Forward Air (FWRD) 8-K Forward Air Corporation Reports Second Quarter 2011 Results

Exhibit 99.1

Forward Air Corporation Reports Second Quarter 2011 Results

GREENEVILLE, Tenn.--(BUSINESS WIRE)--July 20, 2011--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, 2011.

Operating revenue for the quarter ended June 30, 2011 increased 8.3% to $132.2 million from $122.1 million for the same quarter in 2010. Income from operations was $19.9 million, compared with $13.5 million in the prior-year quarter. As a percent of operating revenue, income from operations increased to 15.1% from 11.1% for the same quarter last year. Net income during the period increased to $12.0 million from $7.9 million in the prior-year quarter. Income per diluted share for the second quarter of 2011 was $0.40 compared with $0.27 in the prior-year quarter.

Operating revenue for the six months ended June 30, 2011 increased 10.2% to $252.4 million from $229.1 million for the same period in 2010. Income from operations was $33.2 million, compared with $19.6 million in the prior-year period. As a percent of operating revenue, income from operations increased to 13.1% for the first six months of 2011 from 8.6% for the same period in 2010. Net income during the period was $19.8 million compared to $11.3 million in the prior-year period. Income per diluted share from operations for the first six months of 2011 was $0.67 compared with $0.39 in the prior-year period.

Bruce A. Campbell, Chairman, President, and CEO, commenting on the second quarter said, “We are pleased to announce that the hard work and dedication of our employees and independent contractors has once again produced outstanding quarterly results. In our core airport-to-airport business, our yield remained strong, which was driven in part by our June 6, 2011 general rate increase along with continued pricing discipline. Our tonnage volumes, while positive each month of the quarter, saw some periodic softness. This softness, which we view as a function of the macroeconomic environment, appears to be persisting somewhat into the third quarter.”

Commenting further, Mr. Campbell said, “Our Forward Air Solutions team continues to make steady progress by nearly cutting in half the $0.02 earnings per share deficit from a year ago. With a solid cost model and the full benefit of new business wins we fully expect Solutions to be a positive contributor to earnings in the third quarter.”

Also commenting on the quarter, Rodney L. Bell, Senior Vice President and CFO said, “On the strength of an impressive $17.3 million in cash provided by operating activities we were able to increase our cash balance by $10.4 million in the quarter. We ended the quarter with $96.1 million in cash, $50 million outstanding on our line of credit and $38.2 million of availability on our credit facility.”

Commenting on the Company’s guidance for the second quarter, Mr. Bell said, “We anticipate that our third quarter 2011 revenues will increase in the range of 6% to 10% over the comparable 2010 period, and we expect income per diluted share to be between $0.38 and $0.42 per share. This compares to $0.31 per share in the third quarter of 2010.”

