Business Wire | Apr 29, 2021 04:17PM EDT

Forward Air Corporation Reports First Quarter 2021 Results

Apr. 29, 2021

GREENEVILLE, Tenn.--(BUSINESS WIRE)--Apr. 29, 2021--Forward Air Corporation (NASDAQ:FWRD) (the "Company," "we," "our," or "us") today reported financial results for the three months ended March 31, 2021 as presented in the tables below on a continuing operations basis (Pool Distribution is being reported as a discontinued operation).

Tom Schmitt, Chairman, President and CEO, commenting on first quarter results from continuing operations said, "Our growth strategies drove our record first quarter revenue, which came in above the high end of our guidance range. Business momentum continued during the quarter and accelerated in March, when our LTL business achieved an operating margin higher than in March of peak economy year 2018."

"Our net income per diluted share of $0.60 exceeded the high end of our guidance range. This guidance included approximately $0.07 of anticipated professional fees related to cybersecurity and shareholder engagement activities. However, during the first quarter these fees were approximately $0.20 (driven predominately by shareholder engagement activities that resulted in us entering into a cooperation agreement), all of which was recorded in Other Operations. We also experienced an estimated $0.06 impact in February from adverse weather (which had a $0.04 impact on our Expedited Freight segment and a $0.02 impact on our Intermodal segment). When adjusting for this approximate $0.26 total impact, we believe the underlying performance of our business during the first quarter greatly exceeded what we expected in our first quarter guidance."

Regarding the Company's second quarter 2021 continuing operations guidance, Mr. Schmitt said, "We expect our year-over-year revenue growth will be 35% to 40%, and our net income per diluted share to be between $0.96 to $1.00, compared to $0.33 in the second quarter of 2020 and, more meaningfully compared to $0.79 in the second quarter of 2018."

In closing, Mr. Schmitt said, "The first quarter was all about a determined focus of the entire team. In the midst of a tight market and winter storms, our teammates and independent contractors went above and beyond to keep our customer commitments. We feel very strongly about our momentum which we will further enhance over the next few months and years. As the country continues its vaccine rollout, we will continue to bring back business together with our customers who were directly impacted by the pandemic such as cruise lines, conferences and trade shows."

Continuing Operations Three Months Ended

(in thousands, except per share March 31, March 31, Change Percentdata) 2021^1 2020 Change

Operating revenue $ 362,202 $ 305,557 $ 56,645 18.5 %

Income from operations $ 22,724 $ 15,772 $ 6,952 44.1 %

Operating margin 6.3 % 5.2 % 110 bps

Net income $ 16,714 $ 11,415 $ 5,299 46.4 %

Net income per diluted share $ 0.60 $ 0.41 $ 0.19 46.3 %

Cash provided by operating $ 16,913 $ 30,828 $ (13,915 ) (45.1 )activities %



Non-GAAP Financial Measures: ^2

EBITDA $ 31,961 $ 25,106 $ 6,855 27.3 %

Free cash flow $ 14,883 $ 28,897 $ (14,014 ) (48.5 ) %

^1 Results for the three months ended March 31, 2021 includes a $7.0 millioncharge for professional fees related to cyber security and shareholderengagement activities.

^2 EBITDA and free cash flow are non-GAAP financial measures andreconciliations of these non-GAAP financial measures are provided in the belowfinancial tables.

On April 26, 2021, our Board of Directors declared a quarterly cash dividend of $0.21 per share of common stock. The dividend is payable to shareholders of record at the close of business on May 27, 2021 and is expected to be paid on June 14, 2021. This quarterly dividend is made pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.84 for the full year 2021, payable in quarterly increments of $0.21 per share of common stock. The actual declaration of future cash dividends, and the establishment of record and payment dates, is subject to final determination by the Board of Directors each quarter after its review of the Company's financial performance and position.

The Board approved a strategy to divest the Pool Distribution business ("Pool") on April 23, 2020, and the sale of Pool was completed on February 12, 2021. Accordingly, the results of operations and cash flows for Pool have been presented as a discontinued operation and have been excluded from continuing operations in this release for all periods presented. In addition, Pool assets and liabilities were reflected as "held for sale" on the Condensed Consolidated Balance Sheets in this press release for the prior period.

