employee Stock Purchase Plan

~~As of June 30, 2021,~~ (the “ESPP”), the Company is authorized to issue up to a remaining ~~330~~318 shares of common stock to ~~employees under the 2005 Employee Stock Purchase Plan (the “ESPP”).~~employees. These shares may be issued at a price equal to 90% of the lesser of the market value on ~~the~~the first day or the last day of each six-month purchase period. Common stock purchases are paid for through periodic payroll deductions and/or up to 2 large lump sum contributions.

Employee stock purchase plan activity and related information was as follows on a continuing operations basis:

Six Months Ended
June 30,
2021 June 30,
2020
Shares purchased by participants under the ESPP 5 6
Average purchase price $ 68.76 $ 44.84
Weighted-average fair value of each purchase right under the ESPP granted ¹ $ 20.99 $ 4.98
Share-based compensation for ESPP shares $ 118 $ 30
¹ Equal to the discount from the market value of the common stock at the end of each six month purchase period.

~~Employee stock purchase plan activity and related information was as follows on a discontinued operation basis:~~


		Six Months Ended					Six Months Ended
		June 30, 2021		June 30, 2020			June 30, 2022		June 30, 2021
Shares purchased by participants under the ESPP	Shares purchased by participants under the ESPP	0		1		Shares purchased by participants under the ESPP	5		5
Average purchase price	Average purchase price	$	0	$	44.84	Average purchase price	$	82.76	$	68.76
Weighted-average fair value of each purchase right under the ESPP granted ¹		$	0	$	4.98
Share-based compensation for ESPP shares		$	0	$	3
Weighted-average fair value of each purchase right under the ESPP granted¹						Weighted-average fair value of each purchase right under the ESPP granted¹	$	9.20	$	20.99
Share-based compensation expense for ESPP						Share-based compensation expense for ESPP	$	42	$	118

¹ Equal to the discount from the market value of the common stock at the end of each six month purchase period.	¹ Equal to the discount from the market value of the common stock at the end of each six month purchase period.					¹ Equal to the discount from the market value of the common stock at the end of each six month purchase period.

~~Table of Contents~~

~~Forward Air Corporation~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(unaudited and in thousands, except per share data)~~

~~June 30, 2021~~

Director Restricted Shares

Under the Amended and Restated Non-Employee Director Stock Plan (the “Amended Plan”), approved in May 2007 and further amended in February 2013 and January 2016, up to 360 of common shares may be issued. As of June 30, ~~2021, approximat~~2022, approxim~~ely 75~~ ately 60 shares re~~shares remain~~main available for grant under the Amended Plan. Under the Amended Plan, each non-employee director receives an annual grant of restricted shares of the Company’s common stock. The restricted shares vest on the either of (a) the day immediately prior to the first annual shareholder meeting that occurs after the grant date or (b) one year after the grant date.

~~Director restricted share transactions during the six months ended June 30, 2021 were as follows:~~

Director Restricted Shares Weighted-Average Grant Date Fair Value
Outstanding as of January 1, 2021 24 $ 42.88
Granted 17 93.39
Vested (26) 47.12
Forfeited 0 0
Outstanding as of June 30, 2021 15 $ 93.46

For the three and six months ended June 30, 2021, the Company recorded $400 and $728, respectively, of share-based compensation expense associated with these grants. For the three and six months ended June 30, 2020, the Company recorded $245 and $506, respectively, of share-based compensation expense associated with these grants. As of June 30, 2021, the total share-based compensation expense related to the restricted shares net yet recognized was $1,221, and the weighted-average period over which it is expected to be recognized is approximately less than one year.

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Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

Director restricted share transactions during the six months ended June 30, 2022 were as follows:


	Director Restricted Shares	Weighted-Average Grant Date Fair Value
Outstanding as of January 1	15	$	93.46
Granted	15	93.70
Vested	(15)	93.46
Forfeited	—	—
Outstanding as of June 30	15	$	93.70

For the three and six months ended June 30, 2022, the Company recorded $380 and $719, respectively, of share-based compensation expense associated with these grants. For the three and six months ended June 30, 2021, the Company recorded $400 and $728, respectively, of share-based compensation expense associated with these grants. As of June 30, 2022, the total share-based compensation expense related to the restricted shares not yet recognized was $1,187, and the weighted-average period over which it is expected to be recognized is approximately less than one year.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2022

7. Indebtedness

AsLong-term debt consisted of the following as of June 30, ~~2021, the Company had $157,500 in borrowings outstanding under the revolving credit facility, $18,326 utilized for outstanding letters of credit~~2022 and ~~$49,174 of available borrowing capacity under the revolving credit facility. As of~~ December 31, 2020, the Company had $112,500 in borrowings outstanding under the revolving credit facility, $18,326 utilized for outstanding letters of credit and $94,174 of available borrowing capacity under the revolving credit facility. The interest rate on the outstanding borrowings under the revolving credit facility was 3.25% as of both June 30, 2021 and June 30, 2020.2021:


	June 30, 2022		December 31, 2021
Credit facility, expires 2026	$	149,250	$	157,500
Debt issuance costs	(476)		(534)
	148,774		156,966

Less: Current portion of long-term debt	(1,495)		(1,500)
Total long-term debt, less current portion	$	147,279	$	155,466

In September 2017, the Company entered into a five-year senior unsecured revolving credit facility (the “Facility”) with a maximum aggregate principal amount of $150,000, with a sublimit of $30,000 for letters of credit and a sublimit of $30,000 for swing line loans. The maturity date of the Facility iswas September 29, 2022. In April 2020, the Company entered into the first amendment to the Facility, which increased the maximum aggregate principal amount to $225,000. The Facility ~~may be~~could have been increased by up to $25,000 to a maximum aggregate principal amount of $250,000 pursuant to the terms of the amended credit agreement, subject to the lenders’ agreement to increase their commitments or the addition of new lenders extending such commitments. In July 2021, the Company entered into the second amendment to the Facility, which extended the maturity date to July 20, 2026 and changed the interest rate options available under the Facility. In December 2021, the Company entered into the third amendment to the Facility, which increased the amount available for borrowing under the Facility to $450,000, consisting of a $300,000 revolving line of credit and a term loan of $150,000. In connection with the third amendment, the Company borrowed $150,000 under the term loan and simultaneously repaid $150,000 on the revolving line of credit from the borrowings received. Under the third amendment, the Facility may be increased by up to $75,000 to a maximum aggregate principal amount of $525,000 pursuant to the terms of the amended credit agreement, subject to the lenders’ agreement to increase their commitments or the addition of new lenders extending such commitments. Such increases to the Facility may be in the form of additional revolving credit loans, term loans or a combination thereof, and are contingent upon there being no events of default under the Facility.

~~Under~~ As of June 30, 2022 and December 31, 2021, the ~~amended Facility, interest accrues on the amounts outstanding~~Company had $279,966 and $272,466 respectively, of available borrowing capacity under the ~~Facility, at the Company’s option, at either (1) London Interbank Offered Rate (“LIBOR~~”) rate, not less than 1.00%, plus a margin ranging from 2.25% to 2.75% based on the Company’s leverage ratio, or (2) base rate, which cannot be less than 3.00%. The base rate is the highest of (i) the federal funds rate, not less than 0, plus 0.50%, (ii) the administrative agent’s prime rate and (iii) the LIBOR rate, not less than 1.00%, plus 1.00%, plus a margin ranging from 0.25% to 0.75% based on the Company’s leverage ratio. Interest is payable in arrears for each loan that is based on the LIBOR rate on the last day of the interest period applicable to each loan, and interest is payable in arrears on loans not based on the LIBOR rate on the last day of each quarter.Facility.

The Facility contains covenants that, among other things, restrict the ability of the Company, without the approval of the required lenders, to engage in certain mergers, consolidations, asset sales, dividends and stock repurchases, investments, and other transactions or to incur liens or indebtedness in excess of agreed thresholds, as set forth in the credit agreement. The Company also has to fulfill financial covenants with respect to a leverage ratio and an interest coverage ratio. As of June 30, ~~2021,~~2022, the Company was in compliance with the aforementioned covenants.

~~In July 2021, the Company entered into the second amendment to the Facility, which extended the maturity date to July 20, 2026 and changed the interest rate options available under the Facility.~~ Under the amended Facility, interest accrues on the amounts outstanding under the Facility at the Company’s option, at either (1) Bloomberg Short-Term Bank Yield Index rate (the “BSBY ~~Rate~~Ra”te”), which cannot be less than 0,zero, plus a margin ranging from 1.25% to 1.75% based on the ~~Company~~’sCompany’s leverage ratio, or (2) the base rate, which cannot be less than 2.00%. The base rate is the highest of (i) the federal funds rate, which cannot be less than 0,zero, plus 0.50%, (ii) the administrative agent’s prime rate and (iii) the BSBY Rate, which cannot be less than 0,zero, plus 1.00%, plus a margin ranging from 0.00% to 0.50% based on the Company’s leverage ratio. ~~In addition,~~Interest is payable in arrears for each loan that is based on the BSBY rate on the last day of the interest period applicable to each loan, and interest is payable in arrears on loans not based on the BSBY rate on the last day of each quarter. The interest rate on the outstanding borrowings under the ~~second amendment,~~Facility was 2.14% as of June 30, 2022 and 3.25% as of June 30, 2021.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, 2022

Previously, under the Facility, ~~may~~interest accrued on the amounts outstanding under the Facility, at the Company’s option, at either (1) London Interbank Offered Rate (“LIBOR”) rate, not less than 1.00%, plus a margin ranging from 2.25% to 2.75% based on the Company’s leverage ratio, or (2) base rate, which cannot be ~~increased~~less than 3.00%. The base rate was the highest of (i) the federal funds rate, not less than zero, plus 0.50%, (ii) the administrative agent’s prime rate and (iii) the LIBOR rate, not less than 1.00%, plus 1.00%, plus a margin ranging from 0.25% to 0.75% based on the Company’s leverage ratio. Interest was payable in arrears for each loan that was based on the LIBOR rate on the last day of the interest period applicable to each loan, and interest was payable in arrears on loans not based on the LIBOR rate on the last day of each quarter.

Letters of Credit

The Company has an arrangement under the Facility to issue letters of credit, which guarantee the Company’s obligations for potential claims exposure for insurance coverage. As of both June 30, 2022 and December 31, 2021, outstanding letters of credit totaled $20,034.

8. Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by updividing net income (loss) by the weighted-average number of common shares outstanding during each period. Restricted shares have non-forfeitable rights to ~~$75,000 to~~dividends and as a ~~maximum aggregate principal amount~~result, are considered participating securities for purposes of ~~$300,000~~computing net income (loss) per common share pursuant to the ~~terms~~two-class method. Diluted net income (loss) per common share assumes the exercise of outstanding stock options and the ~~amended credit agreement, subject to~~vesting of performance share awards using the l~~enders’ agreement to increase their commitments or~~treasury stock method when the ~~addition~~effects of ~~new lenders extending~~ such ~~commitments. Such increases to the Facility may be in the form of additional revolving credit loans, term loans or a combination thereof, and~~assumptions are ~~contingent upon there being no events of default under the Facility.~~dilutive.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

~~8. Net Income (Loss) Per Share~~

A reconciliation of net income (loss) attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share during the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 is as follows:


		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021

Numerator:	Numerator:									Numerator:
Net income and comprehensive income from continuing operations	Net income and comprehensive income from continuing operations	$	30,677	$	9,225	$	47,391	$	20,641	Net income and comprehensive income from continuing operations	$	55,430	$	30,677	$	98,116	$	47,391
Net loss and comprehensive loss from discontinued operation	Net loss and comprehensive loss from discontinued operation	0		(6,071)		(5,533)		(9,112)		Net loss and comprehensive loss from discontinued operation	—		—		—		(5,533)
Net income attributable to Forward Air	Net income attributable to Forward Air	$	30,677	$	3,154	$	41,858	$	11,529	Net income attributable to Forward Air	$	55,430	$	30,677	$	98,116	$	41,858

Income allocated to participating securities from continuing operations										Income allocated to participating securities from continuing operations	(346)		(256)		(541)		(363)
Loss allocated to participating securities from discontinued operation										Loss allocated to participating securities from discontinued operation	—		—		—		—
Income allocated to participating securities	Income allocated to participating securities	(256)		(13)		(363)		(83)		Income allocated to participating securities	(346)		(256)		(541)		(363)

Numerator for basic and diluted net income per share for continuing operations	Numerator for basic and diluted net income per share for continuing operations	$	30,421	$	9,212	$	47,028	$	20,558	Numerator for basic and diluted net income per share for continuing operations	$	55,084	$	30,421	$	97,575	$	47,028
Numerator for basic and diluted net loss per share for discontinued operation	Numerator for basic and diluted net loss per share for discontinued operation	$	0	$	(6,071)	$	(5,533)	$	(9,112)	Numerator for basic and diluted net loss per share for discontinued operation	$	—	$	—	$	—	$	(5,533)

Denominator:	Denominator:									Denominator:
Denominator for basic net income per share - weighted-average number of common shares outstanding	Denominator for basic net income per share - weighted-average number of common shares outstanding	27,261		27,695		27,309		28,424		Denominator for basic net income per share - weighted-average number of common shares outstanding	26,869		27,261		26,911		27,309
Dilutive stock options and performance share awards	Dilutive stock options and performance share awards	154		31		145		67		Dilutive stock options and performance share awards	120		154		136		145
Denominator for diluted net income per share - weighted-average number of common shares and common share equivalents outstanding	Denominator for diluted net income per share - weighted-average number of common shares and common share equivalents outstanding	27,415		27,726		27,454		28,491		Denominator for diluted net income per share - weighted-average number of common shares and common share equivalents outstanding	26,989		27,415		27,047		27,454

Basic net income (loss) per share:	Basic net income (loss) per share:									Basic net income (loss) per share:
Continuing operations	Continuing operations	$	1.12	$	0.33	$	1.72	$	0.72	Continuing operations	$	2.05	$	1.12	$	3.63	$	1.72
Discontinued operation	Discontinued operation	0		(0.22)		(0.20)		(0.31)		Discontinued operation	—		—		—		(0.20)
Net income per basic share	Net income per basic share	$	1.12	$	0.11	$	1.52	$	0.41	Net income per basic share	$	2.05	$	1.12	$	3.63	$	1.52

Diluted net income (loss) per share:	Diluted net income (loss) per share:									Diluted net income (loss) per share:
Continuing operations	Continuing operations	$	1.11	$	0.33	$	1.71	$	0.72	Continuing operations	$	2.04	$	1.11	$	3.61	$	1.71
Discontinued operation	Discontinued operation	0		(0.22)		(0.20)		(0.32)		Discontinued operation	—		—		—		(0.20)
Net income per diluted share	Net income per diluted share	$	1.11	$	0.11	$	1.51	$	0.40	Net income per diluted share	$	2.04	$	1.11	$	3.61	$	1.51

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

The number of shares that were not included in the calculation of net income (loss) per diluted share because to do so would have been anti-dilutive for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


		Three Months Ended		Six Months Ended			Three Months Ended		Six Months Ended
		June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020		June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Anti-dilutive stock options	Anti-dilutive stock options	0	268	39	218	Anti-dilutive stock options	57	—	57	39
Anti-dilutive performance shares	Anti-dilutive performance shares	0	18	0	29	Anti-dilutive performance shares	13	—	13	—
Anti-dilutive restricted shares and deferred stock units	Anti-dilutive restricted shares and deferred stock units	0	177	15	95	Anti-dilutive restricted shares and deferred stock units	—	—	—	15
Total anti-dilutive shares	Total anti-dilutive shares	0	463	54	342	Total anti-dilutive shares	70	—	70	54

9. Income Taxes

For the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company recorded income tax expense of ~~$14,969~~$32,803 and ~~$6,995,~~$14,969, respectively, for continuing operations. The effective tax rate of 25.1% for the six months ended June 30, 2022 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards. The effective tax rate of 24.0% for the six months ended June 30, 2021 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards. The effective tax rate of 25.3% for the six months ended June 30, 2020 varied from the statutory United States federal income tax rate of 21% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards and a refund for Tennessee tax credits.

The Company recognizes income tax benefits from uncertain tax positions where the realization of the ultimate benefit is uncertain. As of both June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had ~~$544~~$241 of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized. ~~The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes.~~ As of both June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had accrued interest and penalties related to unrecognized tax benefits of ~~$168.~~$88. With a few exceptions, the Company is no longer subject to U.S. federal, state and local, or Canadian examinations by tax authorities for years before ~~2013.~~2014.

The sale of Pool resulted in a capital loss in the amount of ~~$2,426. The capital loss~~$4,230, which expires in 2026. The Company concluded that it was more likely than not the capital loss carryforward will not be realized and therefore, established a valuation allowance of ~~$2,426~~$4,230 to reserve against its capital loss carryforward. The Company also maintains a valuation allowance to reserve against its state net operating loss ~~carryforwards.~~carryforwards of $395. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company assessed the likelihood that its deferred tax assets would be recovered from estimated future taxable income and available tax planning strategies. In making this assessment, all available evidence was considered including economic climate, as well as reasonable tax planning strategies. The Company believes it is more likely than not that it will realize its remaining net deferred tax assets, net of the valuation allowance, in future years.

