Forward Air (FWRD) 8-K Forward Air Corporation Reports

Exhibit 99.1

FORWARD AIR CORPORATION REPORTS

THIRD QUARTER 2010 RESULTS

GREENEVILLE, Tenn. - (BUSINESS WIRE) – October 20, 2010 - Forward Air Corporation (NASDAQ:FWRD) today reported revenue, operating income, net income and diluted earnings per share for the third quarter and nine months ended September 30, 2010.

Operating revenue for the quarter ended September 30, 2010 increased 17.8% to $121.5 million from $103.1 million for the same quarter in 2009.  Income from operations was $15.5 million, compared with $6.7 million in the prior-year quarter.  As a percent of operating revenue, income from operations increased to 12.8% from 6.5% for the same quarter last year.  Net income during the period increased to $8.9 million from $3.8 million in the prior-year quarter.  Income per diluted share for the third quarter of 2010 was $0.31 compared with $0.13 in the prior-year quarter.

Operating revenue for the nine months ended September 30, 2010 increased 17.1% to $350.6 million from $299.4 million for the same period in 2009.  Income from operations was $35.1 million, compared with $6.5 million in the prior-year period.  As a percent of operating revenue, income from operations increased to 10.0% for the first nine months of 2010 from 2.2% for the same period in 2009.  Net income during the period was $20.2 million compared to $3.5 million in the prior-year period.  Income per diluted share for the first nine months of 2010 was $0.69 compared with $0.12 in the prior-year period.

Bruce A. Campbell, Chairman, President, and CEO, commenting on the third quarter said, "We are pleased with another strong quarterly performance in our Forward Air, Inc. business segment. We were encouraged that our airport-to-airport tonnages in the third quarter and thus far into the fourth quarter resemble what we typically experience in a normal operating environment. After a midsummer lull, volumes for the balance of the quarter and into October steadily increased in a peak-like fashion. While this gives us cause for optimism, we will monitor our tonnage trends closely in order to be ready to react in the event of a premature pull-back.”

Commenting further, Mr. Campbell said, “We continued to make progress in our Forward Air Solutions segment through better cost control as well as our efforts to diversify our customer base. Operating at near a breakeven for the third quarter we anticipate Solutions to be an earnings contributor in the fourth quarter at least to the same degree as that same quarter in 2009.”

In closing Mr. Campbell said, “The continued efforts of our employees and independent contractors does not go unnoticed. Their consistent commitment to quality and safety allow us to remain a leader in our industry. Thank you to those men and women for their dedication to excellence.”

Commenting on the Company’s guidance for the fourth quarter, Rodney L. Bell, Senior Vice President and CFO, said, “We anticipate that our fourth quarter 2010 revenues will increase in the range of 12% to 17% over the comparable 2009 period, and we expect income per diluted share to be between $0.35 and $0.39 per share. This compares to $0.22 per share in the fourth quarter of 2009.”

Review of Financial Results

Forward Air will hold a conference call to discuss third quarter 2010 results on Thursday, October 21, 2010 at 9:00 a.m. EST.  The Company’s conference call will be available online at www.forwardair.com or by dialing 800.841.9385, pass code 57279270.  A replay of the conference call will be available at www.forwardair.com beginning shortly after the completion of the live call.

About Forward Air Corporation

Forward Air Corporation operates two business segments, Forward Air, Inc. and Forward Air Solutions, Inc.

Forward Air, Inc. is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of terminals located on or near major airports in 84 cities in the United States and Canada.  It provides these services as a cost-effective alternative to air transportation of cargo that must be delivered at a specific time but is relatively less time-sensitive than traditional air freight or when air transportation is not economical.

Forward Air Solutions, Inc. is a provider of pool distribution services. Pool distribution involves the consolidation and shipment of several smaller less-than-truckload shipments to a common area or region. Once at the regional destination, the loads are deconsolidated, then grouped with other shipments with common delivery points, and delivered in a very precise, time-sensitive manner. Our pool distribution network consists of terminals and service locations in 19 cities within the Mid-Atlantic, Southeast, Midwest and Southwestern United States.

