Forward Air (FWRD) 8-K Forward Air Corporation Reports Second Quarter 2010 Results

Exhibit 99.1

Forward Air Corporation Reports Second Quarter 2010 Results

GREENEVILLE, Tenn.--(BUSINESS WIRE)--July 22, 2010--Forward Air Corporation (NASDAQ:FWRD) today reported revenue, operating income, net income and diluted earnings per share for the second quarter and six months ended June 30, 2010.

Operating revenue for the quarter ended June 30, 2010 increased 22.5% to $122.1 million from $99.7 million for the same quarter in 2009. Income from operations was $13.5 million, compared with $4.9 million in the prior-year quarter. As a percent of operating revenue, income from operations increased to 11.1% from 4.9% for the same quarter last year. Net income during the period increased to $7.9 million from $2.8 million in the prior-year quarter. Income per diluted share from operations for the second quarter of 2010 was $0.27 compared with $0.10 in the prior-year quarter.

Operating revenue for the six months ended June 30, 2010 increased 16.7% to $229.1 million from $196.3 million for the same period in 2009. Income from operations was $19.6 million, compared with a $0.1 million loss in the prior-year period. As a percent of operating revenue, income from operations increased to 8.6% for the first six months of 2010 from a 0.1% loss from operations for the same period in 2009. Net income during the period was $11.3 million compared to a $0.3 million net loss in the prior-year period. Income per diluted share from operations for the first six months of 2010 was $0.39 compared with a $0.01 loss per diluted share in the prior-year period.

Bruce A. Campbell, Chairman, President, and CEO, said, "We are very pleased with our overall second quarter performance. The positive trends experienced in the first quarter have continued, and in some cases accelerated, during the second quarter.”

“Through the leverage in our airport-to-airport business model we were able to take advantage of much better year-over-year volumes, better operating efficiencies, improved yields and our continued focus on cost control. Sequentially, from the first quarter 2010, we were able to convert approximately half of our incremental revenue growth to the bottom line.”

“While our Solutions group suffered a small loss, which was largely attributable to unusually high health care expenses, we continued to make significant progress on our strategic initiatives. By the end of the quarter we had nearly completed the elimination of a large, unprofitable customer and have been able to replace most of the related revenue with new profitable business. Additionally, we have completed the process of identifying new industry verticals which, over time, will allow us to mitigate the harsh seasonal nature of our current specialty retail customer base.”

Commenting on the Company’s guidance for the third quarter, Rodney L. Bell, Senior Vice President and CFO, said, “We anticipate that our third quarter 2010 revenues will increase in the range of 20% to 25% over the comparable 2009 period, and we expect income per diluted share to be between $0.28 and $0.32 per share. This compares to $0.13 per share in the third quarter of 2009.”

Review of Financial Results

Forward Air will hold a conference call to discuss second quarter 2010 results on Friday, July 23, 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. 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						Six months ended
	June 30,			June 30,			June 30,			June 30,
	2010			2009			2010			2009
Operating revenue:
Forward Air
Airport-to-airport	$	81,741		$	65,182		$	152,628		$	128,240
Logistics		17,160			12,279			31,015			25,473
Other		6,389			5,666			12,264			11,379
Forward Air Solutions
Pool distribution		16,842			16,570			33,201			31,221
Total operating revenue		122,132			99,697			229,108			196,313
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport		32,501			27,830			61,300			53,983
Logistics		13,071			9,518			23,839			19,798
Other		1,616			1,230			3,108			2,294
Forward Air Solutions
Pool distribution		3,503			3,395			6,945			6,027
Total purchased transportation		50,691			41,973			95,192			82,102
Salaries, wages and employee benefits		33,167			29,187			63,837			58,243
Operating leases		6,252			6,820			12,880			13,809
Depreciation and amortization		5,107			4,823			10,055			9,682
Insurance and claims		2,106			2,223			4,437			4,939
Fuel expense		2,044			1,637			4,102			3,319
Other operating expenses		9,263			8,161			19,048			17,216
Impairment of goodwill and other intangible assets		--			--			--			7,157
Total operating expenses		108,630			94,824			209,551			196,467
Income (loss) from operations		13,502			4,873			19,557			(154	)
Other income (expense):
Interest expense		(181	)		(150	)		(366	)		(291	)
Other, net		(19	)		20			11			(2	)
Total other expense		(200	)		(130	)		(355	)		(293	)
Income (loss) before income taxes		13,302			4,743			19,202			(447	)
Income taxes		5,390			1,899			7,871			(186	)
Net income (loss)	$	7,912		$	2,844		$	11,331		$	(261	)
Net income (loss) per share:
Basic	$	0.27		$	0.10		$	0.39		$	(0.01	)
Diluted	$	0.27		$	0.10		$	0.39		$	(0.01	)
Weighted average shares outstanding:
Basic		28,973			28,927			28,962			28,916
Diluted		29,119			28,977			29,093			28,916
Dividends per share:	$	0.07		$	0.07		$	0.14		$	0.14

