Forward Air Corporation Reports First Quarter 2009 Results

GREENEVILLE, Tenn.--(Business Wire)--
Forward Air Corporation (NASDAQ:FWRD) today reported results for the first
quarter ended March 31, 2009.

Operating revenue for the quarter ended March 31, 2009 decreased 10.5% to $96.6
million from $107.9 million for the same quarter in 2008. Results from
operations for the quarter, which includes a non-cash, pre-tax charge of $7.2
million primarily for goodwill impairment related to the Company`s Forward Air
Solutions segment, was a loss of $5.0 million, compared with income from
operations of $16.7 million in the prior-year quarter. Including the impact of
the goodwill impairment, the Company`s net loss for the quarter ended March 31,
2009, was $3.1 million, compared with net income of $10.0 million in the
prior-year quarter. Net loss per share for the first quarter of 2009 was $0.11
compared with net income per diluted share of $0.35 in the prior-year quarter.

Income from operations, adjusted to exclude the $7.2 million non-cash, pre-tax
impairment charge, decreased to $2.1 million for the first quarter of 2009 from
$16.7 million for the first quarter of 2008. Adjusted net income declined to
$1.2 million during the first quarter of 2009 from $10.0 million in the
prior-year quarter. Similarly, adjusted earnings per diluted share for the first
quarter of 2009 declined to $0.04 compared with $0.35 for the first quarter of
2008.

A tabular reconciliation detailing the adjustments made to arrive at the
adjusted financial results set forth above from financial results determined in
accordance with United States generally accepted accounting principles is
contained in the financial summary statements attached to this press release.

Bruce A. Campbell, Chairman, President, and CEO, said "As previously discussed
in our April 9, 2009 first quarter update, our revenue and profitability
continue to be negatively impacted by the severe effects of the current economic
recession. The unprecedented tonnage decline along with increased downward
pressure on our yield driven by lower fuel surcharges as well as a highly
competitive pricing environment has created extreme pressure on our
airport-to-airport model. We will continue to be vigilant in our cost control
efforts. However, we will not make cuts for the benefit of our short term
results that could negatively impair our performance when the economy improves."

Commenting further, Mr. Campbell said, "As we anticipated, our Forward Air
Solutions pool distribution business segment was required to record an
impairment charge in the quarter. It is important to note that this impairment
charge was driven primarily by the current economic environment and related
market valuations. While first quarter results for this segment were
disappointing, with recent new business awards and successful ongoing cost
control measures we anticipate Forward Air Solutions to be a positive bottom
line contributor in the near term."

In closing Mr. Campbell said, "During this challenging time, we would like to
recognize the entire Forward Air team of employees and independent contractors.
It is their hard work and sacrifice that will guide us through these difficult
times allowing us to emerge a stronger company as the recession ultimately comes
to an end."

Commenting on the quarter Rodney L. Bell, Senior Vice President and CFO said,
"While our first quarter performance was disappointing, it is encouraging to
note that we were, without regard to the non-cash impairment charge, able to
remain profitable with positive cash flows each month of the quarter. We ended
the quarter with over $31.2 million of cash, a $9.1 million increase from year
end. At March 31, 2009, we owed $50.0 million on our line of credit with $40.3
million of availability."

Commenting further Mr. Bell said, "Assuming no further material deterioration in
the environment during the second quarter, we anticipate a year-over-year,
quarterly decline in revenue in the range of 11.0 to 16.0% and expect income per
diluted share to be between $0.06 and $0.12 per share."