Forward Air Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
	Three months ended						Nine months ended
	September 30,			September 30,			September 30,			September 30,
	2010			2009			2010			2009
Operating revenue:
Forward Air
Airport-to-airport	$	81,828		$	66,667		$	234,456		$	194,908
Logistics		16,774			13,172			47,789			38,645
Other		6,481			5,596			18,745			16,975
Forward Air Solutions
Pool distribution		16,439			17,644			49,639			48,864
Total operating revenue		121,522			103,079			350,629			299,392
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport		32,852			28,025			94,152			82,008
Logistics		12,942			10,329			36,780			30,127
Other		1,703			1,387			4,811			3,681
Forward Air Solutions
Pool distribution		3,680			3,747			10,625			9,774
Total purchased transportation		51,177			43,488			146,368			125,590
Salaries, wages and employee benefits		31,845			28,591			95,682			86,834
Operating leases		6,508			6,631			19,388			20,440
Depreciation and amortization		5,228			5,006			15,283			14,687
Insurance and claims		1,546			2,045			5,983			6,984
Fuel expense		1,949			1,880			6,051			5,199
Other operating expenses		7,764			8,767			26,813			25,983
Impairment of goodwill and other intangible assets		--			--			--			7,157
Total operating expenses		106,017			96,408			315,568			292,874
Income from operations		15,505			6,671			35,061			6,518
Other income (expense):
Interest expense		(191	)		(177	)		(557	)		(469	)
Other, net		26			51			38			50
Total other expense		(165	)		(126	)		(519	)		(419	)
Income before income taxes		15,340			6,545			34,542			6,099
Income taxes		6,452			2,766			14,323			2,581
Net income	$	8,888		$	3,779		$	20,219		$	3,518
Net income per share:
Basic	$	0.31		$	0.13		$	0.70		$	0.12
Diluted	$	0.31		$	0.13		$	0.69		$	0.12
Weighted average shares outstanding:
Basic		29,000			28,942			28,975			28,924
Diluted		29,129			29,026			29,101			28,978
Dividends per share:	$	0.07		$	0.07		$	0.21		$	0.21

2

Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
	September 30,		December 31,
	2010		2009 (a)
Assets
Current assets:
Cash	$	63,219	$	42,035
Accounts receivable, net		62,438		55,720
Other current assets		11,484		9,471
Total current assets		137,141		107,226
Property and equipment		210,954		204,716
Less accumulated depreciation and amortization		83,615		75,990
Total property and equipment, net		127,339		128,726
Goodwill and other acquired intangibles:
Goodwill		43,332		43,332
Other acquired intangibles, net		32,406		35,849
Total goodwill and other acquired intangibles		75,738		79,181
Other assets		1,595		1,597
Total assets	$	341,813	$	316,730
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	11,383	$	10,333
Accrued expenses		23,326		18,531
Current portion of debt and capital lease obligations		672		919
Total current liabilities		35,381		29,783
Debt and capital lease obligations, less current portion		51,023		52,169
Other long-term liabilities		6,159		4,485
Deferred income taxes		5,116		5,786
Shareholders’ equity:
Common stock		290		290
Additional paid-in capital		22,130		16,631
Retained earnings		221,714		207,586
Total shareholders’ equity		244,134		224,507
Total liabilities and shareholders’ equity	$	341,813	$	316,730