Forward Air Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
	June 30,		December 31,
	2010		2009 (a)
Assets
Current assets:
Cash	$	47,916	$	42,035
Accounts receivable, net		63,541		55,720
Other current assets		10,859		9,471
Total current assets		122,316		107,226
Property and equipment		211,696		204,716
Less accumulated depreciation and amortization		82,026		75,990
Total property and equipment, net		129,670		128,726
Goodwill and other acquired intangibles:
Goodwill		43,332		43,332
Other acquired intangibles, net		33,554		35,849
Total goodwill and other acquired intangibles		76,886		79,181
Other assets		1,625		1,597
Total assets	$	330,497	$	316,730
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	9,697	$	10,333
Accrued expenses		21,864		18,531
Current portion of debt and capital lease obligations		779		919
Total current liabilities		32,340		29,783
Debt and capital lease obligations, less current portion		51,819		52,169
Other long-term liabilities		6,047		4,485
Deferred income taxes		4,885		5,786
Shareholders’ equity:
Common stock		290		290
Additional paid-in capital		20,259		16,631
Retained earnings		214,857		207,586
Total shareholders’ equity		235,406		224,507
Total liabilities and shareholders’ equity	$	330,497	$	316,730
(a) Taken from audited financial statements, which are not presented in their entirety.

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Three Months Ended
	June 30,			June 30,
	2010			2009
Operating activities:
Net income	$	7,912		$	2,844
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		5,107			4,823
Share-based compensation		1,618			1,635
Gain on disposal of property and equipment		(8	)		(21	)
Provision for loss (recovery) on receivables		134			(256	)
Provision for revenue adjustments		414			574
Deferred income taxes		(791	)		(583	)
Tax benefit for stock options exercised		(5	)		--
Changes in operating assets and liabilities,
Accounts receivable		(5,664	)		(1,915	)
Prepaid expenses and other current assets		(2,400	)		(1,064	)
Accounts payable and accrued expenses		2,402			(1,101	)
Net cash provided by operating activities		8,719			4,936
Investing activities:
Proceeds from disposal of property and equipment		22			90
Purchases of property and equipment		(3,313	)		(10,288	)
Other		(69	)		468
Net cash used in investing activities		(3,360	)		(9,730	)
Financing activities:
Payments of debt and capital lease obligations		(229	)		(437	)
Proceeds from exercise of stock options		106			--
Payments of cash dividends		(2,028	)		(2,028	)
Common stock issued under employee stock purchase plan		91			99
Cash settlement of share-based awards for minimum tax withholdings		--			(9	)
Tax benefit for stock options exercised		5			--
Net cash used in financing activities		(2,055	)		(2,375	)
Net increase (decrease) in cash		3,304			(7,169	)
Cash at beginning of period		44,612			31,241
Cash at end of period	$	47,916		$	24,072

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Six Months Ended
	June 30,			June 30,
	2010			2009
Operating activities:
Net income (loss)	$	11,331		$	(261	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		10,055			9,682
Impairment of goodwill and other intangible assets		--			7,157
Share-based compensation		3,381			3,415
Gain on disposal of property and equipment		(7	)		(12	)
Provision for loss (recovery) on receivables		224			(291	)
Provision for revenue adjustments		837			1,368
Deferred income taxes		(1,664	)		(2,543	)
Tax benefit for stock options exercised		(9	)		--
Changes in operating assets and liabilities,
Accounts receivable		(8,882	)		6,091
Prepaid expenses and other current assets		(614	)		(359	)
Accounts payable and accrued expenses		4,259			(2,852	)
Net cash provided by operating activities		18,911			21,395
Investing activities:
Proceeds from disposal of property and equipment		42			217
Purchases of property and equipment		(8,739	)		(15,025	)
Other		(30	)		356
Net cash used in investing activities		(8,727	)		(14,452	)
Financing activities:
Payments of debt and capital lease obligations		(490	)		(773	)
Proceeds from exercise of stock options		144			--
Payments of cash dividends		(4,057	)		(4,053	)
Common stock issued under employee stock purchase plan		91			99
Cash settlement of share-based awards for minimum tax withholdings		--			(237	)
Tax benefit for stock options exercised		9			--
Net cash used in financing activities		(4,303	)		(4,964	)
Net increase in cash		5,881			1,979
Cash at beginning of period		42,035			22,093
Cash at end of period	$	47,916		$	24,072