Review of Financial Results

Forward Air will hold a conference call to discuss first quarter 2009 results on
Tuesday, April 21, 2009 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. A replay of
the conference call will be available at www.forwardair.com beginning shortly
after 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 82
terminals located on or near major airports 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 20 terminals 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
March 31, March 31,
2009 2008
Operating revenue:
Forward Air
Airport-to-airport $ 63,055 $ 82,059
Logistics 13,044 12,253
Other 5,867 5,789
Forward Air Solutions
Pool distribution 14,650 7,837
Total operating revenue 96,616 107,938

Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport 26,153 31,540
Logistics 10,279 9,180
Other 1,064 1,633
Forward Air Solutions
Pool distribution 2,632 1,172
Total purchased transportation 40,128 43,525
Salaries, wages and employee benefits 29,056 26,447
Operating leases 6,989 4,851
Depreciation and amortization 4,858 3,698
Insurance and claims 2,716 2,260
Fuel expense 1,682 2,124
Other operating expenses 9,056 8,383
Impairment of goodwill and other intangible assets 7,157 --
Total operating expenses 101,642 91,288
(Loss) income from operations (5,026 ) 16,650

Other (expense) income:
Interest expense (141 ) (301 )
Other, net (22 ) 154
Total other expense (163 ) (147 )
(Loss) income before income taxes (5,189 ) 16,503
Income taxes (2,085 ) 6,495
Net (loss) income $ (3,104 ) $ 10,008

Net (loss) income per share:
Basic $ (0.11 ) $ 0.35
Diluted $ (0.11 ) $ 0.35
Weighted average shares outstanding:
Basic 28,906 28,694
Diluted 28,906 28,982

Dividends per share: $ 0.07 $ 0.07

Forward Air Corporation
Reconciliation of U.S. GAAP Financial Results to Adjusted Financial Results
(In thousands, except per share data)
(Unaudited)

Three months ended
Adjusted
March 31, Impairment March 31,
2009 (1) Charge 2009
(Loss) income from operations $ (5,026 ) $ 7,157 $ 2,131

Income taxes (2,085 ) (2,875 ) 790

Net (loss) income (3,104 ) 4,282 1,178

Weighted average diluted shares outstanding 28,906 28,906 28,963

Net (loss) income per share: $ (0.11 ) (0.15 ) $ 0.04

(1) - As reported in accordance with United States generally accepted accounting principles.

Forward Air Corporation
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)

March 31, December 31,
2009 2008 (a)
Assets
Current assets:
Cash $ 31,241 $ 22,093
Accounts receivable, net 48,441 57,206
Other current assets 12,627 12,290
Total current assets 92,309 91,589

Property and equipment 190,384 186,377
Less accumulated depreciation and amortization 66,453 63,401
Total property and equipment, net 123,931 122,976
Goodwill and other acquired intangibles:
Goodwill 43,332 50,230
Other acquired intangibles, 39,292 40,708
net
Total goodwill and other acquired intangibles 82,624 90,938
Other assets 2,124 2,024
Total assets $ 300,988 $ 307,527

Liabilities and Shareholders` Equity
Current liabilities:
Accounts payable $ 7,841 $ 11,633
Accrued expenses 16,124 12,927
Current portion of debt and 1,433 1,602
capital lease obligations
Total current liabilities 25,398 26,162

Long-term debt and capital lease obligations, less current 52,868 53,035
portion
Other long-term liabilities 2,918 3,055
Deferred income taxes 6,947 8,841

Shareholders` equity:
Common stock 289 289
Additional paid-in capital 11,802 10,249
Retained earnings 200,766 205,896
Total shareholders` equity 212,857 216,434
Total liabilities and shareholders` equity $ 300,988 $ 307,527

(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
March 31, March 31,
2009 2008
Operating activities:
Net (loss) income $ (3,104 ) $ 10,008
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation and amortization 4,858 3,698
Impairment of goodwill and other intangible assets 7,157 -
Share-based compensation 1,780 1,535
Loss on sale or disposal of property and equipment 9 16
Provision for (recovery) loss on receivables (35 ) 95
Provision for revenue adjustments 794 996
Deferred income taxes (1,960 ) 514
Tax benefit for stock options exercised -- (725 )
Changes in operating assets and liabilities,
Accounts receivable 8,006 (5,437 )
Prepaid expenses and other 705 459
current assets
Accounts payable and accrued (1,751 ) (317 )
expenses
Net cash provided by operating activities 16,459 10,842