10. Fair Value of Financial Instruments

The Company categorizes its assets and liabilities into one of three levels based on the assumptions used in valuing the asset or liability. Estimates of fair value financial assets and liabilities are based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Model-derived valuations in which one or more significant inputs are unobservable.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

As previously discussed in Note 4, Acquisitions, the estimated fair value of the earn-out liability was determined using ~~either the Monte-Carlo simulation model or~~ the option pricing method. The significant inputs used to calculate the estimated fair value are derived from a combination of observable and unobservable market data. Observable inputs used in ~~either the Monte Carlo simulation model or~~ the option pricing method include the risk-free rate and the revenue volatility while unobservable inputs include the revenue discount rate and the estimated revenue projections.

Assets and liabilities measured at fair value on a recurring basis as of June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized below:

As of June 30, 2021
Level 1 Level 2 Level 3 Total
Earn-out liability $ 0 $ 0 $ 7,309 $ 7,309
As of December 31, 2020
Level 1 Level 2 Level 3 Total
Earn-out liability $ 0 $ 0 $ 6,865 $ 6,865


	As of June 30, 2022
	Level 1		Level 2		Level 3		Total
Earn-out liability	$	—	$	—	$	—	$	—

	As of December 31, 2021
	Level 1		Level 2		Level 3		Total
Earn-out liability	$	—	$	—	$	385	$	385

Cash and cash equivalents, accounts receivable, other receivables, and accounts payable are valued at their carrying amounts in the Company’s Condensed Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial instruments.

The carrying amount of long-term debt under the Company’s credit facility ~~approximate~~approximates fair value based on the borrowing rates currently available to the Company for a loan with similar terms and average maturity.

As of June 30, 2022, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $16,386, compared to its carrying value of $16,769. As of December 31, 2021, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was ~~$6,192,~~$14,312, compared to its carrying value of ~~$6,168. As of December 31, 2020, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $7,009, compared to its carrying value of $6,811.~~

$14,159.

11. Shareholders’ Equity

Cash Dividends

During the first and second quarters of 2022, the Board declared and the Company has paid a quarterly cash dividend of $0.24 per common share. During each quarter of 2021, ~~first quarter of 2021 and the fourth quarter of 2020,~~ the Company’s Board of Directors declared and the Company has paid a quarterly cash dividend of $0.21 per ~~share of~~ common ~~stock.~~share.

On July ~~27, 2021,~~26, 2022, the ~~Company's~~ Board ~~of Directors~~ declared a quarterly cash dividend of ~~$0.21~~$0.24 per common share that will be paid in the third quarter of ~~2021.~~2022.

Share Repurchase Program

~~On July 21, 2016, the Company’s Board of Directors approved a stock repurchase program for up to 3,000 shares of the Company’s common stock (the “2016 Repurchase Plan~~”). On February 5, 2019, the Board ~~of Directors canceled the Company’s 2016 Repurchase Plan and~~ approved a ~~revised~~ stock repurchase plan authorizing the repurchase of up to 5,000 shares of the Company’s common stock (the “2019 Repurchase Plan”). The 2019 Repurchase Plan expires when the shares authorized for repurchase are exhausted or the 2019 Repurchase Plan is canceled.

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

During the six months ended June 30, 2022, the Company repurchased through open market transactions 176 shares of common stock for $17,780, or an average of $100.86 per share, and during the six months ended June 30, 2021, the Company repurchased through open market transactions 366 shares of common stock for $33,992, or ~~$92.76 per share, and during the six months ended June 30, 2020, the Company repurchased 268 shares~~an average of ~~common stock for $15,259, or $56.93~~$92.76 per share. All shares received were retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained Earnings” in the Condensed Consolidated Balance Sheets.

As of June 30, ~~2021,~~2022, the remaining shares permitted to be repurchased under the 2019 Repurchase Plan were approximately ~~3,002~~2,657 shares.

12. Commitments and Contingencies

Contingencies

The Company is party to various legal claims and actions incidental to its business, including claims related to vehicle liability, workers’ compensation, property damage and employee medical benefits. ~~We accrue~~The Company accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Based on the knowledge of the facts, ~~management~~the Company believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on ~~our condensed consolidated financial statements.~~its Condensed Consolidated Financial Statements. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and related events unfold.

Insurance coverage provides the Company with primary and excess coverage for claims related to vehicle liability, workers’ compensation, property damage and employee medical benefits.

For vehicle liability, the Company retains a portion of the risk. Below is a summary of the Company’s risk retention on vehicle liability insurance coverage maintained by the Company through $10,000:

Company
Risk Retention

Frequency

Layer

Policy Term

Expedited Freight¹

LTL business

3,000

Occurrence/Accident²

$0 to $3,000

10/1/~~2020~~2021 to 10/1/~~2021~~2022

Truckload business

2,000

Occurrence/Accident²

$0 to $2,000

10/1/~~2020~~2021 to 10/1/~~2021~~2022

LTL ~~and Truckload businesses~~business

6,000

Policy Term Aggregate³

$3,000 to $5,000

10/1/~~2020~~2021 to 10/1/~~2021~~2022

LTL, Truckload and ~~Truckload~~Intermodal businesses

~~5,000~~2,500

Policy Term Aggregate³

$5,000 to $10,000

10/1/~~2020~~2021 to 10/1/~~2021~~2022

Intermodal

~~250~~1,000

Occurrence/Accident²

$0 to ~~$250~~$1,000

4/10/1/~~2020~~2021 to 10/1/~~2021~~2022

¹ Excluding the Final Mile business, which is primarily a brokered service.

² For each and every accident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident.

³ During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will respond.

Also, from time to time, when brokering freight, the Company may face claims for the “negligent selection” of outside, contracted carriers that are involved in accidents, and the Company maintains third-party liability insurance coverage with a $100 deductible per occurrence for most of its brokered services. Additionally, the Company maintains workers’ compensation insurance with a self-insured retention of $500 per occurrence.

Insurance coverage in excess of the self-insured retention limit is an important part of the Company’s risk management process. The Company accrues for the costs of the uninsured portion of pending claims within the self-insured retention based on the nature and severity of individual claims and historical claims development trends. The Company believes the recorded reserves are sufficient for all incurred claims up to the self-insured retention limits, including an estimate for claims incurred

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Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

~~limits, including an~~but not reported. However, estimating the number and severity of claims, as well as related judgment or settlement amounts is inherently difficult, and the Company may fail to establish sufficient insurance reserves and adequately estimate for ~~claims incurred but not reported.~~future insurance claims. Since the ultimate resolution of outstanding claims as well as claims incurred but not reported is uncertain, it is possible that the reserves recorded for these losses could change materially in the near term. ~~However,~~Although, an estimate cannot be made of the range of additional loss that is at least reasonably possible.

13. Segment Reporting

The Company has 2 reportable segments: Expedited Freight and Intermodal. The Company evaluates segment performance based on income from operations. Segment results include intersegment revenues and shared costs. Costs related to the corporate headquarters, shared services and shared assets, such as trailers, are allocated to each segment based on usage. Shared assets are not allocated to each segment, but rather the shared assets, such as trailers, are allocated to the Expedited Freight segment. Corporate includes revenues and expenses as well as assets that are not attributable to any of the Company’s reportable segments.

The accounting policies applied to each segment are the same as those described in the Summary of Significant Accounting Policies as disclosed in Note 1 to the Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, except for certain self-insurance loss reserves related to vehicle liability and workers’ compensation. Each segment is allocated an insurance premium and deductible that corresponds to the self-insured retention limit for that particular segment. Any self-insurance loss exposure beyond the deductible allocated to each segment is recorded in Corporate.

~~Segment results from operations for the three and six months ended June 30, 2021 and 2020 are as follows:~~

Three Months Ended June 30, 2021
Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations
External revenues $ 351,551 $ 69,120 $ 0 $ — $ 420,671
Intersegment revenues 184 13 0 (197) 0
Depreciation 4,989 835 23 0 5,847
Amortization 1,790 1,777 0 0 3,567
Income (loss) from continuing operations 34,688 8,386 (950) 0 42,124
Purchases of property and equipment 5,724 156 0 0 5,880
Three Months Ended June 30, 2020
Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations
External revenues $ 235,417 $ 46,420 $ 0 $ — $ 281,837
Intersegment revenues 241 8 0 (408) (159)
Depreciation 5,009 1,081 25 0 6,115
Amortization 1,731 1,567 0 0 3,298
Income (loss) from continuing operations 11,753 4,413 (2,252) 0 13,914
Purchases of property and equipment 11,545 18 0 0 11,563

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Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022

Six Months Ended June 30, 2021
Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations
External revenues $ 655,308 $ 127,622 $ 0 $ — $ 782,930
Intersegment revenues 613 25 0 (695) (57)
Depreciation 9,982 1,634 26 0 11,642
Amortization 3,595 3,414 0 0 7,009
Income (loss) from continuing operations 59,218 12,895 (7,265) 0 64,848
Purchases of property and equipment 8,136 439 0 0 8,575
Six Months Ended June 30, 2020
Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations
External revenues $ 488,560 $ 98,875 $ 0 $ — $ 587,435
Intersegment revenues 727 13 0 (940) (200)
Depreciation 9,916 2,134 43 0 12,093
Amortization 3,519 3,135 0 0 6,654
Income (loss) from continuing operations 26,933 8,126 (5,372) 0 29,687
Purchases of property and equipment 13,950 264 0 0 14,214
Total Assets
As of June 30, 2021 $ 767,222 $ 209,266 $ 105,459 $ (106) $ 1,081,841
As of December 31, 2020 905,081 221,963 47,641 (201,391) 973,294
Segment results from operations for the three and six months ended June 30, 2022 and 2021 are as follows:

~~A reconciliation from the segment information to the consolidated balances for revenues and total assets is set forth below:~~

Three Months Ended Six Months Ended
June 30,
2021 June 30,
2020 June 30,
2021 June 30,
2020
Intersegment revenues - continuing operations $ 0 $ (159) $ (57) $ (200)
Intersegment revenues - discontinued operation 0 159 57 200
Consolidated intersegment revenues $ — $ — $ — $ —

June 30, 2021 December 31, 2020
Segment assets - continuing operations $ 1,081,841 $ 973,294
Current assets held for sale 0 21,002
Noncurrent assets held for sale 0 53,097
Consolidated total assets $ 1,081,841 $ 1,047,393



	Three Months Ended June 30, 2022
	Expedited Freight		Intermodal		Corporate		Eliminations		Consolidated - Continuing Operations
External revenues	$	408,814	$	106,405	$	—	$	—	$	515,219
Intersegment revenues	43		6		—		(49)		—
Depreciation	6,007		1,644		62		—		7,713
Amortization	1,810		2,072		—		—		3,882
Income (loss) from continuing operations	63,107		15,249		(2,811)		—		75,545
Purchases of property and equipment	8,765		—		—		—		8,765

	Three Months Ended June 30, 2021
	Expedited Freight		Intermodal		Corporate		Eliminations		Consolidated - Continuing Operations
External revenues	$	351,551	$	69,120	$	—	$	—	$	420,671
Intersegment revenues	184		13		—		(197)		—
Depreciation	4,989		835		23		—		5,847
Amortization	1,790		1,777		—		—		3,567
Income (loss) from continuing operations	34,688		8,386		(950)		—		42,124
Purchases of property and equipment	5,724		156		—		—		5,880

	Six Months Ended June 30, 2022
	Expedited Freight		Intermodal		Corporate		Eliminations		Consolidated - Continuing Operations
External revenues	$	785,340	$	196,840	$	—	$	—	$	982,180
Intersegment revenues	108		11		—		(119)		—
Depreciation	11,679		2,984		101		—		14,764
Amortization	3,619		4,342		—		—		7,961
Income (loss) from continuing operations	110,787		26,395		(4,286)		—		132,896
Purchases of property and equipment	17,721		952		—		—		18,673

	Six Months Ended June 30, 2021
	Expedited Freight		Intermodal		Corporate		Eliminations		Consolidated - Continuing Operations
External revenues	$	655,308	$	127,622	$	—	$	—	$	782,930
Intersegment revenues	613		25		—		(695)		(57)
Depreciation	9,982		1,634		26		—		11,642
Amortization	3,595		3,414		—		—		7,009
Income (loss) from continuing operations	59,218		12,895		(7,265)		—		64,848
Purchases of property and equipment	8,136		439		—		—		8,575

Table of Contents

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

June 30, ~~2021~~2022













	Expedited Freight		Intermodal		Corporate		Eliminations		Consolidated - Continuing Operations






Total Assets
As of June 30, 2022	$	798,352	$	300,035	$	98,764	$	(8)	$	1,197,143
As of December 31, 2021	777,987		249,467		90,588		(219)		1,117,823

A reconciliation from the segment information to the consolidated balances for revenues is set forth below:


	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Intersegment revenues - continuing operations	$	—	$	—	$	—	$	(57)
Intersegment revenues - discontinued operation	—		—		—		57
Consolidated intersegment revenues	$	—	$	—	$	—	$	—

Revenue from the individual services within the Expedited Freight segment for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021

Expedited Freight revenues:	Expedited Freight revenues:									Expedited Freight revenues:
Network	Network	$	210,088	$	134,173	$	388,715	$	286,182	Network	$	263,425	$	210,088	$	506,839	$	388,715
Truckload	Truckload	56,968		41,857		109,348		89,384		Truckload	60,144		56,968		116,052		109,348
Final Mile	Final Mile	69,883		53,427		132,139		101,229		Final Mile	73,028		69,883		138,786		132,139
Other	Other	14,796		6,201		25,719		12,492		Other	12,260		14,796		23,771		25,719
Total	Total	$	351,735	$	235,658	$	655,921	$	489,287	Total	$	408,857	$	351,735	$	785,448	$	655,921


Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

We are a leading asset-light freight ~~and logistics company providing~~provider of transportation services, including less-than-truckload (“LTL”), truckload, final mile ~~truckload~~ and intermodal drayage services across the United States and in Canada. We offer premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling. We utilize an asset-light strategy to minimize our investments in equipment and facilities and to reduce our capital expenditures.

Our services are classified into two reportable segments: Expedited Freight and Intermodal.

~~Through the~~Our Expedited Freight segment ~~we operate a comprehensive national network to provide~~provides expedited regional, inter-regional and national LTL services. Expedited Freight also offers customers local pick-up and delivery and other services including final mile, truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling. We plan to grow our LTL and final mile geographic footprints through greenfield start-ups as well as through acquisitions.

Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads. Intermodal also offers dedicated contract and ~~container freight station~~Container Freight Station (“CFS”) warehouse and handling ~~services. Intermodal operates primarily~~services, and in ~~the Midwest~~select locations, linehaul and ~~Southeast, with smaller operational presence in Southwest and Mid-Atlantic United States.~~LTL services. We plan to grow ~~Intermodal’s~~our Intermodal geographic footprint through acquisitions as well as greenfield start-ups where ~~we do not have an acceptable~~no suitable acquisition ~~target.~~is available.

Our operations, particularly our network of hubs and terminals, represent substantial fixed costs. Consequently, our ability to increase our earnings depends in significant part on our ability to increase the amount of freight and the revenue per pound or shipment for the freight shipped or moved through our ~~networks and to grow~~network. Additionally, our earnings depend on the growth of other services, such as LTL pickup and delivery, ~~final mile solutions and intermodal services,~~ which will allow us to maintain revenue growth in a challenging ~~shipping environments. In addition, we are continuing~~freight environment. We continue to execute synergies across our services, particularly with ~~service offerings~~services offered in the Expedited Freight reportable segment. Synergistic opportunities include the ability to share resources, particularly our fleet resources.

We monitor and analyze a number of key operating statistics in order to manage our business and evaluate our financial and operating performance. These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight and Intermodal reportable segments. Our key operating statistics should not be interpreted as better measurements of our results than income from operations as determined under U.S. generally accepted accounting principles.

Within our Expedited Freight reportable segment, our primary revenue focus is to increase density, which is shipment and tonnage growth within our existing LTL network. Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations including linehaul load factor, pickup and delivery (“P&D”) stops per hour, P&D shipments per hour and door pounds handled per hour. In addition to our focus on density and operating efficiencies, it is critical for us to obtain an appropriate yield, which is measured as revenue per hundredweight, on the shipments we handle to offset our cost inflation and support our ongoing investments in capacity and technology. Revenue per hundredweight is also a commonly-used indicator for general pricing trends in the LTL industry and can be influenced by many other factors, such as changes in fuel surcharges, weight per shipment and length of haul. Therefore, changes in revenue per hundredweight may not necessarily indicate actual changes in underlying base rates. We regularly monitor the components of our pricing, including base freight rates, accessorial charges and fuel surcharges. The fuel surcharge is generally designed to offset fluctuations in the cost of our petroleum-based products and is indexed to diesel fuel prices published by the U.S. Department of Energy. We believe our yield management process focused on account level profitability, and ongoing improvements in operating efficiencies, are both key components of our ability to grow profitably.