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

3

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Three months ended
	September 30,			September 30,
	2010			2009
Operating activities:
Net income	$	8,888		$	3,779
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		5,228			5,006
Share-based compensation		1,506			1,607
Gain on disposal of property and equipment		(641	)		(1	)
Provision for (recovery) loss on receivables		(22	)		217
Provision for revenue adjustments		625			548
Deferred income taxes		40			(466	)
Tax benefit for stock options exercised		(19	)		(1	)
Changes in operating assets and liabilities
Accounts receivable		500			(3,721	)
Prepaid expenses and other current assets		(415	)		(1,208	)
Accounts payable and accrued expenses		3,260			3,552
Net cash provided by operating activities		18,950			9,312
Investing activities:
Proceeds from disposal of property and equipment		1,371			14
Purchases of property and equipment		(3,150	)		(3,803	)
Other		30			49
Net cash used in investing activities		(1,749	)		(3,740	)
Financing activities:
Payments of debt and capital lease obligations		(232	)		(390	)
Proceeds from exercise of stock options		346			8
Payments of cash dividends		(2,031	)		(2,028	)
Cash settlement of share-based awards for minimum tax withholdings		--			(5	)
Tax benefit for stock options exercised		19			1
Net cash used in financing activities		(1,898	)		(2,414	)
Net increase in cash		15,303			3,158
Cash at beginning of period		47,916			24,072
Cash at end of period	$	63,219		$	27,230

4

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Nine months ended
	September 30,			September 30,
	2010			2009
Operating activities:
Net income	$	20,219		$	3,518
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		15,283			14,687
Impairment of goodwill and other intangible assets		--			7,157
Share-based compensation		4,887			5,022
Gain on disposal of property and equipment		(648	)		(13	)
Provision for loss (recovery) on receivables		202			(74	)
Provision for revenue adjustments		1,462			1,916
Deferred income taxes		(1,624	)		(3,009	)
Tax benefit for stock options exercised		(28	)		(1	)
Changes in operating assets and liabilities
Accounts receivable		(8,382	)		2,370
Prepaid expenses and other current assets		(1,029	)		(1,567	)
Accounts payable and accrued expenses		7,519			701
Net cash provided by operating activities		37,861			30,707
Investing activities:
Proceeds from disposal of property and equipment		1,413			231
Purchases of property and equipment		(11,889	)		(18,828	)
Other		--			405
Net cash used in investing activities		(10,476	)		(18,192	)
Financing activities:
Payments of debt and capital lease obligations		(722	)		(1,163	)
Proceeds from exercise of stock options		490			8
Payments of cash dividends		(6,088	)		(6,081	)
Common stock issued under employee stock purchase plan		91			99
Cash settlement of share-based awards for minimum tax withholdings		--			(242	)
Tax benefit for stock options exercised		28			1
Net cash used in financing activities		(6,201	)		(7,378	)
Net increase in cash		21,184			5,137
Cash at beginning of period		42,035			22,093
Cash at end of period	$	63,219		$	27,230

5

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
	Three months ended
	September 30,			Percent of		September 30,			Percent of					Percent
	2010			Revenue		2009			Revenue		Change			Change
Operating revenue
Forward Air	$	105.3		86.7	%	$	85.7		83.1	%	$	19.6		22.9	%
FASI		16.5		13.6			17.8		17.3			(1.3	)	(7.3	)
Intercompany Eliminations		(0.3	)	(0.3	)		(0.4	)	(0.4	)		0.1		(25.0	)
Total		121.5		100.0			103.1		100.0			18.4		17.8
Purchased transportation
Forward Air		47.5		45.1			39.8		46.4			7.7		19.3
FASI		3.9		23.6			4.0		22.5			(0.1	)	(2.5	)
Intercompany Eliminations		(0.3	)	100.0			(0.3	)	75.0			--		--
Total		51.1		42.1			43.5		42.2			7.6		17.5
Salaries, wages and employee benefits
Forward Air		24.7		23.4			20.6		24.0			4.1		19.9
FASI		7.2		43.6			8.0		44.9			(0.8	)	(10.0	)
Total		31.9		26.3			28.6		27.7			3.3		11.5
Operating leases
Forward Air		4.7		4.5			4.6		5.4			0.1		2.2
FASI		1.8		10.9			2.0		11.2			(0.2	)	(10.0	)
Total		6.5		5.3			6.6		6.4			(0.1	)	(1.5	)
Depreciation and amortization
Forward Air		4.2		4.0			4.1		4.8			0.1		2.4
FASI		1.0		6.1			0.9		5.1			0.1		11.1
Total		5.2		4.3			5.0		4.9			0.2		4.0
Insurance and claims
Forward Air		1.2		1.1			1.6		1.9			(0.4	)	(25.0	)
FASI		0.3		1.8			0.4		2.2			(0.1	)	(25.0	)
Total		1.5		1.2			2.0		1.9			(0.5	)	(25.0	)
Fuel expense
Forward Air		0.9		0.9			0.8		0.9			0.1		12.5
FASI		1.1		6.7			1.1		6.2			--		--
Total		2.0		1.6			1.9		1.8			0.1		5.3
Other operating expenses
Forward Air		6.4		6.1			7.0		8.2			(0.6	)	(8.6	)
FASI		1.4		8.5			1.9		10.7			(0.5	)	(26.3	)
Intercompany Eliminations		-		-			(0.1	)	25.0			0.1		(100.0	)
Total		7.8		6.4			8.8		8.6			(1.0	)	(11.4	)
Income (loss) from operations
Forward Air		15.7		14.9			7.2		8.4			8.5		118.1
FASI		(0.2	)	(1.2	)		(0.5	)	(2.8	)		0.3		(60.0	)
Total	$	15.5		12.8	%	$	6.7		6.5	%	$	8.8		131.3	%

