Exhibit 99.1
Forward Air Corporation Reports Record Second Quarter 2006 Results;
12.0% Revenue Growth; 22.8% Operating Margin; 10.8% EPS Growth
GREENEVILLE, Tenn.--(BUSINESS WIRE)--July 24, 2006--Forward Air
Corporation (NASDAQ:FWRD) today reported record results for the second
quarter ended June 30, 2006. This is the fourteenth consecutive
quarter of record growth for the Company.
Operating revenue for the quarter ended June 30, 2006 increased
12.0% to a record $86.8 million from $77.5 million for the same
quarter in 2005. Income from operations was $19.8 million, compared
with $16.8 million in the prior-year quarter, an increase of 17.7%. As
a percent of operating revenue, income from operations improved to
22.8% from 21.7% for the same quarter last year. Net income during the
period increased by $1.1 million, or 8.9%, to $13.0 million from $12.0
million in the prior-year quarter. Diluted income per share from
operations for the second quarter of 2006 was $0.41 compared with
$0.37 in the prior-year quarter, an increase of 10.8%. The second
quarter of 2005 included a one-time gain of $0.9 million after-tax
income, or $0.03 per diluted share, from the Company's settlement of
its lawsuit with the City of Atlanta.
Operating revenue for the six months ended June 30, 2006 increased
15.0% to $169.1 million from $147.0 million for the same period in
2005. Income from operations was $36.7 million, compared with $30.2
million in the prior-year period, an increase of 21.7%. As a percent
of operating revenue, income from operations expanded to 21.7% for the
first six months of 2006 from 20.5% in 2005. Net income during the
period increased 16.4% to $24.0 million from $20.6 million in the
prior-year period. Diluted income per share from operations for the
first six months of 2006 was $0.75 compared with $0.63 in the
prior-year period, an increase of 19.0%.
Commenting on the Company's second quarter results, Bruce A.
Campbell, President and CEO, said, "The results delivered during the
second quarter by our team were truly outstanding, highlighted by an
industry leading operating margin of 22.8%, and it was especially
pleasing to see the 33.7% revenue growth in our logistics segment,
which has been a point of emphasis for our company. As anticipated
with the one-year anniversary of the XGS acquisition, our system
revenue growth slowed but we feel we have positioned this segment for
future growth with the implementation of our Forward Air Complete(TM)
service offering and, as previously announced, the partnership with
DHL Global Forwarding to be their primary ground transportation
provider effective July 1, 2006."
Commenting further, Rodney L. Bell, Senior Vice President and CFO,
said, "The second quarter was another outstanding cash flow quarter
for the Company. We generated $13 million of cash flow from operations
bringing our year-to-date total to $22 million. Cash and short term
investments increased by $11 million during the quarter to a total of
$93 million at quarter-end."
Review of Financial Results
Forward Air will hold a conference call to discuss second quarter
2006 results on Tuesday, July 25, 2006, at 9:00 a.m. EDT. The
Company's conference call will be available online at
www.forwardair.com or by dialing 800-659-1966. 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
Forward Air is a high-service-level contractor to the air cargo
industry providing time-definite ground transportation services
through a network of 81 terminals located on or near major airports in
the United States and Canada. The Company 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 CORPORATION
Condensed Statements of Income (Unaudited)
(In thousands, except per share data)
Three months ended Six Months Ended
-------------------- ---------------------
6/30/06 6/30/05 (a) 6/30/06 6/30/05 (a)
-------- ----------- --------- -----------
Operating revenue $86,779 $77,488 $169,109 $147,021
Operating expenses:
Purchased transportation 35,134 31,003 67,570 59,482
Salaries, wages and
employee benefits 18,330 16,367 37,123 31,819
Operating leases 3,422 3,376 6,868 6,712
Depreciation and
amortization 2,052 1,969 4,451 3,822
Insurance and claims 1,710 1,839 3,191 3,021
Other operating expenses 6,364 6,143 13,183 11,993
------- -------- -------- ---------
Total operating expenses 67,012 60,697 132,386 116,849
------- -------- -------- --------
Income from operations 19,767 16,791 36,723 30,172
Other income, net 871 2,191 1,480 2,708
------- -------- -------- ------
Pre-tax income 20,638 18,982 38,203 32,880
Income taxes 7,617 7,028 14,174 12,233
------- -------- -------- -----------
Net income $13,021 $11,954 $ 24,029 $ 20,647
======= ======= ======== ========
Income per share:
Basic $ 0.41 $ 0.37 $ 0.77 $ 0.64
Diluted $ 0.41 $ 0.37 $ 0.75 $ 0.63
Weighted average shares
outstanding:
Basic 31,431 32,277 31,354 32,282
Diluted 31,928 32,621 31,852 32,674
FORWARD AIR CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
6/30/06 12/31/05
----------- ---------
(Unaudited) Audited (a)
Assets:
Cash and short-term investments $ 93,317 $ 79,332
Other current assets 56,694 57,402
Property and equipment, net 47,497 47,222
Other assets 28,019 28,644
-------- --------
Total assets $225,527 $212,600
======== ========
Liabilities and Shareholders' Equity:
Current liabilities $ 17,601 $ 25,964
Long-term obligations 8,959 7,820
Shareholders' equity 198,967 178,816
-------- --------
Total liabilities and shareholders' equity $225,527 $212,600
======== ========
(a) Taken from audited financial statements, which are not
presented in their entirety.
FORWARD AIR CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Six months ended
--------------------------
June 30, June 30,
2006 2005
------------- ------------
Operating activities:
Net income $ 24,029 $ 20,647
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 4,451 3,822
Share-based compensation 580 --
Atlanta condemnation settlement gain -- (1,428)
Other non-cash charges -- 274
(Gain) loss on sale of property and
equipment (165) 31
Provision for loss (recovery) on
receivables 39 (190)
Provision for revenue adjustments 1,083 964
Deferred income taxes 1,569 (384)
Changes in operating assets and liabilities:
Accounts receivable (3,508) (2,657)
Inventories (28) (216)
Prepaid expenses and other current assets (717) (917)
Accounts payable and accrued expenses (6,861) (3,352)
Income taxes 2,920 2,634
Tax benefit of stock options exercised (1,423) 588
---------- ---------
Net cash provided by operating activities 21,969 19,816
Investing activities:
Proceeds from disposal of property and
equipment 3,200 51
Purchases of property and equipment (5,190) (2,114)
Proceeds from sales or maturities of
available-for-sale securities 114,404 171,869
Purchases of available-for-sale securities (115,699) (146,040)
Acquisition of business -- (12,750)
Proceeds from Atlanta condemnation
settlement/release of amounts held in
escrow -- 2,765
Other (13) (17)
---------- ----------
Net cash (used in) provided by investing
activities (3,298) 13,764
Financing activities:
Payments of capital lease obligations (19) (14)
Payments on line of credit (1,504) --
Proceeds from exercise of stock options 4,183 1,219
Payments of cash dividends (4,407) (3,878)
Cash paid for fractional shares in 3-for-2
stock split -- (44)
Common stock issued under employee stock
purchase plan 115 130
Repurchase of common stock (5,772) (22,893)
Tax benefit of stock options exercised 1,423 --
---------- ---------
Net cash used in financing activities (5,981) (25,480)
---------- ---------
Net increase in cash 12,690 8,100
Cash at beginning of period 332 78
---------- ---------
Cash at end of period $ 13,022 $ 8,178
---------- ---------
Common stock repurchase liabilities included
in accounts payable $ -- $ 3,545
========== =========
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, Greeneville
Rodney L. Bell, 423-636-7000
rbell@forwardair.com