Review of Financial ResultsForward Air will hold a conference call to discuss first quarter 2021 results on Friday, April 30, 2021 at 9:00 a.m. EDT. The Company's conference call will be available online on the Investor Relations portion of the Company's website at www.forwardaircorp.com, or by dialing (844) 867-6169, Access Code: 6464581.

A replay of the conference call will be available on the Investor Relations portion of the Company's website at www.forwardaircorp.com, which we use as a primary mechanism to communicate with our investors. Investors are urged to monitor the Investors Relations portion of the Company's website to easily find or navigate to current and pertinent information about us.

About Forward Air CorporationForward Air is a leading asset-light freight and logistics company that provides services across the United States and Canada. We provide expedited less-than-truckload ("LTL") services, including local pick-up and delivery, shipment consolidation/deconsolidation, warehousing, and customs brokerage by utilizing a comprehensive national network of terminals; final mile services, including delivery of heavy-bulky freight; truckload brokerage services, including dedicated fleet services, high-security and temperature-controlled logistics services; intermodal first-and last-mile high-value drayage services both to and from seaports and railheads, dedicated contract and Container Freight Station warehouse and handling services; and pool distribution services, including high-frequency handling and distribution of time sensitive product to numerous destinations within a specific geographic region. For more information, visit our website at www.forwardaircorp.com.

Forward Air Corporation

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, in thousands, except per share data)



Three Months Ended

March 31, March 31, 2021 2020

Operating revenue:

Expedited Freight $ 304,186 $ 253,625

Intermodal 58,514 52,460

Eliminations and other operations (498 ) (528 )

Operating revenue 362,202 305,557

Operating expenses:

Purchased transportation 184,608 150,598

Salaries, wages and employee benefits 74,897 69,559

Operating leases 19,167 17,884

Depreciation and amortization 9,237 9,334

Insurance and claims 9,741 10,044

Fuel expense 3,702 4,013

Other operating expenses 38,126 28,353

Total operating expenses 339,478 289,785

Income (loss) from continuing operations:

Expedited Freight 24,530 15,179

Intermodal 4,509 3,713

Other Operations (6,315 ) (3,120 )

Income from continuing operations 22,724 15,772

Other expense:

Interest expense (1,165 ) (853 )

Total other expense (1,165 ) (853 )

Income before income taxes 21,559 14,919

Income tax expense 4,845 3,504

Net income from continuing operations 16,714 11,415

Loss from discontinued operation, net of tax (5,533 ) (3,040 )

Net income and comprehensive income $ 11,181 $ 8,375



Net income per share:

Basic net income (loss) per share

Continuing operations $ 0.61 $ 0.41

Discontinued operation (0.20 ) (0.11 )

Net income per share^1 $ 0.40 $ 0.30



Diluted net income (loss) per share

Continuing operations $ 0.60 $ 0.41

Discontinued operation (0.20 ) (0.11 )

Net income per share $ 0.40 $ 0.30

Dividends per share $ 0.21 $ 0.18

^1 Rounding may impact summation of amounts.

Expedited Freight Segment Information

(In thousands)

(Unaudited)

Three Months Ended

March 31,

Percent of

March 31,

Percent of

Percent

2021

Revenue

2020

Revenue

Change

Change

Operating revenue:

Network1

$

178,627

58.7

%

$

152,009

59.9

%

$

26,618

17.5

%

Truckload

52,380

17.2

47,529

18.7

4,851

10.2

Final Mile

62,256

20.5

47,802

18.8

14,454

30.2

Other

10,923

3.6

6,285

2.5

4,638

73.8

Total operating revenue

304,186

100.0

253,625

100.0

50,561

19.9

Operating expenses:

Purchased transportation

164,364

54.0

132,790

52.4

31,574

23.8

Salaries, wages and employee benefits

61,687

20.3

55,435

21.9

6,252

11.3

Operating leases

14,218

4.7

13,602

5.4

616

4.5

Depreciation and amortization

6,798

2.2

6,695

2.6

103

1.5

Insurance and claims

7,611

2.5

6,613

2.6

998

15.1

Fuel expense

1,993

0.7

2,144

0.8

(151

)

(7.0

)

Other operating expenses

22,985

7.6

21,167

8.3

1,818

8.6

Total operating expenses

279,656

91.9

238,446

94.0

41,210

17.3

Income from operations

$

24,530

8.1

%

$

15,179

6.0

%

$

9,351

61.6

%

1Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.