The key operating statistics necessary to understand the operating results of our Expedited Fright reportable segment are described below in more detail:

Tonnage - Total weight of shipments in pounds. The level of freight tonnage is affected by economic cycles and conditions, customers’ business cycles, changes in customers’ business practices and capacity in the truckload market.

Weight Per Shipment - Total pounds divided by the number of shipments. Fluctuations in weight per shipment can indicate changes in the mix of freight we receive from our customers, as well as changes in the number of units included in a shipment. Generally, increases in weight per shipment indicate higher demand and overall increased economic activity. Changes in weight per shipment can also be influenced by shifts between LTL and other modes of

transportation, such as truckload, in response to capacity, service and pricing issues. Fluctuations in weight per shipment generally have an inverse effect on our revenue per hundredweight, as a decrease in weight per shipment will typically cause an increase in revenue per hundredweight.

Revenue Per Hundredweight - Network revenue per every 100 pounds of shipment weight. Our LTL transportation services are generally priced based on weight, commodity, and distance. Our pricing policies are reflective of the services we provide, and can be influenced by competitive market conditions. Changes in the freight profile factors such as average shipment size, average length of haul, freight density, and customer and geographic mix can impact the revenue per hundredweight. Fuel surcharges and intercompany revenue between Network and Truckload are included in this measurement.

Revenue Per Shipment - Network revenue divided by the number of shipments. Fuel surcharges and intercompany revenue between Network and Truckload are included in this measurement.

Average Length of Haul - Total miles between origin and destination service centers for all shipments, with miles based on the size of shipments. Length of haul is used to analyze our tonnage and pricing trends for shipments with similar characteristics. Changes in length of haul generally have a direct effect on our revenue per hundredweight, as an increase in length of haul will typically cause an increase in revenue per hundredweight.

Within our Intermodal reportable segment, our primary revenue focus is to increase the number of shipments. The key operating statistic necessary to understand the operating results of our Intermodal reportable segment is described below in more detail:

Drayage Revenue Per Shipment - Intermodal revenue divided by the number of drayage shipments. Revenue derived from container freight station warehouse and handling, and linehaul and LTL services is excluded from this measurement. Fuel surcharges and accessorial charges are included in this measurement.

On April 23, 2020, our Board of Directors (the “Board”) approved a strategy to divest of the Pool Distribution business (“Pool”) ~~on April 23, 2020,~~, and the sale of Pool was completed on February 12, 2021. Pool provided high-frequency handling and distribution of time sensitive product to numerous destinations within a specific geographic region. ~~Pool offered this service throughout~~As a result of the ~~Mid-Atlantic, Southeast, Midwest and Southwest United States. Accordingly,~~strategy to divest of Pool, the results of operations for Pool ~~have been~~were presented as a discontinued operation in our Condensed Consolidated Statements of Comprehensive Income for ~~all period presented. In addition, the assets and liabilities were presented as held for sale in the Condensed Consolidated Balance Sheets for~~ the prior period. Unless otherwise noted, amounts, percentages and discussion for ~~all periods~~the prior period reflect the results of operations, financial condition and cash flows from our continuing operations. Refer to Note 4,3, Discontinued Operation ~~and Held for Sale~~, to ~~the~~ our Condensed Consolidated Financial Statements for ~~additional information on our discontinued operation.~~further discussion.

Trends and Developments

COVID-19

Our business is highly susceptible to changes in ~~the~~ economic conditions. Our products and services are directly tied to the production and sale of goods and, more generally, to the North American economy. The COVID-19 pandemic ~~has~~ adversely impacted economic activity and conditions worldwide and created significant volatility and disruption to the financial markets. Efforts to control the spread of COVID-19 led governments and other authorities to impose restrictions which resulted in business closures and disrupted supply chains worldwide. As a result, transportation and supply chain companies such as ours experienced slowdowns and reduced demand for our services.

Although our business and operations have returned to pre-COVID levels, the situation surrounding COVID-19 and its variants remains fluid and may be further impacted by the policies of President Biden’s administration, the availability and success of a vaccine and vaccination rates. The extent to which outbreaks of COVID-19 and its variants impacts our business, results of operations and financial condition in ~~2021~~2022 will depend on future developments, which are highly uncertain and cannot be predicted by, including, but not limited to the duration, spread, severity and impact of the COVID-19 outbreak, including the new variants, the effects of the outbreak on our customers and suppliers and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume.

In addition, although we believe we have sufficient capital and liquidity to manage our business over the short- and long-term, our liquidity may be materially affected if conditions in the credit and financial markets deteriorate as a result of COVID-19 including failure by us or our customers to secure any necessary financing in a timely manner.

~~Intermodal Acquisition~~

Labor Shortages

~~As part~~Like many other businesses affected by current macroeconomic conditions, we are experiencing a labor shortage relating to our employee drivers, terminal and dock workers and otherwise throughout our business and operations. We are also operating in an environment where competition is intense for independent fleet owner-operators, creating shortages in the marketplace. These factors have adversely affected our operations, by increasing our operational costs for labor and purchased transportation. The steps we have taken to address these shortages include paying sign-on bonuses, and offering enhanced wages in select competitive markets. These measures have increased costs in certain areas of our business. We will continue our efforts to mitigate the effects of the ~~inorganic growth strategy,~~labor shortages and other inflationary conditions through similar actions.

Fuel

We depend heavily upon the availability of adequate diesel fuel supplies, and recently, fuel availability and prices have fluctuated significantly. Fuel availability and prices can be impacted by factors beyond our control, such as natural or man-made disasters, adverse weather conditions, political events, economic sanctions imposed against oil-producing countries or specific industry participants, disruptions or failure of technology or information systems, price and supply decisions by oil producing countries and cartels, terrorist activities, armed conflict, tariffs, sanctions, other changes to trade agreements and world supply and demand imbalance. Through our fuel surcharge programs, we have been able to mitigate the impact of fluctuations in ~~February 2021, we acquired certain assets and liabilities of Proficient Transport Incorporated and Proficient Trucking, Inc. (together “Proficient Transport~~”~~) for $15,510 and a potential earn-out up to $2,000. The estimated fair value of the earn-out liability on the date of acquisition was $829. The fair value was~~fuel prices. Our fuel surcharge rates are set weekly based on the ~~estimated one-year performance~~national average for fuel prices as published by the U.S. Department of Energy and our fuel surcharge table. In periods of changing fuel prices, our fuel surcharges vary by different degrees and may not fully offset fuel price fluctuations or may result in higher than expected increases in revenue. Fuel shortages, changes in fuel prices, and the potential volatility in fuel surcharge revenue may impact our results of operations and overall profitability. Fuel surcharge revenue as a percentage of operating revenues increased to 18.4% for the three months ended June 30, 2022 compared to 11.6% for the three months ended June 30, 2021, as a result of the ~~acquired customer revenue and was calculated using the option pricing method. Proficient Transport is an intermodal drayage company headquartered~~changes in Chicago, Illinois. The acquisition of Proficient Transport will expand our intermodal footprint in Georgia, Illinois, North Carolina, and Texas, and will introduce a new location in Ohio. The acquisition was funded using cash flows from operations. The results of Proficient Transport have been included in our Condensed Consolidated Financial Statements as of and from the date of acquisition.

~~Expedited Freight Acquisition~~

In May 2021, we acquired certain assets and liabilities of J&P Hall Express Delivery (“J&P”) for $7,543. J&P is headquartered in Atlanta, Georgia with a second terminal in Albany, Georgia. The acquisition of J&P supports our strategic growth plan by expanding pickup and delivery, less than truckload, truckload, less than container load, container freight station warehousing, and airport transfer services across the Southeastern United States. The acquisition was funded using cash flow from operations. The results of J&P have been included in our Condensed Consolidated Financial Statements as of and from the date of acquisition.

~~Sale of Pool~~

On February 12, 2021, we sold Pool for an $8,000 cash payment and up to a $12,000 earn-out based on 2021 earnings before interest, taxes, depreciation and amortization attainment, beginning February 1, 2021. The estimated fair value of the earn-out on the date of sale was $6,967, and was calculated based on the estimated performance of Pool using a Monte Carlo simulation model. A loss on the sale of Pool in the amount of $2,860 was recorded in discontinued operation.fuel prices.

Environmental Protection and Community Support

We embrace a comprehensive definition of sustainability that addresses Environmental, Social, and Governance factors (“ESG”). ~~In 2019,~~To our ~~Board amended the Corporate Governance~~employees, our communities, our customers, our suppliers, and ~~Nominating (“CG&N”) Committee Charter to ensure Board oversight of~~ our ~~efforts related to environmental, social, and governance matters, and management of sustainability-related risks and opportunities. At least twice a year, the CG&N Committee is updated on~~investors, each ~~of these topics and provides feedback and recommendations that it deems appropriate.~~impact area matters.

~~In 2020, we created and staffed~~The following are the Head of Corporate ESG role to provide oversight of our ESG vision, strategic planning, performance management and improvement activities. Shortly after, we initiated an ESG market analysis and benchmarking exercise that explored the ESG issues that most impact transportation and logistics industries and marketplaces.

We began in 2020 to conduct an ESG assessment, starting with a third-party stakeholder assessment that served as a basis for identifying and prioritizing ESG topics most relevant to our industry, our business, and our stakeholders. The assessment’s findings yielded initial topics that we recognized as important. We followed with a more in-depth assessment of risks and opportunities, utilizing Sustainable Accounting Standards Board (“SASB”) standards as a guide, in order to further refine our disclosure topics and gain stakeholder alignment. This more detailed assessment yielded clarity of our ESG topics and prioritization based on the degree of both qualitative and quantitative impact to our business.

~~We identified~~ ten ESG topic priority areas we identified relevant to our business and ~~mapped each~~the foundation for our sustainability approach:

•Roadway Health and Safety; Workplace Health and Safety; Independent Contractor Practices; Diversity and Inclusion Practices; Community Impact and Partnerships; Measure and Disclose; Information Security; Responsible Supplier Practices; Green House Gas (“GHG”) Emissions Reduction Practices; and Air Quality Practices

We are committed to ~~widely adopted ESG reporting standards as identified~~supporting and giving back to the communities where we live and work, particularly through the support of our employee Veterans, and to the community of Veterans in North America. We continue to support our Veterans through our charitable organization, Operation: Forward Freedom, a manifestation of our ongoing commitment to Veteran-related causes. Operation Forward Freedom’s largest fundraising event was The Inaugural Drive for Hope Golf tournament. The Drive For Hope Golf Tournament which took place on May 19, 2022 was a huge success, raising $375,000 for injured service members and veterans.

In addition, we partner with non-profit organizations that positively impact our communities and our industry. Through our partnership with Truckers Against Trafficking, we have conducted training for over-the-road drivers to educate and equip them with the tools needed to combat human trafficking. We also partner with Women in Trucking to encourage and promote the employment of women within our industry. Our team of drivers is currently comprised of 15% women, roughly twice the U.S. industry average, and we continue to seek opportunities to improve upon that percentage.

We are committed to promoting a healthier natural environment by ~~SASB. Within these ten topic areas, we identified specific related risks~~striving for continuous environmental improvements in all aspects of our business. We are currently reducing emissions and ~~opportunities,~~energy consumption through several ongoing programs and ~~aligned on improvement activities.~~ are committed to tracking and reducing our GHG emissions and improving energy efficiency. We are also aligning with industry certifications, continuing to be a SmartWay certified company. SmartWay is a certification from the U.S. Environmental Protection Agency (“EPA”) verifying company compliance with EPA regulations, including fuel efficiency ranges and emission standards.

In ~~first quarter of~~ 2021, we published our first ESG ~~report that describes~~Report outlining our commitments and associated focus areas. Since publication, we have been focused on data aggregation. In our future reporting, we will incorporate data requirements identified by widely accepted sustainability ~~focus~~frameworks and ~~plan.~~set measurable targets and goals for our priority areas. We are committed to making our results count across the country and will continue to update our future disclosures accordingly.

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Results from Operations

The following table sets forth our consolidated financial data ~~from operations~~ for the three months ended June 30, ~~2021~~2022 and ~~2020~~2021 (unaudited and in thousands):

Three Months Ended
June 30, 2021 June 30, 2020 Change Percent Change
Operating revenues:
Expedited Freight $ 351,735 $ 235,658 $ 116,077 49.3 %
Intermodal 69,133 46,428 22,705 48.9
Eliminations and other operations (197) (408) 211 (51.7)
Operating revenues 420,671 281,678 138,993 49.3
Operating expenses:
Purchased transportation 215,217 142,069 73,148 51.5
Salaries, wages, and employee benefits 84,641 63,772 20,869 32.7
Operating leases 20,370 17,387 2,983 17.2
Depreciation and amortization 9,414 9,413 1 —
Insurance and claims 10,891 7,722 3,169 41.0
Fuel expense 4,059 2,519 1,540 61.1
Other operating expenses 33,955 24,882 9,073 36.5
Total operating expenses 378,547 267,764 110,783 41.4
Income (loss) from continuing operations:
Expedited Freight 34,688 11,753 22,935 195.1
Intermodal 8,386 4,413 3,973 90.0
Other Operations (950) (2,252) 1,302 (57.8)
Income from continuing operations 42,124 13,914 28,210 202.7
Other expense:
Interest expense (1,323) (1,198) (125) 10.4
Total other expense (1,323) (1,198) (125) 10.4
Income from continuing operations before income taxes 40,801 12,716 28,085 220.9
Income tax expense 10,124 3,491 6,633 190.0
Net income from continuing operations 30,677 9,225 21,452 232.5
Loss from discontinued operations, net of tax — (6,071) 6,071 (100.0)
Net income and comprehensive income $ 30,677 $ 3,154 $ 27,523 872.6 %


	Three Months Ended
	June 30, 2022		June 30, 2021		Change		Percent Change
Operating revenues:
Expedited Freight	$	408,857	$	351,735	$	57,122	16.2	%
Intermodal	106,411		69,133		37,278		53.9
Eliminations and other operations	(49)		(197)		148		(75.1)
Operating revenues	515,219		420,671		94,548		22.5
Operating expenses:
Purchased transportation	239,490		215,217		24,273		11.3
Salaries, wages, and employee benefits	86,358		84,641		1,717		2.0
Operating leases	23,459		20,370		3,089		15.2
Depreciation and amortization	11,595		9,414		2,181		23.2
Insurance and claims	13,196		10,891		2,305		21.2
Fuel expense	8,314		4,059		4,255		104.8
Other operating expenses	57,262		33,955		23,307		68.6

Total operating expenses	439,674		378,547		61,127		16.1
Income (loss) from continuing operations:
Expedited Freight	63,107		34,688		28,419		81.9
Intermodal	15,249		8,386		6,863		81.8

Other Operations	(2,811)		(950)		(1,861)		195.9
Income from continuing operations	75,545		42,124		33,421		79.3
Other expense:
Interest expense	(1,193)		(1,323)		130		(9.8)

Total other expense	(1,193)		(1,323)		130		(9.8)
Income from continuing operations before income taxes	74,352		40,801		33,551		82.2
Income tax expense	18,922		10,124		8,798		86.9
Net income from continuing operations	55,430		30,677		24,753		80.7
Loss from discontinued operation, net of tax	—		—		—		—
Net income and comprehensive income	$	55,430	$	30,677	$	24,753	80.7	%

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Operating Revenues

Operating revenues increased ~~$138,993,~~$94,548, or ~~49.3%~~22.5%, to $515,219 for the three months ended June 30, 2022 compared to $420,671 for the three months ended June 30, ~~2021 compared to $281,678 for the three months ended June 30, 2020.~~2021. The increase was primarily ~~driven by~~due to an increase in our Expedited Freight segment of ~~$116,077 due to increased~~$57,122 driven by Network, Truckload and Final Mile ~~revenue.~~revenue, and in our Intermodal segment of $37,278, driven by increased drayage and accessorial revenues.

Operating Expenses

Operating expenses increased ~~$110,783,~~$61,127, or ~~41.4%~~16.1%, to $439,674 for the three months ended June 30, 2022 compared to $378,547 for the three months ended June 30, ~~2021 compared to $267,764 for the three months ended June 30, 2020.~~2021. The increase was primarily ~~driven by~~due to an increase in purchased transportation expense of ~~$73,148~~$24,273, fuel expense of $4,255 and other operating expenses of $23,307 in both our Expedited Freight and Intermodal segments. Purchased transportation expense includes our independent contractor fleet owners and owner-operators, who lease their equipment to our motor carrier (“Leased Capacity Providers”) and third party ~~carriers.~~carriers, while Company-employed drivers are included in salaries, wages and employee benefits. Purchased transportation expense increased due to higher Leased Capacity Provider and third party carrier costs, and the utilization of more third party carriers over the prior year. Fuel expense increased due to rise in the average price of fuel in the second quarter of 2022. Other operating expenses increased due to higher bad debt expense, travel expenses, recruiting costs, terminal and office expenses, and legal and professional fees. Other operating expenses also increased due to additional expenses incurred in support of the higher accessorial revenues as noted above for the Intermodal segment.