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
	Three months ended
	June 30,			Percent of		June 30,			Percent of						%
	2010			Revenue		2009			Revenue			Change			Change
Operating revenue
Forward Air	$	105.6		86.5	%	$	83.3		83.6		%	$	22.3		26.8		%
FASI		16.9		13.8			16.7		16.7				0.2		1.2
Intercompany Eliminations		(0.4	)	(0.3	)		(0.3	)	(0.3	)			(0.1	)	33.3
Total		122.1		100.0			99.7		100.0				22.4		22.5
Purchased transportation
Forward Air		47.3		44.8			38.7		46.5				8.6		22.2
FASI		3.8		22.5			3.6		21.5				0.2		5.6
Intercompany Eliminations		(0.4	)	100.0			(0.3	)	100.0				(0.1	)	33.3
Total		50.7		41.5			42.0		42.2				8.7		20.7
Salaries, wages and employee benefits
Forward Air		25.4		24.0			21.1		25.3				4.3		20.4
FASI		7.7		45.5			8.1		48.5				(0.4	)	(4.9	)
Total		33.1		27.1			29.2		29.3				3.9		13.4
Operating leases
Forward Air		4.4		4.2			4.7		5.6				(0.3	)	(6.4	)
FASI		1.9		11.2			2.1		12.6				(0.2	)	(9.5	)
Total		6.3		5.2			6.8		6.8				(0.5	)	(7.4	)
Depreciation and amortization
Forward Air		4.1		3.9			3.9		4.7				0.2		5.1
FASI		1.0		5.9			0.9		5.4				0.1		11.1
Total		5.1		4.2			4.8		4.8				0.3		6.3
Insurance and claims
Forward Air		1.6		1.5			1.7		2.0				(0.1	)	(5.9	)
FASI		0.5		3.0			0.5		3.0				--		--
Total		2.1		1.7			2.2		2.2				(0.1	)	(4.5	)
Fuel expense
Forward Air		0.9		0.9			0.7		0.8				0.2		28.6
FASI		1.1		6.5			0.9		5.4				0.2		22.2
Total		2.0		1.6			1.6		1.6				0.4		25.0
Other operating expenses
Forward Air		7.7		7.3			6.7		8.1				1.0		14.9
FASI		1.6		9.5			1.5		9.0				0.1		6.7
Total		9.3		7.6			8.2		8.2				1.1		13.4
Income (loss) from operations
Forward Air		14.2		13.4			5.8		7.0				8.4		144.8
FASI		(0.7	)	(4.1	)		(0.9	)	(5.4	)			0.2		(22.2	)
Total	$	13.5		11.1	%	$	4.9		4.9		%	$	8.6		175.5		%