Investing activities:
Proceeds from disposal of property and equipment 127 4
Purchases of property and equipment (4,737 ) (2,645 )
Acquisition of businesses -- (18,526 )
Other (112 ) (49 )
Net cash used in investing activities (4,722 ) (21,216 )

Financing activities:
Payments of debt and capital lease obligations (336 ) (606 )
Borrowings on line of credit -- 20,000
Payments on line of credit -- (10,000 )
Proceeds from exercise of stock options -- 956
Payments of cash dividends (2,025 ) (2,013 )
Cash settlement of share-based awards for minimum tax withholdings (228 ) (362 )
Tax benefit for stock options exercised -- 725
Net cash (used in) provided by financing activities (2,589 ) 8,700
Net increase (decrease) in cash 9,148 (1,674 )
Cash at beginning of period 22,093 4,909
Cash at end of period $ 31,241 $ 3,235

Forward Air Corporation
Segment Information
(In millions)
(Unaudited)

Three months ended
March 31, Percent of March 31, Percent of Percent
2009 Revenue 2008 Revenue Change Change
Operating revenue
Forward Air $ 82.1 85.0 % $ 100.3 93.0 % $ (18.2 ) (18.1 ) %
FASI 14.8 15.3 7.8 7.2 7.0 89.7
Intercompany Eliminations (0.3 ) (0.3 ) (0.2 ) (0.2 ) (0.1 ) 50.0
Total 96.6 100.0 107.9 100.0 (11.3 ) (10.5 )

Purchased transportation
Forward Air 37.6 45.8 42.3 42.2 (4.7 ) (11.1 )
FASI 2.8 19.0 1.4 17.9 1.4 100.0
Intercompany Eliminations (0.3 ) 100.0 (0.2 ) 100.0 (0.1 ) 50.0
Total 40.1 41.5 43.5 40.3 (3.4 ) (7.8 )

Salaries, wages and employee benefits
Forward Air 21.5 26.2 22.6 22.5 (1.1 ) (4.9 )
FASI 7.6 51.3 3.8 48.7 3.8 100.0
Total 29.1 30.1 26.4 24.5 2.7 10.2

Operating leases
Forward Air 4.8 5.8 4.3 4.3 0.5 11.6
FASI 2.2 14.8 0.5 6.4 1.7 340.0
Total 7.0 7.2 4.8 4.5 2.2 45.8

Depreciation and amortization
Forward Air 3.9 4.8 3.4 3.4 0.5 14.7
FASI 0.9 6.1 0.3 3.8 0.6 200.0
Total 4.8 5.0 3.7 3.4 1.1 29.7

Insurance and claims
Forward Air 2.2 2.7 1.8 1.8 0.4 22.2
FASI 0.5 3.4 0.5 6.4 -- --
Total 2.7 2.8 2.3 2.1 0.4 17.4

Fuel expense
Forward Air 0.7 0.9 1.3 1.3 (0.6 ) (46.2 )
FASI 1.0 6.8 0.8 10.3 0.2 25.0
Total 1.7 1.8 2.1 1.9 (0.4 ) (19.0 )

Other operating expenses
Forward Air 7.4 9.0 7.4 7.4 -- --
FASI 1.6 10.8 1.0 12.8 0.6 60.0
Total 9.0 9.3 8.4 7.8 0.6 7.1

Impairment of goodwill and other intangible assets
Forward Air 0.2 0.2 -- -- 0.2 100.0
FASI 7.0 47.3 -- -- 7.0 100.0
Total 7.2 7.5 -- -- 7.2 100.0

(Loss) income from operations
Forward Air 3.8 4.6 17.2 17.1 (13.4 ) (77.9 )
FASI (8.8 ) (59.5 ) (0.5 ) (6.3 ) (8.3 ) 1,660.0
Total $ (5.0 ) (5.2 ) % $ 16.7 15.5 % $ (21.7 ) (129.9 ) %

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 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.

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

Copyright Business Wire 2009