Income from Continuing Operations and Segment Operations

Income from continuing operations increased ~~$28,210,~~$33,421, or ~~202.7%~~79.3%, to $75,545 for the three months ended June 30, 2022 compared to $42,124 for the three months ended June 30, ~~2021 compared to $13,914 for the three months ended June 30, 2020.~~2021. The increase was primarily driven by an increase in income from continuing operations atin our Expedited Freight segment and Intermodal segment of ~~$22,935~~$28,419 and ~~$3,973,~~$6,863, respectively. The results ~~for~~of our two reportable segments are discussed below in ~~detail in the following sections.~~more detail.

Interest Expense

Interest expense was $1,193 for the three months ended June 30, 2022 compared to $1,323 for the three months ended June 30, ~~2021 compared to $1,198 for the three months ended June 30, 2020.~~2021. The ~~increase~~decrease in interest expense was ~~attributable~~due to ~~additional outstanding borrowings under our revolving credit facility~~a lower variable interest rate during the second quarter of ~~2021.~~2022 as compared to the same period in the prior year. The interest rate on the outstanding borrowings under ~~the revolving~~our credit facility was 2.14% and 3.25% ~~as of both~~during the three months ended June 30, 2022 and 2021, ~~and June 30, 2020.~~respectively.

Income Taxes on a Continuing Basis

The ~~combined federal and state~~ effective tax rate on a continuing basis for the three months ended June 30, ~~2021~~2022 was ~~24.8%~~25.4% compared to ~~a rate of 27.5%~~24.8% for the three months ended June 30, ~~2020.~~2021. The ~~lower~~higher effective tax rate for the three months ended June 30, ~~2021~~2022 was primarily due to ~~increased vesting of restricted shares as well as exercises of stock options~~decreased excess tax benefits realized on share-based awards in ~~the second quarter of~~ ~~2021~~ ~~when~~2022 compared to the same period in ~~2020~~.

~~Loss from Discontinued Operation, net of tax~~

Loss from discontinued operation, net of tax was $6,071 for the three months ended June 30, 2020. Loss from discontinued operation includes our Pool business and, as discussed above, the Pool business was sold on February 12, 2021. For the three months ended June 30, 2020, our Pool business was adversely impacted by COVID-19 as many of our customers were affected by retail mall closure in response to stay-at-home orders beginning in March 2020.

Net Income

As a result of the foregoing factors, net income increased ~~$27,523,~~$24,753, or ~~872.6%~~80.7%, to $55,430 for the three months ended June 30, 2022 compared to $30,677 for the three months ended June 30, ~~2021 compared to $3,154 for the three months ended June 30, 2020.~~2021.

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Expedited Freight - Three Months Ended June 30, ~~2021~~2022 compared to Three Months Ended June 30, ~~2020~~2021

The following table sets forth the financial data of our Expedited Freight segment for the three months ended June 30, 2022 and 2021 (unaudited and ~~2020:~~in thousands):

Expedited Freight Segment Information
(unaudited and in thousands)
Three Months Ended
June 30, 2021 Percent of Revenue June 30, 2020 Percent of Revenue Change Percent Change
Operating revenues:
Network1
$ 210,088 59.7 % $ 134,173 56.9 % $ 75,915 56.6 %
Truckload 56,968 16.2 41,857 17.8 15,111 36.1
Final Mile 69,883 19.9 53,427 22.7 16,456 30.8
Other 14,796 4.2 6,201 2.6 8,595 138.6
Total operating revenues 351,735 100.0 235,658 100.0 116,077 49.3
Operating expenses:
Purchased transportation 191,648 54.5 127,478 54.1 64,170 50.3
Salaries, wages and employee benefits 67,560 19.2 50,508 21.4 17,052 33.8
Operating leases 14,868 4.2 13,338 5.7 1,530 11.5
Depreciation and amortization 6,779 1.9 6,740 2.9 39 0.6
Insurance and claims 8,385 2.4 5,715 2.4 2,670 46.7
Fuel expense 2,147 0.6 1,406 0.6 741 52.7
Other operating expenses 25,660 7.3 18,720 7.9 6,940 37.1
Total operating expenses 317,047 90.1 223,905 95.0 93,142 41.6
Income from operations $ 34,688 9.9 % $ 11,753 5.0 % $ 22,935 195.1 %
1Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.





	Three Months Ended
	June 30, 2022		Percent of Revenue		June 30, 2021		Percent of Revenue		Change		Percent Change
Operating revenues:
Network1	$	263,425	64.4	%	$	210,088	59.7	%	$	53,337	25.4	%
Truckload	60,144		14.7		56,968		16.2		3,176		5.6
Final Mile	73,028		17.9		69,883		19.9		3,145		4.5
Other	12,260		3.0		14,796		4.2		(2,536)		(17.1)
Total operating revenues	408,857		100.0		351,735		100.0		57,122		16.2

Operating expenses:
Purchased transportation	212,575		52.0		191,648		54.5		20,927		10.9
Salaries, wages and employee benefits	69,497		17.0		67,560		19.2		1,937		2.9
Operating leases	15,933		3.9		14,868		4.2		1,065		7.2
Depreciation and amortization	7,817		1.9		6,779		1.9		1,038		15.3
Insurance and claims	8,311		2.0		8,385		2.4		(74)		(0.9)
Fuel expense	3,229		0.8		2,147		0.6		1,082		50.4
Other operating expenses	28,388		7.0		25,660		7.3		2,728		10.6

Total operating expenses	345,750		84.6		317,047		90.1		28,703		9.1
Income from operations	$	63,107	15.4	%	$	34,688	9.9	%	$	28,419	81.9	%

1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.

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Expedited Freight Operating Statistics	Expedited Freight Operating Statistics									Expedited Freight Operating Statistics

		Three Months Ended									Three Months Ended
		June 30, 2021			June 30, 2020			Percent Change			June 30, 2022		June 30, 2021		Percent Change
Business days	Business days	64			64			—	%	Business days	64		64		—	%

Tonnage 1,2	Tonnage 1,2									Tonnage1,2
Total pounds	Total pounds	728,191			522,031			39.5		Total pounds	730,128		728,191		0.3
Pounds per day	Pounds per day	11,378			8,157			39.5		Pounds per day	11,408		11,378		0.3

Shipments 1,2	Shipments 1,2									Shipments1,2
Total shipments	Total shipments	1,096			963			13.8		Total shipments	961		1,096		(12.3)
Shipments per day	Shipments per day	17.1			15.0			14.0		Shipments per day	15.0		17.1		(12.3)

Weight per shipment	Weight per shipment	664			542			22.5		Weight per shipment	760		664		14.5

Revenue per hundredweight 3	Revenue per hundredweight 3	$	28.63		$	26.32		8.8		Revenue per hundredweight3	$	35.99	$	29.45	22.2
Revenue per hundredweight, ex fuel 3	Revenue per hundredweight, ex fuel 3	$	24.68		$	23.09		6.9		Revenue per hundredweight, ex fuel3	$	27.13	$	24.68	9.9

Revenue per shipment 3	Revenue per shipment 3	$	191.89		$	139.30		37.8		Revenue per shipment3	$	273.52	$	195.64	39.8
Revenue per shipment, ex fuel 3	Revenue per shipment, ex fuel 3	$	165.62		$	121.77		36.0		Revenue per shipment, ex fuel3	$	206.21	$	163.97	25.8

Network revenue from door-to-door shipments as a percentage of network revenue 3,4		51.3		%	49.9		%	2.8

1 In thousands	1 In thousands									1 In thousands
2 Excludes accessorial, Truckload and Final Mile products	2 Excludes accessorial, Truckload and Final Mile products									2 Excludes accessorial, Truckload and Final Mile products
3 Includes intercompany revenue between the Network and Truckload revenue streams	3 Includes intercompany revenue between the Network and Truckload revenue streams									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

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Operating Revenues

Expedited Freight operating revenues increased ~~$116,077,~~$57,122, or ~~49.3%~~16.2%, to $408,857 for the three months ended June 30, 2022 from $351,735 for the three months ended June 30, ~~2021 from $235,658 for the three months ended June 30, 2020.~~2021. The increase was attributable to ~~increased~~higher Network, Truckload and Final Mile revenue. Network revenue increased due to a ~~39.5%~~0.3% increase in tonnage ~~a 13.8% increase in shipments~~ and a ~~8.8%~~9.9% increase in revenue per hundredweight ex fuel as compared to the prior year. The increase in tonnage ~~and shipments~~reflects an increase in weight per shipment of 14.5% on 12.3% fewer number of shipments. The increase in the weight per shipment was ~~primarily~~the result of more dense freight in our network driven by ~~the economic recovery from COVID-19, which adversely impacted the results of operations for the second quarter of~~ ~~2020. Strategic pricing initiatives and~~our freight rationalization actions ~~contributed~~ to ~~the~~capture higher quality freight. The increase in the revenue per ~~hundredweight. Fuel~~hundredweight ex fuel was driven by the execution of our revenue growth strategies, pricing initiatives, including our general rate increase, and continued strong demand for our services. Network fuel surcharge revenue increased ~~$11,925,~~$29,950, or ~~70.6%~~86.3% as a result of the rise in ~~fuel prices~~rise in the average price of fuel. Truckload and ~~increased tonnage. Truckload revenue increased $15,111 primarily driven by the economic recovery from COVID-19, which adversely impacted the results of operations for the second quarter of 2020. Final~~Final Mile revenue increased ~~$16,456~~$3,176 and $3,145, respectively, primarily due to ~~the combination of organic growth and the acquisition of CLW Delivery, Inc. (“CLW”) in October 2020.~~ continued strong demand for our services. Other revenue, which includes warehousing and terminal handling, ~~increased $8,595~~decreased $2,536 due to the ~~higher linehaul tonnage and shipment counts.~~lower number of shipments.

Purchased Transportation

Expedited Freight purchased transportation increased ~~$64,170,~~$20,927, or ~~50.3%~~10.9%, to $212,575 for the three months ended June 30, 2022 from $191,648 for the three months ended June 30, ~~2021 from $127,478 for the three months ended June 30, 2020.~~2021. Purchased transportation was ~~54.5%~~52.0% of Expedited Freight operating revenues for the three months ended June 30, ~~2021~~2022 compared to ~~54.1%~~54.5% for the same period in ~~2020.~~2021. Expedited Freight purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits. The increase in purchased transportation ~~as a percentage of revenues~~expense was primarily due to higher Leased Capacity Provider and third party carrier costs, partially offset by the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers for Network and Truckload services. In the second quarter of ~~2021,~~2022, we purchased ~~63.0~~%64.5%, ~~33.7%~~32.3% and ~~3.3%~~3.2% of our freight capacity from Leased Capacity Providers, third party carriers and Company-employed drivers, respectively. This compares to ~~68.4%~~63.0%, ~~27.3%~~33.7% and ~~4.3% i~~3.3%n in the same period in ~~2020.~~2021.

Salaries, Wages and Employee Benefits

Expedited Freight salaries, wages and employee benefits increased ~~$17,052,~~$1,937, or ~~33.8%~~2.9%, to $69,497 for the three months ended June 30, 2022 from $67,560 for the three months ended June 30, ~~2021 from $50,508 for the three months ended June 30, 2020.~~2021. Salaries, wages and employee benefits were ~~19.2%~~17.0% of Expedited Freight operating revenues for the three months ended June 30, ~~2021~~2022 compared to ~~21.4%~~19.2% for the same period in ~~2020.~~ 2021. The increase in salaries, wages and employee benefits expense was primarily due to ~~the~~ additional employees hired in response to the ~~increase in tonnage and shipments~~increased volumes in the second quarter of ~~2021,~~2022 and higher ~~group health insurance premiums~~salaries and ~~an increased reserve for incentive compensation. Cost-control measures implemented in the prior year contributed~~wages as compared to the ~~decrease~~ same period in ~~salaries, wages and employee benefits expense as a percentage of operating revenues.~~2021.

Operating Leases

Expedited Freight operating leases increased ~~$1,530,~~$1,065, or ~~11.5%~~7.2%, to $15,933 for the three months ended June 30, 2022 from $14,868 for the three months ended June 30, ~~2021 from $13,338 for the three months ended June 30, 2020.~~2021. Operating leases were ~~4.2%~~3.9% of Expedited Freight operating revenues for the three months ended June 30, ~~2021~~2022 compared to ~~5.7%~~4.2% for the same period in ~~2020.~~2021. The increase in operating leases expense was primarily due to higher facility ~~and equipment lease~~ expense in ~~2021, which is partially attributable~~the second quarter of 2022 as compared to ~~facility leases assumed~~the same period in ~~connection with the CLW and J&P acquisitions.~~2021.

Depreciation and Amortization

Expedited Freight depreciation and amortization increased ~~$39,~~$1,038, or ~~0.6%~~15.3%, to $7,817 for the three months ended June 30, 2022 from $6,779 for the three months ended June 30, ~~2021 from $6,740 for the three months ended June 30, 2020.~~2021. Depreciation and amortization was 1.9% of Expedited Freight operating revenues for the three months ended June 30, 2021 compared to 2.9% for the same period in 2020. The increase in depreciation and amortization expense is primarily due to the additional amortization expense resulting from the acquisitions of CLW and J&P.

~~Insurance and Claims~~

Expedited Freight insurance and claims increased $2,670, or 46.7%, to $8,385 for the three months ended June 30, 2021 from $5,715 for the three months ended June 30, 2020. Insurance and claims were 2.4% of Expedited Freight operating revenues for both the three months ended June 30, ~~2021~~2022 and ~~2020.~~2021. The increase in depreciation and amortization expense was primarily due to an increase in equipment depreciation in the second quarter of 2022 as compared to the same period in 2021.

Insurance and Claims

Expedited Freight insurance and claims decreased $74, or 0.9%, to $8,311 for the three months ended June 30, 2022 from $8,385 for the three months ended June 30, 2021. Insurance and claims was 2.0% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 2.4% for the same period in 2021. The decrease in insurance and claims expense was primarily ~~attributable~~due to a decrease in vehicle liability and cargo claims, offset by an increase in vehicle repairs and insurance premiums in the second quarter of 2022 as ~~well as~~compared to the same period in 2021. See additional ~~vehicle liability and cargo claims. See additional~~ discussion over the consolidated change in self-insurance reserves in the “Other Operations” section below.

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Fuel Expense

Expedited Freight fuel expense increased ~~$741,~~$1,082, or ~~52.7%~~50.4%, to $3,229 for the three months ended June 30, 2022 from $2,147 for the three months ended June 30, ~~2021 from $1,406~~2021. Fuel expense was 0.8% of Expedited Freight operating revenues for the three months ended June 30, ~~2020.~~2022 compared to 0.6% for the same period in 2021. Fuel expense ~~was 0.6% of Expedited Freight operating revenues for both the three months ended June 30, 2021 and 2020. Expedited Freight fuel expense~~ increased primarily due to ~~increased mileage and the~~a rise in the average price of fuel in the second quarter of 2022 as compared to the same period in 2021.

Other Operating Expenses

Expedited Freight other operating expenses increased ~~$6,940,~~$2,728, or ~~37.1%~~10.6%, to $28,388 for the three months ended June 30, 2022 from $25,660 for the three months ended June 30, ~~2021 from $18,720 for the three months ended June 30, 2020.~~2021. Other operating expenses were ~~7.3%~~7.0% of Expedited Freight operating revenues for the three months ended June 30, ~~2021~~2022 compared to ~~7.9%~~7.3% for the same period in ~~2020.~~2021. Other operating expenses include equipment maintenance, facility expenses, legal and professional fees, and other over-the-road costs. The increase in other operating expenses was ~~driven by~~primarily due to an increase in equipment maintenance costs, terminal and office expenses, ~~legal and~~recruiting costs, professional fees ~~other over-the-road costs~~ and ~~parts for final mile installations. In the second quarter of 2020, other operating~~travel expenses ~~included a $2,108 gain from changes in the fair value of an earn-out liability due to the timing of expected new business wins. A similar gain was not recorded~~ in the second quarter of 2022 as compared to the same period in 2021.

Income from Operations

Expedited Freight income from operations increased ~~$22,935,~~$28,419, or ~~195.1%~~81.9%, to $63,107 for the three months ended June 30, 2022 compared to $34,688 for the three months ended June 30, ~~2021 compared to $11,753 for the three months ended June 30, 2020.~~2021. Income from operations was ~~9.9%~~15.4% of Expedited Freight operating revenues for the three months ended June 30, ~~2021~~2022 compared to ~~5.0%~~9.9% for the same period in ~~2020.~~2021. The increase in income from operations as a percentage of operating revenues was ~~driven by~~primarily due to increased tonnage and revenue per hundredweight ~~and~~ex fuel combined with higher ~~number of shipments combine with cost-control measures and operational efficiencies,~~fuel surcharge revenue, partially offset by ~~the change in mix of freight capacity purchased from~~higher Leased Capacity ~~Providers,~~Provider and third party ~~carriers and Company-employed drivers.~~carrier costs.