Expedited Freight Segment Information

(In thousands)

(Unaudited)



Three Months Ended

March 31, Percent March 31, Percent Percent of of

2021 Revenue 2020 Revenue Change Change

Operating revenue:

Network^1 $ 178,627 58.7 % $ 152,009 59.9 % $ 26,618 17.5 %

Truckload 52,380 17.2 47,529 18.7 4,851 10.2

Final Mile 62,256 20.5 47,802 18.8 14,454 30.2

Other 10,923 3.6 6,285 2.5 4,638 73.8

Totaloperating 304,186 100.0 253,625 100.0 50,561 19.9 revenue



Operating expenses:

Purchased 164,364 54.0 132,790 52.4 31,574 23.8 transportation

Salaries,wages and 61,687 20.3 55,435 21.9 6,252 11.3 employeebenefits

Operating 14,218 4.7 13,602 5.4 616 4.5 leases

Depreciationand 6,798 2.2 6,695 2.6 103 1.5 amortization

Insurance and 7,611 2.5 6,613 2.6 998 15.1 claims

Fuel expense 1,993 0.7 2,144 0.8 (151 ) (7.0 )

Otheroperating 22,985 7.6 21,167 8.3 1,818 8.6 expenses

Totaloperating 279,656 91.9 238,446 94.0 41,210 17.3 expenses

Income from $ 24,530 8.1 % $ 15,179 6.0 % $ 9,351 61.6 %operations



^1Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload andFinal Mile revenue.

Expedited Freight Operating Statistics

Three Months Ended

March 31,

March 31,

Percent

2021

2020

Change

Business days

63

64

(1.6

)%

Tonnage 1,2

Total pounds

651,339

569,956

14.3

Pounds per day

10,339

8,906

16.1

Shipments 1,2

Total shipments

1,026

885

15.9

Shipments per day

16.3

13.8

18.1

Weight per shipment

635

644

(1.4

)

Revenue per hundredweight 3

$

27.56

$

27.16

1.5

Revenue per hundredweight, ex fuel 3

$

23.86

$

23.09

3.3

Revenue per shipment 3

$

174

$

172

1.2

Revenue per shipment, ex fuel 3

$

151

$

145

4.1

Network revenue from door-to-door shipments as a percentage of network revenue 3,4

48.4

%

44.3

%

9.3

Network gross margin 5

51.9

%

53.4

%

(2.8

)%

1 In thousands

2 Excludes accessorial, Truckload and Final Mile products

3 Includes intercompany revenue between the Network and Truckload revenue streams

4 Door-to-door shipments include all shipments with a pickup and/or delivery

5 Network revenue less Network purchased transportation as a percentage of Network revenue

Expedited Freight Operating Statistics



Three Months Ended

March 31, March 31, Percent

2021 2020 Change



Business days 63 64 (1.6 )%



Tonnage ^1,2

Total pounds 651,339 569,956 14.3

Pounds per day 10,339 8,906 16.1



Shipments ^1,2

Total shipments 1,026 885 15.9

Shipments per day 16.3 13.8 18.1



Weight per shipment 635 644 (1.4 )



Revenue per hundredweight ^3 $ 27.56 $ 27.16 1.5

Revenue per hundredweight, ex fuel ^3 $ 23.86 $ 23.09 3.3



Revenue per shipment ^3 $ 174 $ 172 1.2

Revenue per shipment, ex fuel ^3 $ 151 $ 145 4.1



Network revenue from door-to-door shipments 48.4 % 44.3 % 9.3 as a percentage of network revenue ^3,4