Review of Financial Results

Forward Air will hold a conference call to discuss second quarter 2011 results on Thursday, July 21, 2011 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800.841.9385, pass code 15649968. 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,
	2011			2010			2011			2010
Operating revenue:
Forward Air
Airport-to-airport	$	91,493		$	81,741		$	173,640		$	152,628
Logistics		18,005			17,160			34,500			31,015
Other		6,871			6,389			13,274			12,264
Forward Air Solutions
Pool distribution		15,823			16,842			30,980			33,201
Total operating revenue		132,192			122,132			252,394			229,108
Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport		35,675			32,501			68,269			61,300
Logistics		13,373			13,071			26,173			23,839
Other		1,659			1,616			3,132			3,108
Forward Air Solutions
Pool distribution		3,502			3,503			6,958			6,945
Total purchased transportation		54,209			50,691			104,532			95,192
Salaries, wages and employee benefits		31,439			33,167			61,934			63,837
Operating leases		6,705			6,252			13,411			12,880
Depreciation and amortization		5,222			5,107			10,304			10,055
Insurance and claims		1,845			2,106			4,020			4,437
Fuel expense		2,564			2,044			4,952			4,102
Other operating expenses		10,332			9,263			20,079			19,048
Total operating expenses		112,316			108,630			219,232			209,551
Income from operations		19,876			13,502			33,162			19,557
Other income (expense):
Interest expense		(141	)		(181	)		(336	)		(366	)
Other, net		31			(19	)		47			11
Total other expense		(110	)		(200	)		(289	)		(355	)
Income before income taxes		19,766			13,302			32,873			19,202
Income taxes		7,797			5,390			13,035			7,871
Net income	$	11,969		$	7,912		$	19,838		$	11,331
Net income per share:
Basic	$	0.41		$	0.27		$	0.68		$	0.39
Diluted	$	0.40		$	0.27		$	0.67		$	0.39
Weighted average shares outstanding:
Basic		29,337			28,973			29,236			28,962
Diluted		29,851			29,119			29,618			29,093
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,
	2011		2010 (a)
Assets
Current assets:
Cash	$	96,119	$	74,504
Accounts receivable, net		69,779		62,763
Other current assets		10,053		8,696
Total current assets		175,951		145,963
Property and equipment		221,715		213,704
Less accumulated depreciation and amortization		88,517		87,272
Total property and equipment, net		133,198		126,432
Goodwill and other acquired intangibles:
Goodwill		43,332		43,332
Other acquired intangibles, net		28,963		31,259
Total goodwill and other acquired intangibles		72,295		74,591
Other assets		1,535		1,810
Total assets	$	382,979	$	348,796
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	15,354	$	10,687
Accrued expenses		17,933		16,280
Current portion of debt and capital lease obligations		583		638
Total current liabilities		33,870		27,605
Debt and capital lease obligations, less current portion		50,611		50,883
Other long-term liabilities		7,782		8,106
Deferred income taxes		7,980		6,116
Shareholders’ equity:
Common stock		294		290
Additional paid-in capital		35,231		24,300
Retained earnings		247,211		231,496
Total shareholders’ equity		282,736		256,086
Total liabilities and shareholders’ equity	$	382,979	$	348,796
(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,
	2011			2010
Operating activities:
Net income	$	11,969		$	7,912
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		5,222			5,107
Share-based compensation		1,512			1,618
Gain on disposal of property and equipment		(21	)		(8	)
Provision for loss on receivables		22			134
Provision for revenue adjustments		449			414
Deferred income taxes		1,919			(791	)
Tax benefit for stock options exercised		(131	)		(5	)
Changes in operating assets and liabilities
Accounts receivable		(1,863	)		(5,664	)
Prepaid expenses and other current assets		(864	)		(2,400	)
Accounts payable and accrued expenses		(874	)		2,402
Net cash provided by operating activities		17,340			8,719
Investing activities:
Proceeds from disposal of property and equipment		388			22
Purchases of property and equipment		(8,112	)		(3,313	)
Other		(7	)		(69	)
Net cash used in investing activities		(7,731	)		(3,360	)
Financing activities:
Payments of debt and capital lease obligations		(157	)		(229	)
Proceeds from exercise of stock options		2,793			106
Payments of cash dividends		(2,066	)		(2,028	)
Common stock issued under employee stock purchase plan		128			91
Tax benefit for stock options exercised		131			5
Net cash provided by (used in) financing activities		829			(2,055	)
Net increase in cash		10,438			3,304
Cash at beginning of period		85,681			44,612
Cash at end of period	$	96,119		$	47,916

Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Six Months Ended
	June 30,			June 30,
	2011			2010
Operating activities:
Net income	$	19,838		$	11,331
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		10,304			10,055
Share-based compensation		2,955			3,381
Gain on disposal of property and equipment		--			(7	)
Provision for (recovery) loss on receivables		(28	)		224
Provision for revenue adjustments		933			837
Deferred income taxes		1,939			(1,664	)
Tax benefit for stock options exercised		(219	)		(9	)
Changes in operating assets and liabilities
Accounts receivable		(7,921	)		(8,882	)
Prepaid expenses and other current assets		(1,745	)		(614	)
Accounts payable and accrued expenses		6,503			4,259
Net cash provided by operating activities		32,559			18,911
Investing activities:
Proceeds from disposal of property and equipment		667			42
Purchases of property and equipment		(15,441	)		(8,739	)
Other		301			(30	)
Net cash used in investing activities		(14,473	)		(8,727	)
Financing activities:
Payments of debt and capital lease obligations		(328	)		(490	)
Proceeds from exercise of stock options		7,631			144
Payments of cash dividends		(4,121	)		(4,057	)
Common stock issued under employee stock purchase plan		128			91
Tax benefit for stock options exercised		219			9
Net cash provided by (used in) financing activities		3,529			(4,303	)
Net increase in cash		21,615			5,881
Cash at beginning of period		74,504			42,035
Cash at end of period	$	96,119		$	47,916