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Intermodal - Three Months Ended June 30, ~~2021~~2022 compared to Three Months Ended June 30, ~~2020~~2021

The following table sets forth the financial data of our Intermodal segment for the three months ended June 30, 2022 and 2021 (unaudited and ~~2020:~~

Intermodal Segment Information
(unaudited and in thousands)
Three Months Ended
June 30, 2021 Percent of Revenue June 30, 2020 Percent of Revenue Change Percent Change
Operating revenues $ 69,133 100.0 % $ 46,428 100.0 % $ 22,705 48.9 %
Operating expenses:
Purchased transportation 23,767 34.4 14,904 32.1 8,863 59.5
Salaries, wages and employee benefits 16,230 23.5 11,728 25.3 4,502 38.4
Operating leases 5,500 8.0 4,045 8.7 1,455 36.0
Depreciation and amortization 2,612 3.8 2,648 5.7 (36) (1.4)
Insurance and claims 2,355 3.4 1,789 3.9 566 31.6
Fuel expense 1,912 2.8 1,113 2.4 799 71.8
Other operating expenses 8,371 12.1 5,788 12.5 2,583 44.6
Total operating expenses 60,747 87.9 42,015 90.5 18,732 44.6
Income from operations $ 8,386 12.1 % $ 4,413 9.5 % $ 3,973 90.0 %
in thousands):

Intermodal Operating Statistics
Three Months Ended
June 30, 2021 June 30, 2020 Percent Change
Drayage shipments 96,805 68,974 40.3 %
Drayage revenue per shipment $ 618 $ 556 11.2 %
Number of locations 29 24 20.8 %





	Three Months Ended
	June 30, 2022		Percent of Revenue		June 30, 2021		Percent of Revenue		Change		Percent Change
Operating revenues	$	106,411	100.0	%	$	69,133	100.0	%	$	37,278	53.9	%

Operating expenses:
Purchased transportation	26,963		25.3		23,767		34.4		3,196		13.4
Salaries, wages and employee benefits	18,831		17.7		16,230		23.5		2,601		16.0
Operating leases	7,526		7.1		5,500		8.0		2,026		36.8
Depreciation and amortization	3,716		3.5		2,612		3.8		1,104		42.3
Insurance and claims	2,338		2.2		2,355		3.4		(17)		(0.7)
Fuel expense	5,084		4.8		1,912		2.8		3,172		165.9
Other operating expenses	26,704		25.1		8,371		12.1		18,333		219.0
Total operating expenses	91,162		85.7		60,747		87.9		30,415		50.1
Income from operations	$	15,249	14.3	%	$	8,386	12.1	%	$	6,863	81.8	%


Intermodal Operating Statistics

	Three Months Ended
	June 30, 2022		June 30, 2021		Percent Change
Drayage shipments	92,786		96,805		(4.2)	%
Drayage revenue per shipment1	$	979	$	618	58.4


1 Excludes revenue derived from container freight station warehouse and handling, and linehaul and LTL services.

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Operating Revenues

Intermodal operating revenues increased ~~$22,705,~~$37,278, or ~~48.9%~~53.9%, to $106,411 for the three months ended June 30, 2022 from $69,133 for the three months ended June 30, 2021. The increase in operating revenue was primarily due to a 58.4% increase in drayage revenue per shipment as compared to the same period in 2021. The increase in drayage revenue per shipment was driven by the execution of our pricing initiatives, the acquisition of BarOle in November 2021 ~~from $46,428~~and Edgmon in May 2022, higher accessorial revenue in support of our customers and continued strong demand for our services. In addition, fuel surcharge revenue increased $7,710, or 109.3% as a result of the rise in rise in the average price of fuel.

Purchased Transportation

Intermodal purchased transportation increased $3,196, or 13.4%, to $26,963 for the three months ended June 30, ~~2020.~~2022 from $23,767 for the three months ended June 30, 2021. Purchased transportation was 25.3% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 34.4% for the same period in 2021. Intermodal purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits. The increase in purchased transportation costs was primarily due to higher Leased Capacity Provider and third party carrier costs, and the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers.

Salaries, Wages and Employee Benefits

Intermodal salaries, wages and employee benefits increased $2,601, or 16.0%, to $18,831 for the three months ended June 30, 2022 compared to $16,230 for the three months ended June 30, 2021. Salaries, wages and employee benefits were 17.7% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 23.5% for the same period in 2021. The increase in salaries, wages and employee benefits expense was primarily due to additional employees hired in the second quarter of 2022 and an increased reserve for incentive compensation as compared to the same period in 2021.

Operating Leases

Intermodal operating leases increased $2,026, or 36.8%, to $7,526 for the three months ended June 30, 2022 compared to $5,500 for the three months ended June 30, 2021. Operating leases were 7.1% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 8.0% for the same period in 2021. The increase in operating leases expense was primarily due to additional equipment leases in the second quarter of 2022 as compared to the same period in 2021.

Depreciation and Amortization

Intermodal depreciation and amortization increased $1,104, or 42.3%, to $3,716 for the three months ended June 30, 2022 from $2,612 for the three months ended June 30, 2021. Depreciation and amortization was 3.5% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 3.8% for the same period in 2021. The increase in depreciation and amortization expense was primarily due to the equipment and intangible assets acquired in connection with the acquisitions completed in the fourth quarter of 2021 and the second quarter of 2022.

Insurance and Claims

Intermodal insurance and claims decreased $17, or 0.7%, to $2,338 for the three months ended June 30, 2022 from $2,355 for the three months ended June 30, 2021. Insurance and claims were 2.2% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 3.4% for the same period in 2021. The decrease in insurance and claims expense was primarily due to the decrease in insurance premiums, offset by an increase in vehicle liability claims and vehicle repairs during the second quarter of 2022 as compared to the same period in 2021. See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations” section below.

Fuel Expense

Intermodal fuel expense increased $3,172, or 165.9%, to $5,084 for the three months ended June 30, 2022 from $1,912 for the three months ended June 30, 2021. Fuel expense was 4.8% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 2.8% for the same period in 2021. Intermodal fuel expense increased primarily due to the rise in the average price of fuel in the second quarter of 2022 as compared to the same period in 2021.

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Other Operating Expenses

Intermodal other operating expenses increased $18,333, or 219.0%, to $26,704 for the three months ended June 30, 2022 from $8,371 for the three months ended June 30, 2021. Other operating expenses were 25.1% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 12.1% for the same period in 2021. The increase in Intermodal other operating expenses was primarily due to additional expenses incurred in support of the increased accessorial revenues, increased bad debt expense and higher professional fees in the second quarter of 2022 as compared to the same period in 2021.

Income from Operations

Intermodal income from operations increased $6,863, or 81.8%, to $15,249 for the three months ended June 30, 2022 compared to $8,386 for the three months ended June 30, 2021. Income from operations was 14.3% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 12.1% for the same period in 2021. The increase in income from operations as a percentage of operating revenues was primarily due to increased drayage revenue per shipment, partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers and higher Leased Capacity Provider and third party carrier costs.

Other Operations - Three Months Ended June 30, 2022 compared to Three Months Ended June 30, 2021

Other operations included an $2,811 operating loss during the three months ended June 30, 2022 compared to a $950 operating loss during the three months ended June 30, 2021. The change in the operating loss was primarily due to an increase in self-insurance reserves for vehicle liability claims, legal reserves, bad debt expense related to other receivables and professional fees, partially offset by a decrease in the reserves for group health insurance claims. The increase in the self-insurance reserves for vehicle liability claims was due to the unfavorable loss development factor of historical claims.

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Results from Operations

The following table sets forth our consolidated financial data for the six months ended June 30, 2022 and 2021 (unaudited and in thousands):


	Six Months Ended
	June 30, 2022		June 30, 2021		Change		Percent Change
Operating revenues:
Expedited Freight	$	785,448	$	655,921	$	129,527	19.7	%
Intermodal	196,851		127,647		69,204		54.2
Eliminations and other operations	(119)		(695)		576		(82.9)
Operating revenues	982,180		782,873		199,307		25.5
Operating expenses:
Purchased transportation	464,322		399,825		64,497		16.1
Salaries, wages, and employee benefits	172,439		159,538		12,901		8.1
Operating leases	46,132		39,537		6,595		16.7
Depreciation and amortization	22,725		18,651		4,074		21.8
Insurance and claims	25,164		20,632		4,532		22.0
Fuel expense	14,179		7,761		6,418		82.7
Other operating expenses	104,323		72,081		32,242		44.7

Total operating expenses	849,284		718,025		131,259		18.3
Income (loss) from continuing operations:
Expedited Freight	110,787		59,218		51,569		87.1
Intermodal	26,395		12,895		13,500		104.7
Other Operations	(4,286)		(7,265)		2,979		(41.0)
Income from continuing operations	132,896		64,848		68,048		104.9
Other expense:
Interest expense	(1,977)		(2,488)		511		(20.5)

Total other expense	(1,977)		(2,488)		511		(20.5)
Income from continuing operations before income taxes	130,919		62,360		68,559		109.9
Income tax expense	32,803		14,969		17,834		119.1
Net income from continuing operations	98,116		47,391		50,725		107.0
Loss from discontinued operation, net of tax	—		(5,533)		5,533		(100.0)
Net income and comprehensive income	$	98,116	$	41,858	$	56,258	134.4	%

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Operating Revenues

Operating revenues increased $199,307, or 25.5% to $982,180 for the six months ended June 30, 2022 compared to $782,873 for the six months ended June 30, 2021. The increase was primarily due to an increase in our Expedited Freight segment of $129,527, driven by increased Network, Truckload and Final Mile revenue, and in our Intermodal segment of $69,204 driven by increased drayage and accessorial revenues.

Operating Expenses

Operating expenses increased $131,259, or 18.3%, to $849,284 for the six months ended June 30, 2022 compared to $718,025 for the six months ended June 30, 2021. The increase was primarily due to an increase in purchased transportation expense of $64,497, salaries, wages and employee benefits of $12,901 and other operating expenses of $32,242 in both our Expedited Freight and Intermodal segments. Purchased transportation expense includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits. Purchased transportation expense increased due to higher Lease Capacity Provider and third party carrier costs, and the utilization of more third party carriers over the prior year. Salaries, wages and employee benefits increased primarily due to the additional employees hired in response to the increase in volumes in 2022, higher salaries and wages, and an increased reserve for incentive compensation. Other operating expenses increased due to higher bad debt expense, travel expenses, recruiting costs, and terminal and office expenses, partially offset by lower professional fees. Other operating expenses also increased due to additional expenses incurred in support of the increased accessorial revenues as noted above for the Intermodal segment.

Income from Continuing Operations and Segment Operations

Income from continuing operations increased $68,048, or 104.9%, to $132,896 for the six months ended June 30, 2022 compared to $64,848 for the six months ended June 30, 2021. The increase was primarily driven by an increase in income from continuing operations in our Expedited Freight segment and Intermodal segment of $51,569 and $13,500, respectively. The results of our two reportable segments are discussed below in the following sections.

Interest Expense

Interest expense was $1,977 for the six months ended June 30, 2022 compared to $2,488 for the six months ended June 30, 2021. The decrease in interest expense was due to a lower variable interest rate during the six months ended June 30, 2022 as compared to the same period in the prior year. The interest rate on the outstanding borrowings under our credit facility was 1.80% and 3.25% during the six months ended June 30, 2022 and 2021, respectively.

Income Taxes on a Continuing Basis

The effective tax rate on a continuing basis for the six months ended June 30, 2022 was 25.1% compared to a rate of 24.0% for the six months ended June 30, 2021. The higher effective tax rate for the six months ended June 30, 2022 was primarily due to decreased excess tax benefits realized on share-based awards in 2022 compared to the same period in 2021.

Loss from Discontinued Operation, net of tax

There was no loss from discontinued operation, net of tax for the six months ended June 30, 2022 compared to a loss from discontinued operation, net of tax of $5,533 for the six months ended June 30, 2021. Loss from discontinued operation includes our Pool business and, as discussed above, the Pool business was sold on February 12, 2021.

Net Income

As a result of the foregoing factors, net income increased by $56,258, or 134.4%, to $98,116 for the six months ended June 30, 2022 compared to $41,858 for the six months ended June 30, 2021.

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Expedited Freight - Six Months Ended June 30, 2022 compared to Six Months Ended June 30, 2021

The following table sets forth the financial data of our Expedited Freight segment for the six months ended June 30, 2022 and 2021 (unaudited and in thousands):


	Six Months Ended
	June 30, 2022		Percent of Revenue		June 30, 2021		Percent of Revenue		Change		Percent Change
Operating revenues:
Network1	$	506,839	64.5	%	$	388,715	59.3	%	$	118,124	30.4	%
Truckload	116,052		14.8		109,348		16.7		6,704		6.1
Final Mile	138,786		17.7		132,139		20.1		6,647		5.0
Other	23,771		3.0		25,719		3.9		(1,948)		(7.6)
Total operating revenues	785,448		100.0		655,921		100.0		129,527		19.7

Operating expenses:
Purchased transportation	412,609		52.5		356,012		54.3		56,597		15.9
Salaries, wages and employee benefits	137,717		17.5		129,247		19.7		8,470		6.6
Operating leases	31,664		4.0		29,086		4.4		2,578		8.9
Depreciation and amortization	15,298		1.9		13,577		2.1		1,721		12.7
Insurance and claims	17,062		2.2		15,996		2.4		1,066		6.7
Fuel expense	5,879		0.7		4,140		0.6		1,739		42.0
Other operating expenses	54,432		6.9		48,645		7.4		5,787		11.9

Total operating expenses	674,661		85.9		596,703		91.0		77,958		13.1
Income from operations	$	110,787	14.1	%	$	59,218	9.0	%	$	51,569	87.1	%

1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.

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Expedited Freight Operating Statistics

	Six Months Ended
	June 30, 2022		June 30, 2021		Percent Change
Business days	128		127		0.8	%

Tonnage1,2
Total pounds	1,447,740		1,379,530		4.9
Pounds per day	11,310		10,862		4.1

Shipments1,2
Total shipments	1,853		2,122		(12.7)
Shipments per day	14.5		16.7		(13.2)

Weight per shipment	781		650		20.2

Revenue per hundredweight3	$	35.19	$	28.30	24.3
Revenue per hundredweight, ex fuel3	$	26.94	$	24.30	10.9

Revenue per shipment3	$	275.01	$	183.98	49.5
Revenue per shipment, ex fuel3	$	210.51	$	157.94	33.3



1 In thousands
2 Excludes accessorial, Truckload and Final Mile products
3 Includes intercompany revenue between the Network and Truckload revenue streams

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Operating Revenues

Expedited Freight operating revenues increased $129,527, or 19.7%, to $785,448 for the six months ended June 30, 2022 from $655,921 for the six months ended June 30, 2021. The increase was attributable to higher Network, Truckload and Final Mile revenue. Network revenue increased due to a 4.9% increase in tonnage and a 10.9% increase in revenue per hundredweight ex fuel as compared to the prior year. The increase in tonnage reflects an increase in weight per shipment of 20.2% on 12.7% fewer number of shipments. The increase in the weight per shipment was the result of more dense freight in our network driven by our freight rationalization actions to capture higher quality freight. The increase in the revenue per hundredweight ex fuel was driven by the execution of our revenue growth strategies, pricing initiatives, including our general rate increase, and continued strong demand for our services. Network fuel surcharge revenue increased $52,070, or 83.7% as a result of the rise in the average price of fuel and an increase in tonnage. Truckload and Final Mile revenue increased $6,704 and $6,647, respectively, primarily due to continued strong demand for our services. Other revenue, which includes warehousing and terminal handling, decreased $1,948 due to the lower number of shipments.

Purchased Transportation

Expedited Freight purchased transportation increased $56,597, or 15.9%, to $412,609 for the six months ended June 30, 2022 from $356,012 for the six months ended June 30, 2021. Purchased transportation was 52.5% of Expedited Freight operating revenue for the six months ended June 30, 2022 compared to 54.3% for the same period in 2021. Expedited Freight purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits. The increase in purchased transportation expense was primarily due to higher Leased Capacity Provider and third party carrier costs, and the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers for Network and Truckload services. For the six months ended June 30, 2022, we purchased 62.6%, 34.1% and 3.3% of our freight capacity from Leased Capacity Providers, third party carriers and Company-employed drivers, respectively. This compares to 63.8%, 32.6% and 3.6% in the same period in 2021.

Salaries, Wages, and Employee Benefits

Expedited Freight salaries, wages and employee benefits increased $8,470, or 6.6%, to $137,717 for the six months ended June 30, 2022 from $129,247 for the six months ended June 30, 2021. Salaries, wages and employee benefits were 17.5% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 19.7% for the same period in 2021. The increase in salaries, wages and employee benefits expense was primarily due to additional employees hired in response to the increased volumes for the six months ended June 30, 2022, higher salaries and wages and an increased reserve for incentive compensation as compared to the same period in 2021.