Network gross margin ^5 51.9 % 53.4 % (2.8 )%



^1 In thousands

^2 Excludes accessorial, Truckload and Final Mile products

^3 Includes intercompany revenue between the Network and Truckload revenuestreams

^4 Door-to-door shipments include all shipments with a pickup and/or delivery

^5 Network revenue less Network purchased transportation as a percentage ofNetwork revenue

Intermodal Segment Information

(In thousands)

(Unaudited)

Three Months Ended

March 31,

Percent of

March 31,

Percent of

Percent

20211

Revenue

2020

Revenue

Change

Change

Operating revenue

$

58,514

100.0

%

$

52,460

100.0

%

$

6,054

11.5

%

Operating expenses:

Purchased transportation

20,603

35.2

18,166

34.6

2,437

13.4

Salaries, wages and employee benefits

14,063

24.0

12,930

24.6

1,133

8.8

Operating leases

4,837

8.3

4,428

8.4

409

9.2

Depreciation and amortization

2,436

4.2

2,621

5.0

(185

)

(7.1

)

Insurance and claims

2,402

4.1

1,973

3.8

429

21.7

Fuel expense

1,710

2.9

1,869

3.6

(159

)

(8.5

)

Other operating expenses

7,954

13.6

6,760

12.9

1,194

17.7

Total operating expenses

54,005

92.3

48,747

92.9

5,258

10.8

Income from operations

$

4,509

7.7

%

$

3,713

7.1

%

$

796

21.4

%

1 Includes revenues and operating expenses from the acquisition of Proficient Transport, which was acquired in February 2021.

Intermodal Segment Information

(In thousands)

(Unaudited)



Three Months Ended

March Percent March Percent Percent 31, of 31, of

2021^1 Revenue 2020 Revenue Change Change

Operating revenue $ 58,514 100.0 % $ 52,460 100.0 % $ 6,054 11.5 %



Operating expenses:

Purchased 20,603 35.2 18,166 34.6 2,437 13.4 transportation

Salaries, wagesand employee 14,063 24.0 12,930 24.6 1,133 8.8 benefits

Operating leases 4,837 8.3 4,428 8.4 409 9.2

Depreciation and 2,436 4.2 2,621 5.0 (185 ) (7.1 )amortization

Insurance and 2,402 4.1 1,973 3.8 429 21.7 claims

Fuel expense 1,710 2.9 1,869 3.6 (159 ) (8.5 )

Other operating 7,954 13.6 6,760 12.9 1,194 17.7 expenses

Total operating 54,005 92.3 48,747 92.9 5,258 10.8 expenses

Income from $ 4,509 7.7 % $ 3,713 7.1 % $ 796 21.4 %operations



^1 Includes revenues and operating expenses from the acquisition of ProficientTransport, which was acquired in February 2021.

Intermodal Operating Statistics

Three Months Ended

March 31,

March 31,

Percent

2021

2020

Change

Drayage shipments

89,909

82,474

9.0

%

Drayage revenue per shipment

$

553

$

551

0.4

%

Number of locations

27

24

12.5

%

Intermodal Operating Statistics



Three Months Ended

March 31, March 31, Percent

2021 2020 Change



Drayage shipments 89,909 82,474 9.0 %

Drayage revenue per shipment $ 553 $ 551 0.4 %

Number of locations 27 24 12.5 %

Forward Air Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

March 31,2021

December 31, 2020

Assets

Current assets:

Cash and cash equivalents

$

24,396

$

40,254

Accounts receivable, net

186,504

156,490

Other receivables

16,847

-

Other current assets

20,239

28,150

Current assets held for sale

-

21,002

Total current assets

247,986

245,896

Property and equipment

379,566

380,519

Less accumulated depreciation and amortization

192,622

190,652

Total property and equipment, net

186,944

189,867

Operating lease right-of-use assets

130,859

123,338

Goodwill

250,736

244,982

Other acquired intangibles, net of accumulated amortization

147,668

145,032

Other assets

51,708

45,181

Noncurrent assets held for sale

-

53,097

Total assets

$

1,015,901

$

1,047,393

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

40,676

$

38,371

Accrued expenses

74,625

51,264

Other current liabilities

6,817

10,580

Current portion of debt and finance lease obligations

1,908

1,801

Current portion of operating lease liabilities

45,107

43,680

Current liabilities held for sale

-

25,924

Total current liabilities

169,133

171,620

Debt and finance lease obligations, less current portion

117,156

117,408

Operating lease liabilities, less current portion

86,212

80,346

Other long-term liabilities

57,131

54,129

Deferred income taxes

41,538

41,986

Noncurrent liabilities held for sale

-

34,575

Shareholders' equity:

Common stock

273

273

Additional paid-in capital

247,678

242,916

Retained earnings

296,780

304,140

Total shareholders' equity

544,731

547,329

Total liabilities and shareholders' equity

$

1,015,901

$

1,047,393

Forward Air Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)



March 31, December 2021 31, 2020

Assets

Current assets:

Cash and cash equivalents $ 24,396 $ 40,254

Accounts receivable, net 186,504 156,490

Other receivables 16,847 -

Other current assets 20,239 28,150

Current assets held for sale - 21,002

Total current assets 247,986 245,896



Property and equipment 379,566 380,519

Less accumulated depreciation and amortization 192,622 190,652

Total property and equipment, net 186,944 189,867

Operating lease right-of-use assets 130,859 123,338

Goodwill 250,736 244,982

Other acquired intangibles, net of accumulated 147,668 145,032amortization

Other assets 51,708 45,181

Noncurrent assets held for sale - 53,097

Total assets $ 1,015,901 $ 1,047,393



Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable $ 40,676 $ 38,371

Accrued expenses 74,625 51,264

Other current liabilities 6,817 10,580

Current portion of debt and finance lease obligations 1,908 1,801

Current portion of operating lease liabilities 45,107 43,680

Current liabilities held for sale - 25,924

Total current liabilities 169,133 171,620



Debt and finance lease obligations, less current 117,156 117,408portion

Operating lease liabilities, less current portion 86,212 80,346

Other long-term liabilities 57,131 54,129

Deferred income taxes 41,538 41,986

Noncurrent liabilities held for sale - 34,575



Shareholders' equity:

Common stock 273 273

Additional paid-in capital 247,678 242,916

Retained earnings 296,780 304,140

Total shareholders' equity 544,731 547,329

Total liabilities and shareholders' equity $ 1,015,901 $ 1,047,393

Forward Air Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended

March 31,2021

March 31,2020

Operating activities:

Net income from continuing operations

$

16,714

$

11,415

Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations

Depreciation and amortization

9,237

9,334

Change in fair value of earn-out liability

(48

)

(594

)

Share-based compensation expense

2,597

3,078

Provision for revenue adjustments

1,777

1,042

Deferred income tax (benefit) expense

(505

)

1,225

Other

92

(265

)

Changes in operating assets and liabilities, net of effects from the purchase of an acquired business:

Accounts receivable

(28,023

)

3,040

Other receivables

(13,339

)

-

Other current and noncurrent assets

7,085

2,776

Accounts payable and accrued expenses

21,326

(223

)

Net cash provided by operating activities of continuing operations

16,913

30,828

Investing activities:

Proceeds from sale of property and equipment

665

720

Purchases of property and equipment

(2,695

)

(2,651

)

Purchases of a business, net of cash acquired

(15,000

)

(55,931

)

Net cash used in investing activities of continuing operations

(17,030

)

(57,862

)

Financing activities:

Repayments of finance lease obligations

(467

)

(336

)

Proceeds from revolving credit facility

-

65,000

Proceeds from issuance of common stock upon stock option exercises

2,147

-

Payments of dividends to stockholders

(5,797

)

(5,050

)

Repurchases of common stock

(9,998

)

(15,259

)

Payment of minimum tax withholdings on share-based awards

(2,744

)

(2,672

)

Contributions from (distributions to) subsidiary held for sale

1,118

(2,153

)

Net cash (used in) provided by financing activities from continuing operations

(15,741

)