6

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
	Nine months ended
	September 30,			Percent of		September 30,			Percent of					Percent
	2010			Revenue		2009			Revenue		Change			Change
Operating revenue
Forward Air	$	301.8		86.1	%	$	251.2		83.9	%	$	50.6		20.1	%
FASI		49.8		14.2			49.2		16.4			0.6		1.2
Intercompany Eliminations		(1.0	)	(0.3	)		(1.0	)	(0.3	)		--		--
Total		350.6		100.0			299.4		100.0			51.2		17.1
Purchased transportation
Forward Air		135.9		45.0			116.1		46.2			19.8		17.1
FASI		11.4		22.9			10.4		21.1			1.0		9.6
Intercompany Eliminations		(0.9	)	90.0			(0.9	)	90.0			--		--
Total		146.4		41.8			125.6		42.0			20.8		16.6
Salaries, wages and employee benefits
Forward Air		73.4		24.3			63.1		25.1			10.3		16.3
FASI		22.3		44.8			23.7		48.2			(1.4	)	(5.9	)
Total		95.7		27.3			86.8		29.0			8.9		10.3
Operating leases
Forward Air		13.6		4.5			14.1		5.6			(0.5	)	(3.5	)
FASI		5.8		11.7			6.3		12.8			(0.5	)	(7.9	)
Total		19.4		5.5			20.4		6.8			(1.0	)	(4.9	)
Depreciation and amortization
Forward Air		12.3		4.1			12.0		4.8			0.3		2.5
FASI		2.9		5.8			2.7		5.5			0.2		7.4
Total		15.2		4.3			14.7		4.9			0.5		3.4
Insurance and claims
Forward Air		4.7		1.6			5.6		2.2			(0.9	)	(16.1	)
FASI		1.3		2.6			1.4		2.8			(0.1	)	(7.1	)
Total		6.0		1.7			7.0		2.3			(1.0	)	(14.3	)
Fuel expense
Forward Air		2.7		0.9			2.3		0.9			0.4		17.4
FASI		3.3		6.6			2.9		5.9			0.4		13.8
Total		6.0		1.7			5.2		1.7			0.8		15.4
Other operating expenses
Forward Air		22.1		7.3			21.0		8.4			1.1		5.2
FASI		4.8		9.6			5.1		10.4			(0.3	)	(5.9	)
Intercompany Eliminations		(0.1	)	10.0			(0.1	)	10.0			--		--
Total		26.8		7.7			26.0		8.7			0.8		3.1
Impairment of goodwill and other intangible assets
Forward Air		--		--			0.2		0.1			(0.2	)	(100.0	)
FASI		--		--			7.0		14.2			(7.0	)	(100.0	)
Total		--		--			7.2		2.4			(7.2	)	(100.0	)
Income (loss) from operations
Forward Air		37.1		12.3			16.8		6.7			20.3		120.8
FASI		(2.0	)	(4.0	)		(10.3	)	(20.9	)		8.3		(80.6	)
Total	$	35.1		10.0	%	$	6.5		2.2	%	$	28.6		440.0	%