Operating Leases

Expedited Freight operating leases increased $2,578, or 8.9%, to $31,664 for the six months ended June 30, 2022 from $29,086 for the six months ended June 30, 2021. Operating leases were 4.0% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 4.4% for the same period in 2021. The increase in operating leases expense was primarily due to higher facility expense, partially offset by fewer equipment leases for the six months ended June 30, 2022 as compared to the same period in 2021.

Depreciation and Amortization

Expedited Freight depreciation and amortization increased $1,721, or 12.7%, to $15,298 for the six months ended June 30, 2022 from $13,577 for the six months ended June 30, 2021. Depreciation and amortization was 1.9% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 2.1% for the same period in 2021. The increase in depreciation and amortization expense was primarily due to an increase in equipment depreciation for the six months ended June 30, 2022 as compared to the same period in 2021.

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Insurance and Claims

Expedited Freight insurance and claims increased $1,066, or 6.7%, to $17,062 for the six months ended June 30, 2022 from $15,996 for the six months ended June 30, 2021. Insurance and claims were 2.2% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 2.4% for the same period in 2021. The increase in insurance and claims expense was primarily due to an increase in vehicle repairs and insurance premiums, partially offset by a decrease in cargo claims for the six months ended June 30, 2022 as compared to the same period in 2021. See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations” section below.

Fuel Expense

Expedited Freight fuel expense increased $1,739, or 42.0%, to $5,879 for the six months ended June 30, 2022 from $4,140 for the six months ended June 30, 2021. Fuel expense was 0.7% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 0.6% for the same period in 2021. Fuel expense increased primarily due to the rise in the average price of fuel during the six months ended June 30, 2022.

Other Operating Expenses

Expedited Freight other operating expenses increased $5,787, or 11.9%, to $54,432 for the six months ended June 30, 2022 from $48,645 for the six months ended June 30, 2021. Other operating expenses were 6.9% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 7.4% for the same period in 2021. Other operating expenses include equipment maintenance, facility expenses, legal and professional fees, and other over-the-road costs. The increase in other operating expenses was primarily due to an increase in equipment maintenance costs, terminal and office expenses, recruiting costs, professional fees and travel expenses for the six months ended June 30, 2022 as compared to the same period in 2021.

Income from Operations

Expedited Freight income from operations increased $51,569, or 87.1%, to $110,787 for the six months ended June 30, 2022 compared to $59,218 for the six months ended June 30, 2021. Income from operations was 14.1% of Expedited Freight operating revenues in the six months ended June 30, 2022 compared to 9.0% for the same period in 2021. The increase in income from operations as a percentage of operating revenues was primarily due to increased tonnage and revenue per hundredweight ex fuel combined with higher fuel surcharge revenue, partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers, and higher Leased Capacity Provider and third party carrier costs.

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Intermodal - Six Months EndedJune 30, 2022 compared to Six Months Ended June 30, 2021

The following table sets forth the financial data of our Intermodal segment for the six months ended June 30, 2022 and 2021 (unaudited and in thousands):


	Six Months Ended
	June 30, 2022		Percent of Revenue		June 30, 2021		Percent of Revenue		Change		Percent Change
Operating revenues	$	196,851	100.0	%	$	127,647	100.0	%	$	69,204	54.2	%

Operating expenses:
Purchased transportation	51,831		26.3		44,370		34.8		7,461		16.8
Salaries, wages and employee benefits	36,766		18.7		30,293		23.7		6,473		21.4
Operating leases	14,467		7.3		10,337		8.1		4,130		40.0
Depreciation and amortization	7,326		3.7		5,048		4.0		2,278		45.1
Insurance and claims	4,398		2.2		4,757		3.7		(359)		(7.5)
Fuel expense	8,299		4.2		3,622		2.8		4,677		129.1
Other operating expenses	47,369		24.1		16,325		12.8		31,044		190.2
Total operating expenses	170,456		86.6		114,752		89.9		55,704		48.5
Income from operations	$	26,395	13.4	%	$	12,895	10.1	%	$	13,500	104.7	%


Intermodal Operating Statistics

	Six Months Ended
	June 30, 2022		June 30, 2021		Percent Change
Drayage shipments	181,098		186,714		(3.0)	%
Drayage revenue per shipment1	$	936	$	587	59.5


1 Excludes revenue derived from container freight station warehouse and handling, and linehaul and LTL services.

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Operating Revenues

Intermodal operating revenues increased $69,204, or 54.2%, to $196,851 for the six months ended June 30, 2022 from $127,647 for the six months ended June 30, 2021. The increase in operating revenue was primarily attributable to a ~~40.3%~~59.5% increase in drayage ~~shipments over~~revenue per shipment as compared to the same period in ~~2020 and an increase in accessorial revenues.~~2021. The increase in drayage ~~shipments~~revenue per shipment was driven by execution of our pricing initiatives, the ~~combination~~acquisition of BarOle in November 2021 and Edgmon in May 2022, higher accessorial revenue in support of our customers and continued strong demand for our services. In addition, fuel surcharge revenue increased $11,660, or 94.0% as a result of the ~~economic recovery from COVID-19, which adversely impacted~~rise in the ~~results~~average price of ~~operations for the second quarter of~~ ~~2020, and the Proficient Transport acquisition in February 2021.~~fuel.

Purchased Transportation

Intermodal purchased transportation increased ~~$8,863,~~$7,461, or ~~59.5%~~16.8%, to ~~$23,767~~$51,831 for the ~~three~~six months ended June 30, ~~2021~~2022 from ~~$14,904~~$44,370 for the ~~three~~six months ended June 30, ~~2020.~~2021. Purchased transportation was ~~34.4%~~26.3% of Intermodal operating revenues for the ~~three~~six months ended June 30, ~~2021~~2022 compared to ~~32.1%~~34.8% for the same period in ~~2020.~~2021. Intermodal purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits. The increase in purchased transportation ~~as a percentage of revenues~~costs was primarily due to higher Leased Capacity Provider and third party carrier costs, and the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers.

Salaries, Wages, and Employee Benefits

Intermodal salaries, wages and employee benefits increased ~~$4,502,~~$6,473, or ~~38.4%~~21.4%, to ~~$16,230~~$36,766 for the ~~three~~six months ended June 30, ~~2021~~2022 compared to ~~$11,728~~$30,293 for the ~~three~~six months ended June 30, ~~2020.~~2021. Salaries, wages and employee benefits were ~~23.5%~~18.7% of Intermodal operating revenues for the ~~three~~six months ended June 30, ~~2021~~2022 compared to ~~25.3%~~23.7% for the same period in ~~2020.~~ 2021. The increase in salaries, wages and employee benefits expense was primarily due to ~~the~~ additional employees hired ~~in response to~~for the ~~increase in shipments in the second quarter of~~ ~~2021~~six months ended June 30, 2022 and an increased reserve for incentive ~~compensation. Cost-control measures implemented in the prior year contributed~~compensation as compared to the ~~decrease~~ same period in ~~salaries, wages and employee benefits expense as a percentage of operating revenues.~~2021.

Operating Leases

Intermodal operating leases increased ~~$1,455,~~$4,130, or ~~36.0%~~40.0%, to ~~$5,500~~$14,467 for the ~~three~~six months ended June 30, ~~2021 compared to $4,045~~2022 from $10,337 for the ~~three~~six months ended June 30, ~~2020.~~2021. Operating leases were ~~8.0%~~7.3% of Intermodal operating revenues for the ~~three~~six months ended June 30, ~~2021~~2022 compared to ~~8.7%~~8.1% for the same period in ~~2020.~~2021. The increase in operating leases expense was primarily due to ~~new trailer~~additional equipment leases for the six months ended June 30, 2022 as compared to the same period in 2021.

Depreciation and Amortization

Intermodal depreciation and amortization ~~decreased $36,~~increased $2,278, or ~~1.4%~~45.1%, to ~~$2,612~~$7,326 for the ~~three~~six months ended June 30, ~~2021~~2022 from ~~$2,648~~$5,048 for the ~~three~~six months ended June 30, ~~2020.~~2021. Depreciation and amortization was ~~3.8%~~3.7% of Intermodal operating revenues for the ~~three~~six months ended June 30, ~~2021~~2022 compared to ~~5.7%~~4.0% for the same period in ~~2020~~2021. The ~~decrease~~increase in depreciation and amortization expense was primarily due to the ~~full depreciation~~equipment and intangible assets acquired in connection with the acquisitions completed in the fourth quarter of ~~equipment obtained through acquisitions in 2020, partially offset by~~2021 and the ~~additional amortization expense resulting from the acquisition~~second quarter of ~~Proficient Transport.~~2022.

Insurance and Claims

Intermodal insurance and claims ~~increased $566,~~decreased $359, or ~~31.6%~~7.5%, to $2,355 for the three months ended June 30, 2021 from $1,789 for the three months ended June 30, 2020. Insurance and claims were 3.4% of Intermodal operating revenues for the three months ended June 30, 2021 compared to 3.9% for the same period in 2020. ~~The increase in insurance and claims expense was primarily due to an increase in vehicle insurance premiums. See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations~~” ~~section below.~~

~~Fuel Expense~~

Intermodal fuel expense increased $799, or 71.8%, to $1,912 for the three months ended June 30, 2021 from $1,113 for the three months ended June 30, 2020. Fuel expense was 2.8% of Intermodal operating revenues for the three months ended June 30, 2021 compared to 2.4% for the same period in 2020. Intermodal fuel expense increased due to increased mileage and the rise in the average price of fuel in the second quarter of 2021.

~~Table of Contents~~

~~Other Operating Expenses~~

Intermodal other operating expenses increased $2,583, or 44.6%, to $8,371 for the three months ended June 30, 2021 from $5,788 for the three months ended June 30, 2020. Other operating expenses were 12.1% of Intermodal operating revenues for the three months ended June 30, 2021 compared to 12.5% for the same period in 2020. The increase in Intermodal other operating expenses was primarily due to additional expenses to support the increased accessorial revenues noted above.

~~Income from Operations~~

Intermodal income from operations increased $3,973, or 90.0%, to $8,386 for the three months ended June 30, 2021 compared to $4,413 for the three months ended June 30, 2020. Income from operations was 12.1% of Intermodal operating revenues for the three months ended June 30, 2021 compared to 9.5% for the same period in 2020. The increase in income from operations as a percentage of operating revenues was driven by the operating leverage on fixed costs such as operating leases, depreciation and amortization.

~~Other Operations - Three Months Ended June 30, 2021 compared to Three Months Ended June 30, 2020~~

Other operations included an $950 operating loss during the three months ended June 30, 2021 compared to a $2,252 operating loss during the three months ended June 30, 2020. The change in the operating loss was driven by decreased self-insurance reserves for vehicle liability and workers’ compensation claims, partially offset by an accrual for an incentive program established in 2021 and increased reserves for group health insurance claims. The decrease in the self-insurance reserves for vehicle liability and workers’ compensation claims was due to the favorable loss development factor of historical claims attributable to the safety measures in place. In the second quarter of 2020, severance costs in the amount of $997 were recorded in accordance with severance agreements for former employees. Similar severance costs were not recorded in the second quarter of 2021.

~~Results from Operations~~

~~Table of Contents~~

~~The following table sets forth our consolidated historical financial data from operations~~$4,398 for the six months ended June 30, ~~2021 and 2020 (unaudited and in thousands):~~
Six Months Ended
June 30, 2021 June 30, 2020 Change Percent Change
Operating revenues:
Expedited Freight $ 655,921 $ 489,287 $ 166,634 34.1 %
Intermodal 127,647 98,888 28,759 29.1
Eliminations and other operations (695) (940) 245 (26.1)
Operating revenues 782,873 587,235 195,638 33.3
Operating expenses:
Purchased transportation 399,825 292,667 107,158 36.6
Salaries, wages, and employee benefits 159,538 133,331 26,207 19.7
Operating leases 39,537 35,271 4,266 12.1
Depreciation and amortization 18,651 18,747 (96) (0.5)
Insurance and claims 20,632 17,766 2,866 16.1
Fuel expense 7,761 6,532 1,229 18.8
Other operating expenses 72,081 53,234 18,847 35.4
Total operating expenses 718,025 557,548 160,477 28.8
Income (loss) from continuing operations:
Expedited Freight 59,218 26,933 32,285 119.9
Intermodal 12,895 8,126 4,769 58.7
Other Operations (7,265) (5,372) (1,893) 35.2
Income from continuing operations 64,848 29,687 35,161 118.4
Other expense:
Interest expense (2,488) (2,051) (437) 21.3
Total other expense (2,488) (2,051) (437) 21.3
Income from continuing operations before income taxes 62,360 27,636 34,724 125.6
Income tax expense 14,969 6,995 7,974 114.0
Net income from continuing operations 47,391 20,641 26,750 129.6
Loss from discontinued operation, net of tax (5,533) (9,112) 3,579 (39.3)
Net income and comprehensive income $ 41,858 $ 11,529 $ 30,329 263.1 %

~~Table of Contents~~

~~Revenues~~

~~Operating revenues increased $195,638, or 33.3% to $782,873~~2022 from $4,757 for the six months ended June 30, ~~2021 compared to $587,235 for the six months ended June 30, 2020. The increase was primarily driven by our Expedited Freight segment of $166,634 due to increased Network, Truckload and Final Mile.~~

~~Operating Expenses~~

Operating expenses increased $160,477, or 28.8%, to $718,025 for the six months ended June 30, 2021 compared to $557,548 for the six months ended June 30, 2020. The increase was primarily driven by a purchased transportation increase of $107,158 in our Expedited Freight and Intermodal segments. Purchased transportation includes Leased Capacity Providers and third party carriers.

~~Income from Continuing Operations and Segment Operations~~

Income from continuing operations increased $35,161, or 118.4%, to $64,848 for the six months ended June 30, 2021 compared to $29,687 for the six months ended June 30, 2020. The increase was primarily driven by increases at our Expedited Freight segment and Intermodal segment of $32,285 and $4,769, respectively. The results for our two reportable segments are discussed in detail in the following sections.

~~Interest Expense~~

Interest expense was $2,488 for the six months ended June 30, 2021 compared to $2,051 for the six months ended June 30, 2020. The increase in interest expense was attributable to additional outstanding borrowings under our revolving credit facility during the six months ended June 30, 2021.

~~Income Taxes on a Continuing Basis~~

The combined federal and state effective tax rate on a continuing basis for the six months ended June 30, 2021 was 24.0% compared to a rate of 25.3% for the six months ended June 30, 2020. The lower effective tax rate for the six months ended June 30, 2021 was primarily due to ~~increased vesting of restricted shares as well as exercises of stock options in for the~~ ~~six~~ ~~months ended~~ ~~June 30, 2021~~ ~~when compared to the same period in~~ ~~2020~~.

~~Loss from Discontinued Operation, net of tax~~

Loss from discontinued operations, net of tax decreased $3,579 to a $5,533 loss for the six months ended June 30, 2021 from a $9,112 loss for the six months ended June 30, 2020. Loss from discontinued operation includes our Pool business and, as discussed above, the Pool business was sold on February 12, 2021. For the six months ended June 30, 2020, our Pool business was adversely impacted by COVID-19 as many of our customers were affected by retail mall closure in response to stay-at-home orders beginning in March 2020.

~~Net Income~~

~~As a result of the foregoing factors, net income increased by $30,329, or 263.1%, to $41,858 for the six months ended June 30, 2021 compared to $11,529 for the six months ended June 30, 2020.~~

~~Table of Contents~~

~~Expedited Freight - Six Months Ended June 30, 2021 compared to Six Months Ended June 30, 2020~~

~~The following table sets forth the historical financial data of our Expedited Freight segment for the six months ended June 30, 2021 and 2020:~~

Expedited Freight Segment Information
(unaudited and in thousands)
Six Months Ended
June 30, 2021 Percent of Revenue June 30, 2020 Percent of Revenue Change Percent Change
Operating revenues:
Network 1
$ 388,715 59.3 % $ 286,182 58.5 % $ 102,533 35.8 %
Truckload 109,348 16.7 89,384 18.3 19,964 22.3
Final Mile 132,139 20.1 101,229 20.7 30,910 30.5
Other 25,719 3.9 12,492 2.6 13,227 105.9
Total operating revenues 655,921 100.0 489,287 100.0 166,634 34.1
Operating expenses:
Purchased transportation 356,012 54.3 260,268 53.2 95,744 36.8
Salaries, wages and employee benefits 129,247 19.7 105,943 21.7 23,304 22.0
Operating leases 29,086 4.4 26,940 5.5 2,146 8.0
Depreciation and amortization 13,577 2.1 13,435 2.7 142 1.1
Insurance and claims 15,996 2.4 12,328 2.5 3,668 29.8
Fuel expense 4,140 0.6 3,550 0.7 590 16.6
Other operating expenses 48,645 7.4 39,890 8.2 8,755 21.9
Total operating expenses 596,703 91.0 462,354 94.5 134,349 29.1
Income from operations $ 59,218 9.0 % $ 26,933 5.5 % $ 32,285 119.9 %
1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.