39,530

Net (decrease) increase in cash of continuing operations

(15,858

)

12,496

Cash from discontinued operation:

Net cash used in operating activities of discontinued operation

(6,902

)

(1,662

)

Net cash provided by (used in) investing activities of discontinued operation

8,020

(491

)

Net cash (used in) provided by financing activities of discontinued operation

(1,118

)

2,153

Net (decrease) increase in cash and cash equivalents

(15,858

)

12,496

Cash and cash equivalents at beginning of period of continuing operations

40,254

64,749

Cash at beginning of period of discontinued operation

-

-

Net (decrease) increase in cash and cash equivalents

(15,858

)

12,496

Less: cash at end of period of discontinued operation

-

-

Cash and cash equivalents at end of period of continuing operations

$

24,396

$

77,245

Forward Air Corporation Reconciliation of Non-GAAP Financial Measures

In this press release, the Company uses non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with GAAP. The Company believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions as well as evaluating the Company's performance.

For the three months ended March 31, 2021 and 2020, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization ("EBITDA") and free cash flow. All non-GAAP financial measures are presented on a continuing operations basis.

The Company believes that EBITDA from continuing operations improves comparability from period to period by removing the impact of its capital structure (interest and financing expenses), asset base (depreciation and amortization) and tax impacts. The Company believes that free cash flow from continuing operations is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance stockholder value.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's financial results prepared in accordance with GAAP. Non-GAAP financial information does not represent a comprehensive basis of accounting. As required by the Securities and Exchange Act of 1933 and the rules and regulations promulgated thereunder, the Company has included, for the periods indicated, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure.

The following is a reconciliation of net income from continuing operations to EBITDA from continuing operations for the three months ended March 31, 2021 and 2020 (in thousands):

Forward Air Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended

March 31, March 31, 2021 2020

Operating activities:

Net income from continuing operations $ 16,714 $ 11,415

Adjustments to reconcile net income of continuingoperations to net cash provided by operating activities of continuing operations

Depreciation and amortization 9,237 9,334

Change in fair value of earn-out liability (48 ) (594 )

Share-based compensation expense 2,597 3,078

Provision for revenue adjustments 1,777 1,042

Deferred income tax (benefit) expense (505 ) 1,225

Other 92 (265 )

Changes in operating assets and liabilities, net of effects from the purchase of an acquired business:

Accounts receivable (28,023 ) 3,040

Other receivables (13,339 ) -

Other current and noncurrent assets 7,085 2,776

Accounts payable and accrued expenses 21,326 (223 )

Net cash provided by operating activities of 16,913 30,828 continuing operations



Investing activities:

Proceeds from sale of property and equipment 665 720

Purchases of property and equipment (2,695 ) (2,651 )

Purchases of a business, net of cash acquired (15,000 ) (55,931 )

Net cash used in investing activities of continuing (17,030 ) (57,862 )operations



Financing activities:

Repayments of finance lease obligations (467 ) (336 )

Proceeds from revolving credit facility - 65,000

Proceeds from issuance of common stock upon stock 2,147 - option exercises

Payments of dividends to stockholders (5,797 ) (5,050 )

Repurchases of common stock (9,998 ) (15,259 )

Payment of minimum tax withholdings on share-based (2,744 ) (2,672 )awards

Contributions from (distributions to) subsidiary held 1,118 (2,153 )for sale

Net cash (used in) provided by financing activities (15,741 ) 39,530 from continuing operations

Net (decrease) increase in cash of continuing (15,858 ) 12,496 operations



Cash from discontinued operation:

Net cash used in operating activities of discontinued (6,902 ) (1,662 )operation

Net cash provided by (used in) investing activities 8,020 (491 )of discontinued operation

Net cash (used in) provided by financing activities (1,118 ) 2,153 of discontinued operation

Net (decrease) increase in cash and cash equivalents (15,858 ) 12,496

Cash and cash equivalents at beginning of period of 40,254 64,749 continuing operations

Cash at beginning of period of discontinued operation - -

Net (decrease) increase in cash and cash equivalents (15,858 ) 12,496

Less: cash at end of period of discontinued operation - -

Cash and cash equivalents at end of period of $ 24,396 $ 77,245 continuing operations

Forward Air Corporation Reconciliation of Non-GAAP Financial Measures

In this press release, the Company uses non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with GAAP. The Company believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational. Management uses these non-GAAP financial measures in making financial, operating, compensation and planning decisions as well as evaluating the Company's performance.

