Forward Air Corporation Reports Record Fourth Quarter and Fiscal 2004 Results, Announces a Three-for-Two Stock Split and Initiates a Quarterly Cash Dividend
GREENEVILLE, Tenn.--Feb. 1, 20055, 2005--| 19.0% Revenue Growth in Fourth Quarter 2004; 20.2% Operating Margin in Fourth Quarter 2004 |
Forward Air Corporation today reported record results for the fourth quarter and fiscal year ended December 31, 2004.
Operating revenue for the quarter ended December 31, 2004 increased 19.0% to a record $77.6 million from $65.2 million for the same quarter in 2003. Income from operations was $15.7 million, compared with $11.6 million in the prior-year quarter, an increase of 35.3%. As a percent of operating revenue, income from operations expanded to 20.2% during the quarter from 17.8% in 2003. Net income during the period increased 31.2% to $10.1 million from $7.7 million in the prior-year quarter. Diluted income per share from operations for the fourth quarter of 2004 was $0.46 compared with $0.35 in the prior-year quarter, an increase of 31.4%.
Operating revenue for the year ended December 31, 2004 increased 16.9% to $282.2 million from $241.5 million in 2003. Income from operations for 2004 was $53.6 million compared with $40.2 million in the prior year, an increase of 33.3%. As a percent of operating revenue, income from operations increased to a record 19.0% from 16.6% in 2003. Net income for 2004 increased 33.3% to $34.4 million compared with $25.8 million in the prior year. Diluted income per share for 2004 was $1.57 compared with $1.19 in 2003, an increase of 31.9%.
Commenting on the Company's fourth quarter and year-end results, Bruce A. Campbell, President and CEO, said "Congratulations to all the Forward Air employees for their efforts in producing record results for the fourth quarter of 2004. Our revenue growth of 19.0% and operating income margin of 20.2% during the fourth quarter are simply outstanding. We are also pleased with our full year 2004 results, as we were able to grow revenue, tonnage, yield and profits while increasing cash on the balance sheet by over $24.0 million. As we enter 2005, our people are motivated and focused on delivering industry-leading results and serving the needs of our customers."
Three-for-Two Stock Split
The Company announced that its board of directors authorized a three-for-two stock split of its common stock for shareholders of record on March 18, 2005. Shares resulting from the split are expected to be distributed to common stock shareholders on or about April 1, 2005. Cash will be issued in lieu of any fractional shares.
Cash Dividend Declared
Forward Air's board of directors also initiated a cash dividend policy and declared a quarterly cash dividend of $0.06 per share of common stock on a post split-adjusted basis. The board of directors approved a dividend policy that anticipates an annual dividend of $0.24 per share of common stock, payable in four quarterly increments of $0.06 per share of common stock. Any declaration and payment of future cash dividends is subject to final determination by the board of directors each quarter.
The first cash dividend is payable to common stock shareholders of record on April 4, 2005 and is expected to be paid on April 18, 2005.
Bruce A. Campbell, commenting on the stock split and new dividend policy, stated "Over the past three years, Forward Air has grown its revenue and profitability by focusing on the needs of the deferred air freight industry. At the same time, we have been able to increase our cash and investment positions by nearly $70 million after taking into account the nearly $25 million of the Company's common stock repurchased since 2002. We are pleased that the board of directors has initiated these policies as a way of returning value to our shareholders."
Review of Financial Results
Forward Air Corporation will hold a quarterly conference call to discuss fourth quarter and fiscal 2004 results on Wednesday, February 16, 2005, at 9:00 a.m. EST. The Company's conference call will be available online at www.forwardair.com or by dialing 800-589-4298. 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 80 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 airfreight or when air transportation is not economical.
FORWARD AIR CORPORATION
Condensed Statements of Income (Unaudited)
(In thousands, except per share data)
Three months ended Year ended
--------------------- -----------------------
12/31/04 12/31/03 12/31/04 12/31/03
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Operating revenue $77,578 $65,184 $282,197 $241,517
Operating expenses:
Purchased
transportation 32,938 27,889 118,425 102,063
Salaries, wages and
employee benefits 17,336 14,382 62,728 54,267
Operating leases 3,059 3,477 12,791 13,102
Depreciation and
amortization 1,729 1,823 6,817 7,263
Insurance and claims 836 1,014 5,382 5,153
Other operating
expenses 6,028 5,023 22,456 19,487
-------------------- ---------------------
Total operating expenses 61,926 53,608 228,599 201,335
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Income from operations 15,652 11,576 53,598 40,182
Other income, net 411 153 1,072 529
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Pre-tax income 16,063 11,729 54,670 40,711
Income taxes 5,969 4,027 20,249 14,896
-------------------- ---------------------
Net income $10,094 $ 7,702 $ 34,421 $ 25,815
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Income per share:
Basic $ 0.47 $ 0.36 $ 1.60 $ 1.21
Diluted $ 0.46 $ 0.35 $ 1.57 $ 1.19
Weighted average shares
outstanding:
Basic 21,598 21,475 21,540 21,327
Diluted 22,059 21,821 21,960 21,707
FORWARD AIR CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
12/31/04 12/31/03
----------- -----------
(Unaudited) Audited (a)
Assets:
Cash and short-term investments $111,678 $ 86,539
Other current assets 47,744 36,627
Property and equipment, net 37,286 32,912
Other assets 17,845 19,009
--------- ---------
Total assets $214,553 $175,087
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Liabilities and Shareholders' Equity:
Current liabilities 25,657 20,290
Long-term obligations 7,893 7,089
Shareholders' equity 181,003 147,708
--------- ---------
Total liabilities and shareholders' equity $214,553 $175,087
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(a) Taken from audited financial statements, which are not presented
in their entirety.
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.