~~Table of Contents~~

Expedited Freight Operating Statistics
Six Months Ended
June 30, 2021 June 30, 2020 Percent Change
Business days 127 128 (0.8) %
Tonnage 1,2
    Total pounds 1,379,530 1,091,987 26.3
    Pounds per day 10,862 8,531 27.3
Shipments 1,2
    Total shipments 2,122 1,849 14.8
    Shipments per day 16.7 14.4 15.7
Weight per shipment 650 591 10.0
Revenue per hundredweight 3
$ 28.12 $ 26.76 5.1
Revenue per hundredweight, ex fuel 3
$ 24.29 $ 23.09 5.2
Revenue per shipment 3
$ 183.39 $ 154.81 18.5
Revenue per shipment, ex fuel 3
$ 158.47 $ 133.11 19.1
Network revenue from door-to-door shipments as a percentage of network revenue 3,4
50.0 % 46.9 % 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

~~Table of Contents~~

~~Operating Revenues~~

Expedited Freight operating revenues increased $166,634, or 34.1%, to $655,921 for the six months ended June 30, 2021 from $489,287 for the six months ended June 30, 2020. The increase was attributable to increased Network, Truckload and Final Mile revenue. Network revenue increased due to a 26.3% increase in tonnage, a 14.8% increase in shipments and a 10.0% increase in revenue per hundredweight as compared to the prior year. The increase in tonnage and shipments was primarily driven by the economic recovery from COVID-19, which adversely impacted the results of operations for the ~~six~~months ended June 30, 2020. Strategic pricing initiatives and freight rationalization actions contributed to the increase in the revenue per hundredweight. Fuel surcharge revenue increased $12,788, or 31.9% as a result of the rise in fuel prices and increased tonnage. Truckload revenue increased $19,964 primarily driven by the economic recovery from COVID-19, which adversely impacted the results of operations for ~~the~~ ~~six~~months ended June 30, 2020. Final Mile revenue increased $30,910 due to the combination of organic growth and the acquisition of CLW Delivery, Inc. (“CLW”) in October 2020. Other revenue, which includes warehousing and terminal handling, increased $13,227 due to the higher linehaul tonnage and shipment counts.

~~Purchased Transportation~~

Expedited Freight purchased transportation increased $95,744, or 36.8%, to $356,012 for the six months ended June 30, 2021 from $260,268 for the six months ended June 30, 2020. Purchased transportation was 54.3% of Expedited Freight operating revenue for the six months ended June 30, 2021 compared to 53.2% for the same period in 2020. Expedited Freight purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits. The increase in purchased transportation as a percentage of revenues was primarily due to the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers for Network and Truckload services. For the six months ended June 30, 2021, we purchased 63.8%, 32.6% and 3.6% of our freight capacity from Leased Capacity Providers, third party carriers and Company-employed drivers, respectively. This compares to 70.4%, 24.8% and 4.8% in the same period in 2020.

~~Salaries, Wages, and Employee Benefits~~

Expedited Freight salaries, wages and employee benefits increased by $23,304, or 22.0%, to $129,247 for the six months ended June 30, 2021 from $105,943 for the six months ended June 30, 2020. Salaries, wages and employee benefits were 19.7% of Expedited Freight operating revenues for the six months ended June 30, 2021 compared to 21.7% for the same period in 2020. ~~The increase in salaries, wages and employee benefits expense was primarily due to the additional employees hired in response to the increase in tonnage and shipments in~~ ~~2021, higher group health insurance premiums and an increased reserve for incentive compensation. Cost-control measures implemented in the prior year contributed to the decrease~~ ~~in salaries, wages and employee benefits expense as a percentage of operating revenues.~~

~~Operating Leases~~

Expedited Freight operating leases increased $2,146, or 8.0%, to $29,086 for the six months ended June 30, 2021 from $26,940 for the six months ended June 30, 2020. Operating leases were 4.4% of Expedited Freight operating revenues for the six months ended June 30, 2021 compared to 5.5% for the same period in 2020. The increase in operating leases expense was primarily due to higher facility and equipment lease expense in 2021, which is partially attributable to facility leases assumed in connection with the CLW and J&P acquisitions.

~~Depreciation and Amortization~~

Expedited Freight depreciation and amortization increased $142, or 1.1%, to $13,577 for the six months ended June 30, 2021 from $13,435 for the six months ended June 30, 2020. Depreciation and amortization was 2.1% of Expedited Freight operating revenues for the six months ended June 30, 2021 compared to 2.7% for the same period in 2020. The increase in depreciation and amortization expense is primarily due to the additional amortization expense resulting from the acquisitions of CLW and J&P.

~~Table of Contents~~

~~Insurance and Claims~~

~~Expedited Freight insurance and claims increased $3,668, or 29.8%, to $15,996 for the six months ended June 30, 2021 from $12,328 for the six months ended June 30, 2020.~~ Insurance and claims were ~~2.4% of Expedited Freight operating revenues for the six months ended June 30, 2021 compared to 2.5% for the same period in 2020. The increase in insurance and claims expense was primarily attributable to an increase in vehicle insurance premiums as well as additional vehicle liability and cargo claims. See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations~~” ~~section below.~~

~~Fuel Expense~~

Expedited Freight fuel expense increased $590, or 16.6%, to $4,140 for the six months ended June 30, 2021 from $3,550 for the six months ended June 30, 2020. Fuel expense was 0.6% of Expedited Freight operating revenues for the six months ended June 30, 2021 compared to 0.7% for the same period in 2020. Expedited Freight fuel expense increased due to increased mileage and the rise in the average price of fuel for the six months ended June 30, 2021.

~~Other Operating Expenses~~

Expedited Freight other operating expenses increased $8,755, or 21.9%, to $48,645 for the six months ended June 30, 2021 from $39,890 for the six months ended June 30, 2020. Other operating expenses were 7.4% of Expedited Freight operating revenues for the six months ended June 30, 2021 compared to 8.2% for the same period in 2020. The increase in other operating expenses was driven by an increase in equipment maintenance costs, terminal and office expenses, legal and professional fees, other over-the-road costs and parts for final mile installations. For the six months ended June 30, 2020, other operating expenses included a $2,702 gain from changes in the fair value of an earn-out liability due to the timing of expected new business wins. A similar gain was not recorded for the six months ended June 30, 2021.

~~Income from Operations~~

Expedited Freight income from operations increased $32,285, or 119.9%, to $59,218 for the six months ended June 30, 2021 compared to $26,933 for the six months ended June 30, 2020. Income from operations was 9.0% of Expedited Freight operating revenues for six months ended June 30, 2021 compared to 5.5% for the same period in 2020. The increase in income from operations as a percentage of operating revenues was driven by increased revenue per hundredweight and higher number of shipments combine with cost-control measures and operational efficiencies, partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers.

~~Intermodal - Six Months EndedJune 30, 2021 compared to Six Months Ended June 30, 2020~~

~~The following table sets forth the historical financial data of our Intermodal segment for the six months ended June 30, 2021 and 2020:~~

~~Table of Contents~~

Intermodal Segment Information
(unaudited and in thousands)
Six Months Ended
June 30, 2021 Percent of Revenue June 30, 2020 Percent of Revenue Change Percent Change
Operating revenue $ 127,647 100.0 % $ 98,888 100.0 % $ 28,759 29.1 %
Operating expenses:
Purchased transportation 44,370 34.8 33,070 33.4 11,300 34.2
Salaries, wages and employee benefits 30,293 23.7 24,658 24.9 5,635 22.9
Operating leases 10,337 8.1 8,473 8.6 1,864 22.0
Depreciation and amortization 5,048 4.0 5,269 5.3 (221) (4.2)
Insurance and claims 4,757 3.7 3,762 3.8 995 26.4
Fuel expense 3,622 2.8 2,982 3.0 640 21.5
Other operating expenses 16,325 12.8 12,548 12.7 3,777 30.1
Total operating expenses 114,752 89.9 90,762 91.8 23,990 26.4
Income from operations 12,895 10.1 % $ 8,126 8.2 % $ 4,769 58.7 %

Intermodal Operating Statistics
Six Months Ended
June 30, 2021 June 30, 2020 Percent Change
Drayage shipments 186,714 151,448 23.3 %
Drayage revenue per shipment $ 587 $ 553 6.1 %
Number of locations 29 24 20.8 %

~~Table of Contents~~

~~Operating Revenues~~

Intermodal operating revenues increased $28,759, or 29.1%, to $127,647 for the six months ended June 30, 2021 from $98,888 for the six months ended June 30, 2020. The increase in operating revenues was primarily attributable to a 23.3% increase in drayage shipments over the same period in 2020 and an increase in accessorial revenues. The increase in drayage shipments was ~~driven by the combination of the economic recovery from COVID-19, which adversely impacted the results of operations for the~~ ~~six months ended June 30, 2020, and the Proficient Transport acquisition in February 2021.~~

~~Purchased Transportation~~

Intermodal purchased transportation increased $11,300, or 34.2%, to $44,370 for the six months ended June 30, 2021 from $33,070 for the six months ended June 30, 2020. Purchased transportation was 34.8%2.2% of Intermodal operating revenues for the six months ended June 30, ~~2021~~2022 compared to ~~33.4%~~3.7% for the same period in ~~2020. Intermodal purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits.~~2021. The increase in purchased transportation as a percentage of revenues was primarily due to the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers.

~~Salaries, Wages, and Employee Benefits~~

Intermodal salaries, wages and employee benefits increased $5,635, or 22.9%, to $30,293 for the six months ended June 30, 2021 compared to $24,658 for the six months ended June 30, 2020. Salaries, wages and employee benefits were 23.7% of Intermodal operating revenues for the six months ended June 30, 2021 compared to 24.9% for the same period in 2020. ~~The increase in salaries, wages and employee benefits expense was primarily due to the additional employees hired in response to the increase in shipments~~ ~~for the six months ended June 30, 2021 and an increased reserve for incentive compensation. Cost-control measures implemented in the prior year contributed to the~~ decrease~~in salaries, wages and employee benefits expense as a percentage of operating revenues.~~

~~Operating Leases~~

Intermodal operating leases increased $1,864, or 22.0%, to $10,337 for the six months ended June 30, 2021 from $8,473 for the six months ended June 30, 2020. Operating leases were 8.1% of Intermodal operating revenues for the six months ended June 30, 2021 compared to 8.6% for the same period in 2020. The increase in operating leases expense was primarily due to new trailer leases in 2021.

~~Depreciation and Amortization~~

Intermodal depreciation and amortization decreased $221, or 4.2%, to $5,048 for the six months ended June 30, 2021 from $5,269 for the six months ended June 30, 2020. Depreciation and amortization was 4.0% of Intermodal operating revenues for the six months ended June 30, 2021 compared to 5.3% for the same period in 2020. The decrease in depreciation and amortization expense was primarily due to the full depreciation of equipment obtained through acquisitions in 2020, partially offset by additional amortization expense resulting from the acquisition of Proficient Transport.

~~Insurance and Claims~~

Intermodal insurance and claims increased $995, or 26.4%, to $4,757 for the six months ended June 30, 2021 from $3,762 for the six months ended June 30, 2020. Insurance and claims were 3.7% of Intermodal operating revenues for the six months ended June 30, 2021 compared to 3.8% for the same period in 2020. ~~The increase~~ in insurance and claims expense was primarily due to the decrease in insurance premiums and vehicle liability claims, partially offset by an increase in vehicle ~~insurance premiums.~~repairs during the six months ended June 30, 2022 as compared to the same period in 2021. See additional ~~discussion~~discussion over the consolidated change in self-insurance reserves in the “Other Operations” section below.

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Fuel Expense

Intermodal fuel expense increased ~~$640,~~$4,677, or ~~21.5%~~129.1%, to $8,299 for the six months ended June 30, 2022 from $3,622 for the six months ended June 30, ~~2021 from $2,982 for the six months ended June 30, 2020.~~2021. Fuel expense was ~~2.8%~~4.2% of Intermodal operating revenues for the six months ended June 30, ~~2021~~2022 compared to ~~3.0%~~2.8% for the same period in ~~2020.~~2021. Intermodal fuel expense increased primarily due to ~~increased mileage and~~ the rise in the average price of fuel for the six months ended June 30, 2022 as compared to the same period in 2021.

Other Operating Expenses

Intermodal other operating expenses increased ~~$3,777,~~$31,044, or ~~30.1%~~190.2%, to $47,369 for the six months ended June 30, 2022 compared to $16,325 for the six months ended June 30, ~~2021 compared to $12,548 for the six months ended June 30, 2020.~~2021. Other operating expenses were ~~12.8%~~24.1% of Intermodal operating revenues for the six months ended June 30, ~~2021~~2022 compared to ~~12.7% from~~12.8% for the same period in ~~2020.~~2021. The increase in Intermodal other operating expenses was primarily due to additional expenses toincurred in support of the increased accessorial revenues, ~~noted above.~~increased bad debt expense and higher legal and professional fees for the six months ended June 30, 2022 as compared to the same period in 2021.

Income from Operations

Intermodal income from operations increased by ~~$4,769,~~$13,500, or ~~58.7%~~104.7%, to $26,395 for the six months ended June 30, 2022 compared to $12,895 for the six months ended June 30, ~~2021 compared to $8,126~~2021. Income from operations was 13.4% of Intermodal operating revenues for the six months ended June 30, ~~2020. Income from operations was 10.1% of Intermodal operating revenue for the six months ended June 30, 2021~~2022 compared to ~~8.2%~~10.1% for the same period in ~~2020.~~2021. The increase in income from operations as a percentage of operating revenues was ~~driven~~primarily due to increased drayage revenue per shipment, partially offset by the ~~operating leverage on fixed costs such as operating leases, depreciation~~change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and ~~amortization.~~Company-employed drivers and higher Lease Capacity Provider and third party carrier costs.

Other Operations - Six Months Ended June 30, ~~2021~~2022 compared to ~~Nine~~Six Months Ended June 30, ~~2020~~2021

Other operating ~~activity was~~included an $4,286 operating loss during the six months ended June 30, 2022 compared to a $7,265 operating loss during the six months ended June 30, ~~2021 and a $5,372 operating loss during the six months ended June 30, 2020.~~ 2021. The change in the operating loss was ~~driven~~primarily due to an increase in self-insurance reserves for vehicle liability claims, reserve for an incentive program established for certain employees in 2021, legal reserves and bad debt expense related to other receivables, partially offset by ~~increased~~a decrease in the reserves for group health insurance claims and professional fees. The increase in the self-insurance reserves for vehicle liability claims was due to the unfavorable loss development factor of historical claims. Professional fees related to cybersecurity and shareholder engagement activities and accrual for an incentive program established in 2021, partially offset by decreased self-insurance reserves for vehicle liability, workers’ compensation and group health insurance claims. The decrease in the ~~self-insurance reserves for vehicle liability and workers’ compensation claims was due to the favorable loss development factor~~amount of ~~historical claims attributable to the safety measures in place. For~~$6,955 were incurred during the six months ended June 30, ~~2020, severance costs in the amount of $997 were recorded in accordance with severance agreements for former employees.~~2021. Similar ~~severance costs~~professional fees were not ~~recorded for~~incurred during the six months ended June 30, ~~2021.~~2022.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in ~~accordance~~conformity with U.S. generally accepted accounting ~~principles.~~principles (“GAAP”). The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, ~~revenues~~ and ~~expenses and related~~ disclosures of contingent assets and ~~liabilities.~~liabilities at the date of the financial statements and expenses during the reporting period. On an ongoing basis, management evaluates estimates, including those related to allowance for doubtful accounts and revenue adjustments, deferred income taxes and uncertain tax positions, goodwill, other intangible and long-lived assets, and self-insurance loss reserves. Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions. A description of critical accounting policies and related judgments and estimates that affect the preparation of ~~our~~the Condensed Consolidated Financial Statements is set forth in ~~our~~the Annual Report on Form 10-K for the year-ended December 31, ~~2020.~~2021.

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Liquidity and Capital Resources

We have historically financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under our ~~revolving~~ credit facility. We believe that borrowings under our ~~revolving~~ credit facility, together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future. ~~In July~~To further support liquidity and cash reserves, in December 2021, we entered into ~~the second~~a third amendment to our ~~revolving~~ credit facility, which ~~extended~~increased the ~~maturity date~~amount available for borrowing to ~~July 20, 2026~~$450,000, consisting of a $300,000 revolving line of credit and ~~changed~~a term loan of $150,000. The amendment establishes annual mandatory repayment of the interest rate options available. In connection with the second amendment, we have replaced the London Interbank Offered Rate with the Bloomberg Short-Term Bank Yield Index rate as the reference rate in our revolving credit facility to calculate interest due to our lender. Additionally, under the second amendment, the credit facility may be increased by up to $75,000 to a maximum aggregate principal amount of ~~$300,000 pursuant to~~ the ~~terms of~~term loan of: 1.0% per annum in 2022 and 2023; 2.5% per annum in 2024 and 2025; 5.0% per annum in 2026; with the ~~amended credit agreement, subject to the lenders’ agreement to~~

~~Table of Contents~~

~~increase their commitments or the addition of new lenders extending such commitments.~~remaining unpaid principal being due on July 20, 2026. As of June 30, ~~2021,~~2022, we ~~are~~were in compliance with our financial ~~convents~~covenants contained in the ~~revolving~~ credit facility and expect to maintain such compliance. In the event that we encounter difficulties, our historical relationships with our lenders has been strong and we anticipate their continued long-term support of our business. Refer to Note 7, Indebtedness, to our Condensed Consolidated Financial Statements for additional information regarding our ~~revolving~~ credit facility.