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
	Six months ended
	June 30,			Percent of		June 30,			Percent of						%
	2010			Revenue		2009			Revenue			Change			Change
Operating revenue
Forward Air	$	196.5		85.8	%	$	165.5		84.3		%	$	31.0		18.7		%
FASI		33.3		14.5			31.4		16.0				1.9		6.1
Intercompany Eliminations		(0.7	)	(0.3	)		(0.6	)	(0.3	)			(0.1	)	16.7
Total		229.1		100.0			196.3		100.0				32.8		16.7
Purchased transportation
Forward Air		88.3		44.9			76.2		46.1				12.1		15.9
FASI		7.5		22.5			6.4		20.4				1.1		17.2
Intercompany Eliminations		(0.6	)	85.7			(0.5	)	83.3				(0.1	)	20.0
Total		95.2		41.6			82.1		41.8				13.1		16.0
Salaries, wages and employee benefits
Forward Air		48.7		24.8			42.5		25.7				6.2		14.6
FASI		15.1		45.4			15.7		50.0				(0.6	)	(3.8	)
Total		63.8		27.8			58.2		29.7				5.6		9.6
Operating leases
Forward Air		8.8		4.5			9.5		5.7				(0.7	)	(7.4	)
FASI		4.1		12.3			4.3		13.7				(0.2	)	(4.7	)
Total		12.9		5.6			13.8		7.0				(0.9	)	(6.5	)
Depreciation and amortization
Forward Air		8.2		4.2			7.9		4.8				0.3		3.8
FASI		1.9		5.7			1.8		5.7				0.1		5.6
Total		10.1		4.4			9.7		4.9				0.4		4.1
Insurance and claims
Forward Air		3.5		1.8			4.0		2.4				(0.5	)	(12.5	)
FASI		0.9		2.7			0.9		2.9				--		--
Total		4.4		1.9			4.9		2.5				(0.5	)	(10.2	)
Fuel expense
Forward Air		1.8		0.9			1.5		0.9				0.3		20.0
FASI		2.3		6.9			1.8		5.7				0.5		27.8
Total		4.1		1.8			3.3		1.7				0.8		24.2
Other operating expenses
Forward Air		15.8		8.0			14.1		8.5				1.7		12.1
FASI		3.3		9.9			3.2		10.2				0.1		3.1
Intercompany Eliminations		(0.1	)	14.3			(0.1	)	16.7				--		--
Total		19.0		8.3			17.2		8.8				1.8		10.5
Impairment of goodwill
and other intangible assets
Forward Air		--		--			0.2		0.1				(0.2	)	NM
FASI		--		--			7.0		22.3				(7.0	)	NM
Total		--		--			7.2		3.7				(7.2	)	NM
Income (loss) from operations
Forward Air		21.4		10.9			9.6		5.8				11.8		122.9
FASI		(1.8	)	(5.4	)		(9.7	)	(30.9	)			7.9		(81.4	)
Total	$	19.6		8.6	%	$	(0.1	)	(0.1	)	%	$	19.7		NM		%
NM - Not Meaningful

Forward Air Corporation
Forward Air Inc. Operating Statistics
		Three months ended
		June 30,			June 30,		Percent
		2010			2009		Change
Operating ratio		86.6	%		93.0	%	(6.9	)	%
Business days		64.0			64.0		--
Business weeks		12.8			12.8		--
Airport-to-airport:
Tonnage
Total pounds ¹		423,965			357,678		18.5
Average weekly pounds ¹		33,122			27,944		18.5
Linehaul shipments
Total linehaul		575,466			514,452		11.9
Average weekly		44,958			40,192		11.9
Forward Air Complete shipments		78,496			67,109		17.0
As a percentage of linehaul shipments		13.6	%		13.0	%	4.6
Average linehaul shipment size		737			695		6.0
Revenue per pound ²
Linehaul yield	$	16.26		$	15.93		1.8
Fuel surcharge impact		1.24			0.69		3.0
Forward Air Complete impact		1.80			1.64		0.9
Total airport-to-airport yield	$	19.30		$	18.26		5.7
Logistics:
Miles
Owner operator ¹		7,006			6,211		12.8
Third party ¹		3,377			1,800		87.6
Total Miles		10,383			8,011		29.6
Revenue per mile	$	1.67		$	1.54		8.4
Cost per mile	$	1.26		$	1.19		5.9		%
¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.

Forward Air Corporation
Forward Air Inc. Operating Statistics
		Six months ended
		June 30,			June 30,		Percent
		2010			2009		Change
Operating ratio		89.1	%		94.2	%	(5.4	)	%
Business days		127.0			127.0		--
Business weeks		25.4			25.4		--
Airport-to-airport:
Tonnage
Total pounds ¹		802,590			696,280		15.3
Average weekly pounds ¹		31,598			27,413		15.3
Linehaul shipments
Total linehaul		1,121,809			1,017,272		10.3
Average weekly		44,166			40,050		10.3
Forward Air Complete shipments		147,602			120,998		22.0
As a percentage of linehaul shipments		13.2	%		11.9	%	10.9
Average linehaul shipment size		715			684		4.5
Revenue per pound ²
Linehaul yield	$	16.10		$	16.26		(0.9	)
Fuel surcharge impact		1.17			0.71		2.5
Forward Air Complete impact		1.77			1.48		1.6
Total airport-to-airport yield	$	19.04		$	18.45		3.2
Logistics:
Miles
Owner operator ¹		12,943			11,806		9.6
Third party ¹		6,114			4,421		38.3
Total Miles		19,057			16,227		17.4
Revenue per mile	$	1.64		$	1.58		3.8
Cost per mile	$	1.25		$	1.22		2.5		%
¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.

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 injuries 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.

CONTACT:
Forward Air Corporation
Rodney L. Bell, 423-636-7000
rbell@forwardair.com