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
	Three months ended
	June 30,			Percent of		June 30,			Percent of					Percent
	2011			Revenue		2010			Revenue		Change			Change
Operating revenue
Forward Air	$	116.5		88.1	%	$	105.6		86.5	%	$	10.9		10.3	%
FASI		15.9		12.0			16.9		13.8			(1.0	)	(5.9	)
Intercompany Eliminations		(0.2	)	(0.1	)		(0.4	)	(0.3	)		0.2		(50.0	)
Total		132.2		100.0			122.1		100.0			10.1		8.3
Purchased transportation
Forward Air		50.8		43.6			47.3		44.8			3.5		7.4
FASI		3.6		22.7			3.8		22.5			(0.2	)	(5.3	)
Intercompany Eliminations		(0.2	)	100.0			(0.4	)	100.0			0.2		(50.0	)
Total		54.2		41.0			50.7		41.5			3.5		6.9
Salaries, wages and employee benefits
Forward Air		24.7		21.2			25.4		24.0			(0.7	)	(2.8	)
FASI		6.7		42.1			7.7		45.5			(1.0	)	(13.0	)
Total		31.4		23.7			33.1		27.1			(1.7	)	(5.1	)
Operating leases
Forward Air		5.0		4.3			4.4		4.2			0.6		13.6
FASI		1.7		10.7			1.9		11.2			(0.2	)	(10.5	)
Total		6.7		5.1			6.3		5.2			0.4		6.3
Depreciation and amortization
Forward Air		4.1		3.5			4.1		3.9			-		-
FASI		1.1		6.9			1.0		5.9			0.1		10.0
Total		5.2		3.9			5.1		4.2			0.1		2.0
Insurance and claims
Forward Air		1.5		1.3			1.6		1.5			(0.1	)	(6.3	)
FASI		0.4		2.5			0.5		3.0			(0.1	)	(20.0	)
Total		1.9		1.4			2.1		1.7			(0.2	)	(9.5	)
Fuel expense
Forward Air		1.2		1.0			0.9		0.9			0.3		33.3
FASI		1.4		8.8			1.1		6.5			0.3		27.3
Total		2.6		2.0			2.0		1.6			0.6		30.0
Other operating expenses
Forward Air		8.8		7.6			7.7		7.3			1.1		14.3
FASI		1.5		9.4			1.6		9.5			(0.1	)	(6.3	)
Total		10.3		7.8			9.3		7.6			1.0		10.8
Income (loss) from operations
Forward Air		20.4		17.5			14.2		13.4			6.2		43.7
FASI		(0.5	)	(3.1	)		(0.7	)	(4.1	)		0.2		(28.6	)
Total	$	19.9		15.1	%	$	13.5		11.1	%	$	6.4		47.4	%