7

Forward Air Corporation
Forward Air Inc. Operating Statistics
	Three months ended
	September 30,			September 30,			Percent
	2010			2009			Change
Operating ratio		85.1	%		91.6	%	(7.1	)	%
Business days		64.0			64.0		--
Business weeks		12.8			12.8		--
Airport-to-airport:
Tonnage
Total pounds ¹		414,508			357,768		15.9
Average weekly pounds ¹		32,383			27,951		15.9
Linehaul shipments
Total linehaul		563,448			511,959		10.1
Average weekly		44,019			39,997		10.1
Forward Air Complete shipments		80,684			73,696		9.5
As a percentage of linehaul shipments		14.3	%		14.4	%	(0.7	)
Average linehaul shipment size		736			699		5.3
Revenue per pound ²
Linehaul yield	$	16.64		$	15.91		3.9
Fuel surcharge impact		1.20			0.93		1.4
Forward Air Complete impact		1.93			1.83		0.5
Total airport-to-airport yield	$	19.77		$	18.67		5.9
Logistics:
Miles
Owner operator ¹		6,964			6,111		14.0
Third party ¹		3,212			2,288		40.4
Total Miles		10,176			8,399		21.2
Revenue per mile	$	1.66		$	1.58		5.1
Cost per mile	$	1.27		$	1.23		3.3		%
¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.

8

Forward Air Corporation
Forward Air Inc. Operating Statistics
	Nine months ended
	September 30,			September 30,			Percent
	2010			2009			Change
Operating ratio		87.7	%		93.3	%	(6.0	)	%
Business days		191.0			191.0		--
Business weeks		38.2			38.2		--
Airport-to-airport:
Tonnage
Total pounds ¹		1,217,097			1,054,048		15.5
Average weekly pounds ¹		31,861			27,593		15.5
Linehaul shipments
Total linehaul		1,685,257			1,529,301		10.2
Average weekly		44,117			40,034		10.2
Forward Air Complete shipments		228,286			194,694		17.3
As a percentage of linehaul shipments		13.5	%		12.7	%	6.4
Average linehaul shipment size		722			689		4.8
Revenue per pound ²
Linehaul yield	$	16.29		$	16.14		0.8
Fuel surcharge impact		1.18			0.79		2.1
Forward Air Complete impact		1.82			1.60		1.2
Total airport-to-airport yield	$	19.29		$	18.53		4.1
Logistics:
Miles
Owner operator ¹		19,907			17,916		8.1
Third party ¹		9,326			6,709		10.6
Total Miles		29,233			24,625		18.7
Revenue per mile	$	1.65		$	1.58		4.4
Cost per mile	$	1.26		$	1.22		3.3		%
¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.

9

Important Information

This press release 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.  Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.”  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, our inability to maintain our historical growth rate because of a decreased volume of freight moving through our network or decreased average revenue per pound of freight moving through our network, increasing competition and pricing pressure, surplus inventories, loss of a major customer, the creditworthiness of our customers and their ability to pay for services rendered, our ability to secure terminal facilities in desirable locations at reasonable rates, the inability of our information systems to handle an increased volume of freight moving through our network, changes in fuel prices, claims for property damage, personal injurie s or workers’ compensation, employment matters including rising health care costs, enforcement of and changes in governmental regulations, environmental and tax matters, the handling of hazardous materials, the availability and compensation of qualified independent owner-operators and freight handlers needed to serve our transportation needs and our inability to successfully integrate acquisitions.  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.

-END-

CONTACT:    

Forward Air Corporation

Rodney L. Bell, 423-636-7000

rbell@forwardair.com