For the three months ended March 31, 2021 and 2020, this press release contains the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization ("EBITDA") and free cash flow. All non-GAAP financial measures are presented on a continuing operations basis.

The Company believes that EBITDA from continuing operations improves comparability from period to period by removing the impact of its capital structure (interest and financing expenses), asset base (depreciation and amortization) and tax impacts. The Company believes that free cash flow from continuing operations is an important measure of its ability to repay maturing debt or fund other uses of capital that it believes will enhance stockholder value.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's financial results prepared in accordance with GAAP. Non-GAAP financial information does not represent a comprehensive basis of accounting. As required by the Securities and Exchange Act of 1933 and the rules and regulations promulgated thereunder, the Company has included, for the periods indicated, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure.

The following is a reconciliation of net income from continuing operations to EBITDA from continuing operations for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended

Continuing Operations March 31, March 31, 2021 2020

Net income $ 16,714 $ 11,415

Interest expense 1,165 853

Income tax expense 4,845 3,504

Depreciation and amortization 9,237 9,334

EBITDA $ 31,961 $ 25,106

The following is a reconciliation of net cash provided by operating activities of continuing operations to free cash flow from continuing operations for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended

Continuing Operations March 31, March 31, 2021 2020

Net cash provided by operating activities $ 16,913 $ 30,828

Proceeds from sale of property and equipment 665 720

Purchases of property and equipment (2,695 ) (2,651 )

Free cash flow $ 14,883 $ 28,897

The following information is provided to supplement this press release.

Three Months Ended

Actual - Continuing Operations March 31, 2021

Net income from continuing operations $ 16,714

Income allocated to participating securities (101 )

Numerator for diluted income per share - net income $ 16,613



Weighted-average shares outstanding - diluted 27,497

Diluted net income per share $ 0.60



Projected Full year 2021

Projected tax rate - continuing operations 24.4 %



Projected purchases of property and equipment, net of proceeds $ 43,000 from sale of property and equipment^1

^1 Includes $23,500 for the Columbus, Ohio hub expansion



Projected December 31, 2021

Projected weighted-average shares outstanding - diluted 26,900

Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Forward-looking statements included in this press release relate to expected second quarter 2021 revenue growth and net income per diluted share, expectations regarding increased momentum in our business, expectations regarding full year 2021 projected tax rate, fully diluted share count (before consideration of future share repurchase), and projected capital expenditures, and the future declaration of dividends.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these 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, the COVID-19 pandemic, our ability to manage our growth and ability to grow, in part, through acquisitions, while being able to successfully integrate such acquisitions, our ability to secure terminal facilities in desirable locations at reasonable rates, more limited liquidity than expected which limits our ability to make key investments, the creditworthiness of our customers and their ability to pay for services rendered, our inability to maintain our historical growth rate because of a decreased volume of freight or decreased average revenue per pound of freight moving through our network, the availability and compensation of qualified Leased Capacity Providers and freight handlers as well as contracted, third-party carriers needed to serve our customers' transportation needs, our inability to manage our information systems and inability of our information systems to handle an increased volume of freight moving through our network, the occurrence of cybersecurity risks and events, market acceptance of our service offerings, claims for property damage, personal injuries or workers' compensation, enforcement of and changes in governmental regulations, environmental, tax, insurance and accounting matters, the handling of hazardous materials, changes in fuel prices, loss of a major customer, increasing competition and pricing pressure, our dependence on our senior management team and the potential effects of changes in employee status, seasonal trends, the occurrence of certain weather events, restrictions in our charter and bylaws and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2020.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

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CONTACT: Forward Air Corporation Brandon Hammer, 423-636-7173 bhammer@forwardair.com