Cash Flows

Continuing Operations

Net cash provided by ~~continuing~~ operating activities of continuing operations was ~~$39,661~~$112,820 for the six months ended June 30, ~~2021~~2022 compared to $59,929 for the six months ended June 30, 2020. The decrease in the net cash provided by continuing operating activities was primarily due to the increase in the accounts receivable and other receivable balances. The accounts receivable balance changed due to the increase in operating revenues$39,661 for the six months ended June 30, 2021. The increase in net cash provided by operating activities of continuing operations was primarily due to the increase in net income from continuing operations after consideration of non-cash items and a decrease in other receivables, ~~balance~~partially offset by a decrease in accounts payable, accrued expenses and other long-term liabilities. Other receivables changed ~~as a result~~due to the completion of the services rendered under the Transition Services Agreement ~~entered into~~ with the buyer of the Pool ~~business. Under~~business in October 2021. Accounts payable, accrued expenses and other long-term liabilities changed due to the ~~Transition Services Agreement, we remit payments~~number of days to ~~outside vendors on behalf of the buyer~~accrue for ~~expenses incurred by the Pool business, up to a limit of $18,000, and we are reimbursed by the buyer within 60 days from the end of the month in which the payment is remitted.~~payroll expense.

Net cash used in ~~continuing~~ investing activities of continuing operations was $58,339 for the six months ended June 30, 2022 compared to $29,804 for the six months ended June 30, ~~2021 compared to $69,157~~2021. Capital expenditures for the first six months ~~ended June 30, 2020.~~ of 2022 were $18,673, which primarily related to the purchase of technology and operating equipment, and the investment in the expansion of our national hub in Columbus, Ohio. Capital expenditures for the first six months of 2021 were $8,575, which primarily related to ~~an organic~~the investment ~~to expand~~in the ~~capacity~~expansion of our national hub in Columbus, Ohio. ~~Capital expenditures~~Investing activities of continuing operations for the first six months of ~~2020 were $14,214, which primarily related to~~2022 included the ~~organic investment to expand the capacity~~acquisition of ~~our national hub in Columbus, Ohio. Continuing~~Edgmon Trucking, LLC for a preliminary purchase price of $40,433 while investing activities for the first six months of 2021 included the acquisition of Proficient Transport for $15,000 and J&P Hall Express Delivery for ~~$7,543 while continuing investing activities for the first six months of 2020 included the acquisition of Linn Star Holdings, Inc., Linn Star Transfer, Inc. and Linn Star Logistics, LLC for $55,931.~~$7,543.

Net cash used in financing activities of continuing operations was $44,411 for the six months ended June 30, 2022 compared to cash provided by ~~continuing~~ financing activities ~~was~~of continuing operations of $733 for the six months ended June 30, ~~2021 compared to $25,395 for the six months ended June 30, 2020.~~2021. The change in the net cash ~~provided by~~used in financing activities of continuing ~~financing activities~~operations was primarily due to the decreased proceeds from the ~~revolving~~ credit facility, ~~for~~partially offset by the ~~first six months of 2021, increased~~decreased repurchases and retirement of common stock for the first six months of 2022 as compared to the same period in 2021. During the first six month of 2021, ~~partially offset by~~proceeds from the ~~payment of~~credit facility were $45,000 as compared to during the ~~earn-out liability for the~~first six months of ~~2020.~~2022 payments on the credit facility were $8,250.

Discontinued Operation

Net cash used in ~~discontinued~~ operating activities of discontinued operation was $— for the six months ended June 30, 2022 compared to $6,902 for the six months ended June 30, ~~2021 compared~~2021. The change in net cash used in operating activities of discontinued operation was primarily related to ~~$4,672~~a decrease in net income of discontinued operation after consideration of non-cash items. The sale of Pool was completed on February 12, 2021.

Net cash provided by investing activities of discontinued operation was $— for the six months ended June 30, ~~2020. The change in net cash used in discontinued operating activities was primarily related~~2022 compared to ~~a decrease in discontinued net income after consideration of non-cash items.~~

~~Net cash provided by discontinued investing activities was~~ $8,020 for the six months ended June 30, ~~2021 compared to net cash used in discontinued investing activities was $635 for the six months ended June 30, 2020.~~2021. The change in the net cash provided by ~~discontinued~~ investing activities of discontinued operation was due to the proceeds ~~of $8,000~~ received from the sale of the Pool business ~~for~~during the first six months of 2021. The sale of Pool was completed on February 12, 2021.

Net cash used in ~~discontinued~~ financing activities of discontinued operation was $— for the six months ended June 30, 2022 compared to $1,118 for the six months ended June 30, ~~2021 compared to net cash provided by discontinued financing activities was $5,307 for the six months ended June 30, 2020.~~2021. The change in the net cash used in ~~discontinued~~ financing activities of discontinued operation was due to decreased contributions ~~from~~to the parent. The sale of Pool was completed on February 12, 2021.

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Share Repurchase Program

During the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, we repurchased ~~366~~176 and ~~268~~366 shares of our common stock, respectively, for approximately ~~$33,992~~$17,780 and ~~$15,259,~~$33,992, respectively, through open market transactions. All shares received were retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained Earnings” in our Condensed Consolidated Balance Sheets.

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Forward-Looking Statements

This report contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or our future financial performance. In this Form 10-Q, forward-looking statements include, but are not limited to, any statements regarding the impact of the COVID-19 pandemic on our business, results of operations and financial condition, our pursuit of new revenue opportunities and steps to bolster our liquidity; any projections of earnings, revenues, dividends, or other financial items or methods of interpretation or measurement; any statements of plans, strategies, and objectives of management for future operations; any statements regarding the estimated earn-out from the sale of our Pool business; any statements regarding future performance; any statements regarding future insurance, claims and litigation and any associated estimates or projections; any statements concerning proposed or intended new services or developments and related integration costs; any statements regarding intended expansion through acquisition or greenfield start-ups; any statements regarding future economic conditions or performance based on our business strategy, including acquisitions; any statements related to the sufficiency of our credit facility; any statements related to our ESG and sustainability initiatives and operations; any statements regarding certain tax and accounting matters, including the impact on our financial statements; and any statements of belief and any statements of assumptions underlying any of the foregoing. Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.” .”In this Form 10-Q, forward-looking statements include, but are not limited to, any statements regarding (i) the impact of the COVID-19 pandemic on our business or our liquidity; (ii) results of operations and financial condition; (iii) any projections of earnings, revenues, dividends, or other financial items or methods of interpretation or measurement; (iv) plans, strategies, and objectives of management for future operations; (v) growing our less-than-truckload, final mile geographic footprint and Intermodal geographic footprint through greenfield start-ups as well as acquisitions; (vi) future and pending insurance, claims and litigation and any associated estimates or reserves; (vii) yield management; (viii) intentions to promote a healthier natural environment; (ix) proposed or intended new services, or developments, and related integration costs; (x) expected expansion and potential performance based on our business strategy, including acquisitions; (xi) future macroeconomic conditions, including but not limited to, labor shortages and other inflationary conditions and our ability to successfully address such conditions; (xii) the sufficiency of our credit facility; (xiii) our ESG and sustainability initiatives and operations; (xiv) plans to incorporate data requirements identified by widely accepted sustainability frameworks and set measurable targets and goals for our priority areas; and (xv) certain tax and accounting matters, including the impact on our financial statements; and any belief and any assumptions underlying any of the foregoing.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such 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, the impact of the COVID-19 pandemic on our business, results of operations and financial condition, the creditworthiness of our customers and their ability to pay for services rendered, more limited liquidity than expected which limits our ability to make key investments, 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, the inability of our information systems to handle an increased volume of freight moving through our network, changes in fuel prices, 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, loss of a major customer, increasing competition and pricing pressure, our ability to secure terminal facilities in desirable locations at reasonable rates, our inability to successfully integrate acquisitions, claims for property damage, personal injuries or workers’ compensation, enforcement of and changes in governmental regulations, environmental and tax matters, insurance matters, the handling of hazardous materials, and the risks described in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. As a result of the foregoing, no assurance can be given as to future financial condition, cash flows or results of operations. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Item 3.			Quantitative and Qualitative Disclosures About Market Risk.

For quantitative and qualitative disclosures about market risks, see “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of Part II of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. As of the second quarter ~~2021,~~of 2022, there ~~has been~~were no material changes in our exposures to market risk.


Item 4.			Controls and Procedures.

Disclosure Controls and Procedures

We maintain controls and procedures designed to ensure that we are able to collect the information required to be disclosed in the reports we file with the Securities and Exchange Commission (“SEC”), and to process, summarize and disclose this information within the time periods specified in the rules of the SEC. Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this report conducted by management, with the participation of the Chief Executive Officer and Chief Financial Officer, the Chief Executive Officer and Chief Financial Officer believe that these controls and procedures are effective to ensure that we are able to collect, process and disclose the information we are required to disclose in the reports we file with the SEC within the required time periods.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in connection with the evaluation described above that occurred during the three months ended June 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Part II.			Other Information

Item 1.			Legal Proceedings.

From time to time, we are a party to ordinary, routine litigation incidental to and arising in the normal course of our business, most of which involve claims for personal injury and property damage related to the transportation and handling of freight, or workers’ compensation. We accrue for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Based on the knowledge of the facts, we believe the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on our business, financial condition or results of operations. Moreover, the results of complex legal proceedings are difficult to predict, and our view of these matters may change in the future as the litigation and related events unfold.

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Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

The table below sets forth information with respect to purchases of our common stock made by or on behalf of us during the three months ended June 30, ~~2021:~~2022. There were no repurchases of our common stock during the three months ended June 30, 2022.

Period Total Number of Shares Purchased Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs1
April 1, 2021 through
April 30, 2021 — $ — — 3,254,695
May 1, 2021 through
May 31, 2021 115,625 95.15 115,625 3,139,070
June 1, 2021 through
June 30, 2021 137,064 94.79 137,064 3,002,006
Total 252,689 $ 94.96 252,689 3,002,006
1On February 5, 2019, our Board of Directors approved the 2019 Repurchase Plan authorizing up to 5.0 million shares of our common stock. The 2019 Share Repurchase Plan expires when the shares authorized for repurchase are exhausted or the 2019 Repurchase Plan is canceled.


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs1
April 1, 2022 through April 30, 2022	—	$	—	—	2,656,555
May 1, 2022 through May 31, 2022	—	—		—	2,656,555
June 1, 2022 through June 30, 2022	—	—		—	2,656,555
Total	—	$	—	—	2,656,555

1On February 5, 2019, our Board approved the 2019 Repurchase Plan authorizing up to 5.0 million shares of our common stock. The 2019 Share Repurchase Plan expires when the shares authorized for repurchase are exhausted or the 2019 Repurchase Plan is canceled.


Item 3.			Defaults Upon Senior Securities.

Not applicable.


Item 4.			Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~Not applicable.~~None.

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Item 6.			Exhibits.

~~In accordance with SEC Release No. 33-8212, Exhibit 32.1 is to be treated as “accompanying” this report rather than “filed” as part of the report.~~


No.						Exhibit
3.1						Restated Charter of the registrant (incorporated herein by reference to Exhibit 3 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 1999 (File No. 0-22490))
3.2						Amended and Restated Bylaws of the registrant (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 31, 2017 (File No. 0-22490))
10.1						~~Advisory~~Separation and General Release Agreement ~~effective April 5, 2021,~~ between Scott E. Schara and Forward Air Corporation ~~and Michael J. Morris~~ (~~incorporated here~~in(incorporated herein by reference to Exhibit 10.1 to the ~~registra~~nt ’s ~~Quarterly~~ R ~~eport~~registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 filed with the S e ~~curities~~Securities and Exchange Commission on May 4 ~~, 2021)~~
~~10.2~~						~~Rebecca J. Garbrick Offer Letter dated as of June 21, 2021 (incorporated herein by reference to Exhibit 10.1~~ ~~to the registrant~~’s ~~Current Report on Form 8-K~~ ~~filed with the Securities and Exchange Commission on June 25, 2021 (File No. 0-22490))~~
~~10.3~~						Second Amendment dated July 20, 2021 to Credit Agreement dated September 29, 2017 by and among Forward Air Corporation and Forward Air, Inc., as borrowers, certain subsidiaries of the borrowers as guarantors, Bank of America, N.A., as administrative agent and lender, U.S. Bank National Association, as lender and the other lenders part thereto.09, 2022)
31.1						Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))
31.2						Certification of ~~Principal~~ Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))
32.1						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
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101.PRE						XBRL Taxonomy Extension Presentation Linkbase
104						Cover Page Interactive File (formatted in Inline XBRL and contained in Exhibit 101).

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Forward Air Corporation
~~Date:~~ August 9, ~~2021~~2022	By:	/s/ Thomas Schmitt
		Thomas Schmitt President and Chief Executive Officer (Principal Executive Officer and Duly Authorized Officer)


		Forward Air Corporation
~~Date:~~ August 9, ~~2021~~2022	By:	/s/ Rebecca J. Garbrick
		Rebecca J. Garbrick Chief Financial Officer and Treasurer (Principal Financial Officer and Duly Authorized Officer)

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	February 28, 2021	June 30, 2021
Risk-free rate	0.1%	0.1%
Revenue discount rate	8.3%	8.3%
Revenue volatility	27.3%	19.7%


	Proficient Transport		J&P
	February 28, 2021		May 30, 2021
Tangible assets:
Accounts receivable	$	4,171	$	1,686

Prepaid expenses and other current assets	0		32
Property and equipment	140		934
Other assets	24		3


Total tangible assets	4,335		2,655
Intangible assets:
Customer relationships	6,060		1,580
Non-compete agreements	18		132

Goodwill	6,249		3,762
Total intangible assets	12,327		5,474
Total assets acquired	16,662		8,129

Liabilities assumed:
Current liabilities	323		586




Total liabilities assumed	323		586
Net assets acquired	$	16,339	$	7,543


	As of June 30, 2021
	Level 1		Level 2		Level 3		Total
Earn-out liability	$	0	$	0	$	7,309	$	7,309

	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
Earn-out liability	$	0	$	0	$	6,865	$	6,865


	June 30, 2021		December 31, 2020
Segment assets - continuing operations	$	1,081,841	$	973,294
Current assets held for sale	0		21,002
Noncurrent assets held for sale	0		53,097
Consolidated total assets	$	1,081,841	$	1,047,393


Expedited Freight Segment Information
(unaudited and in thousands)

	Three Months Ended
	June 30, 2021		Percent of Revenue		June 30, 2020		Percent of Revenue		Change		Percent Change
Operating revenues:
Network1	$	210,088	59.7	%	$	134,173	56.9	%	$	75,915	56.6	%
Truckload	56,968		16.2		41,857		17.8		15,111		36.1
Final Mile	69,883		19.9		53,427		22.7		16,456		30.8
Other	14,796		4.2		6,201		2.6		8,595		138.6
Total operating revenues	351,735		100.0		235,658		100.0		116,077		49.3

Operating expenses:
Purchased transportation	191,648		54.5		127,478		54.1		64,170		50.3
Salaries, wages and employee benefits	67,560		19.2		50,508		21.4		17,052		33.8
Operating leases	14,868		4.2		13,338		5.7		1,530		11.5
Depreciation and amortization	6,779		1.9		6,740		2.9		39		0.6
Insurance and claims	8,385		2.4		5,715		2.4		2,670		46.7
Fuel expense	2,147		0.6		1,406		0.6		741		52.7
Other operating expenses	25,660		7.3		18,720		7.9		6,940		37.1

Total operating expenses	317,047		90.1		223,905		95.0		93,142		41.6
Income from operations	$	34,688	9.9	%	$	11,753	5.0	%	$	22,935	195.1	%

1Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.


Intermodal Segment Information
(unaudited and in thousands)

	Three Months Ended
	June 30, 2021		Percent of Revenue		June 30, 2020		Percent of Revenue		Change		Percent Change
Operating revenues	$	69,133	100.0	%	$	46,428	100.0	%	$	22,705	48.9	%

Operating expenses:
Purchased transportation	23,767		34.4		14,904		32.1		8,863		59.5
Salaries, wages and employee benefits	16,230		23.5		11,728		25.3		4,502		38.4
Operating leases	5,500		8.0		4,045		8.7		1,455		36.0
Depreciation and amortization	2,612		3.8		2,648		5.7		(36)		(1.4)
Insurance and claims	2,355		3.4		1,789		3.9		566		31.6
Fuel expense	1,912		2.8		1,113		2.4		799		71.8
Other operating expenses	8,371		12.1		5,788		12.5		2,583		44.6
Total operating expenses	60,747		87.9		42,015		90.5		18,732		44.6
Income from operations	$	8,386	12.1	%	$	4,413	9.5	%	$	3,973	90.0	%