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)
	Six months ended
	June 30,			Percent of		June 30,			Percent of					Percent
	2011			Revenue		2010			Revenue		Change			Change
Operating revenue
Forward Air	$	221.7		87.8	%	$	196.5		85.8	%	$	25.2		12.8	%
FASI		31.1		12.3			33.3		14.5			(2.2	)	(6.6	)
Intercompany Eliminations		(0.4	)	(0.1	)		(0.7	)	(0.3	)		0.3		(42.9	)
Total		252.4		100.0			229.1		100.0			23.3		10.2
Purchased transportation
Forward Air		97.7		44.1			88.3		44.9			9.4		10.6
FASI		7.2		23.1			7.5		22.5			(0.3	)	(4.0	)
Intercompany Eliminations		(0.4	)	100.0			(0.6	)	85.7			0.2		(33.3	)
Total		104.5		41.4			95.2		41.6			9.3		9.8
Salaries, wages and employee benefits
Forward Air		48.7		22.0			48.7		24.8			-		-
FASI		13.3		42.8			15.1		45.4			(1.8	)	(11.9	)
Total		62.0		24.6			63.8		27.8			(1.8	)	(2.8	)
Operating leases
Forward Air		9.8		4.4			8.8		4.5			1.0		11.4
FASI		3.6		11.6			4.1		12.3			(0.5	)	(12.2	)
Total		13.4		5.3			12.9		5.6			0.5		3.9
Depreciation and amortization
Forward Air		8.2		3.7			8.2		4.2			-		-
FASI		2.1		6.7			1.9		5.7			0.2		10.5
Total		10.3		4.1			10.1		4.4			0.2		2.0
Insurance and claims
Forward Air		3.1		1.4			3.5		1.8			(0.4	)	(11.4	)
FASI		0.9		2.9			0.9		2.7			-		-
Total		4.0		1.6			4.4		1.9			(0.4	)	(9.1	)
Fuel expense
Forward Air		2.3		1.0			1.8		0.9			0.5		27.8
FASI		2.6		8.4			2.3		6.9			0.3		13.0
Total		4.9		1.9			4.1		1.8			0.8		19.5
Other operating expenses
Forward Air		17.2		7.8			15.8		8.0			1.4		8.9
FASI		2.9		9.3			3.3		9.9			(0.4	)	(12.1	)
Intercompany Eliminations		-		-			(0.1	)	14.3			0.1		(100.0	)
Total		20.1		8.0			19.0		8.3			1.1		5.8
Income (loss) from operations
Forward Air		34.7		15.6			21.4		10.9			13.3		62.1
FASI		(1.5	)	(4.8	)		(1.8	)	(5.4	)		0.3		(16.7	)
Total	$	33.2		13.1	%	$	19.6		8.6	%	$	13.6		69.4	%

Forward Air Corporation
Forward Air Inc. Operating Statistics
		Three months ended
		June 30,			June 30,		Percent
		2011			2010		Change
Operating ratio		82.5	%		86.6	%	(4.7	)%
Business days		64.0			64.0		-
Business weeks		12.8			12.8		-
Airport-to-airport:
Tonnage
Total pounds ¹		438,208			423,965		3.4
Average weekly pounds ¹		34,235			33,122		3.4
Linehaul shipments
Total linehaul		596,592			575,466		3.7
Average weekly		46,609			44,958		3.7
Forward Air Complete shipments		89,710			78,496		14.3
As a percentage of linehaul shipments		15.0	%		13.6	%	10.3
Average linehaul shipment size		735			737		(0.3	)
Revenue per pound ²
Linehaul yield	$	16.74		$	16.26		2.5
Fuel surcharge impact		1.94			1.24		3.6
Forward Air Complete impact		2.22			1.80		2.2
Total airport-to-airport yield	$	20.90		$	19.30		8.3
Logistics:
Miles
Owner operator ¹		7,567			7,006		8.0
Third party ¹		3,113			3,377		(7.8	)
Total Miles		10,680			10,383		2.9
Revenue per mile	$	1.69		$	1.67		1.2
Cost per mile	$	1.25		$	1.26		(0.8	)%
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
		2011			2010		Change
Operating ratio		84.4	%		89.1	%	(5.3	)%
Business days		128.0			127.0		0.8
Business weeks		25.6			25.4		0.8
Airport-to-airport:
Tonnage
Total pounds ¹		838,766			802,590		4.5
Average weekly pounds ¹		32,764			31,598		3.7
Linehaul shipments
Total linehaul		1,169,048			1,121,809		4.2
Average weekly		45,666			44,166		3.4
Forward Air Complete shipments		172,716			147,602		17.0
As a percentage of linehaul shipments		14.8	%		13.2	%	12.1
Average linehaul shipment size		717			715		0.3
Revenue per pound ²
Linehaul yield	$	16.72		$	16.10		3.2
Fuel surcharge impact		1.81			1.17		3.4
Forward Air Complete impact		2.20			1.77		2.3
Total airport-to-airport yield	$	20.73		$	19.04		8.9
Logistics:
Miles
Owner operator ¹		14,547			12,943		12.4
Third party ¹		6,372			6,114		4.2
Total Miles		20,919			19,057		9.8
Revenue per mile	$	1.65		$	1.64		0.6
Cost per mile	$	1.25		$	1.25		-	%
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