Tennessee
|
62-1120025
|
|||
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|||
430 Airport Road
|
||||
Greeneville, Tennessee
|
37745
|
|||
(Address of principal executive offices)
|
(Zip Code)
|
Common Stock, $0.01 par value
|
The NASDAQ Stock Market LLC
|
|||
(Title of class)
|
(Name of exchange on which registered)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting Company
o
|
Table of Contents
|
||
Forward Air Corporation
|
||
Page
|
||
Number
|
||
Part I.
|
||
Item 1.
|
3
|
|
Item 1A.
|
13
|
|
Item 1B.
|
17
|
|
Item 2.
|
17
|
|
Item 3.
|
18
|
|
Item 4.
|
18
|
|
Part II.
|
||
Item 5.
|
19
|
|
Item 6.
|
21
|
|
Item 7.
|
21
|
|
Item 7A.
|
43
|
|
Item 8.
|
44
|
|
Item 9.
|
44
|
|
Item 9A.
|
44
|
|
Item 9B.
|
46
|
|
Part III.
|
||
Item 10.
|
46
|
|
Item 11.
|
46
|
|
Item 12.
|
46
|
|
Item 13.
|
46
|
|
Item 14.
|
46
|
|
Part IV.
|
||
Item 15.
|
46
|
|
47
|
||
F2
|
||
S1
|
||
Item 1.
|
·
|
Freight forwarders obtain requests for shipments from customers, make arrangements for transportation of the cargo by a third-party carrier and usually arrange for both delivery from the shipper to the carrier and from the carrier to the recipient.
|
·
|
Integrated air cargo carriers provide pick-up and delivery services primarily using their own fleet of trucks and provide transportation services generally using their own fleet of aircraft.
|
·
|
Less-than-truckload carriers also provide pick-up and delivery services through their own fleet of trucks. These carriers operate terminals where a single shipment is unloaded, sorted and reloaded multiple times. This additional handling increases transit time, handling costs and the likelihood of cargo damage or theft.
|
·
|
Full truckload carriers provide transportation services generally using their own fleet of trucks. A freight forwarder or shipper must have a shipment of sufficient size to justify the cost of a full truckload. These cost benefit concerns can inhibit the flexibility often required by freight forwarders or shippers.
|
·
|
Passenger or cargo airlines provide airport-to-airport service, but have limited cargo space and generally accept only shipments weighing less than 150 pounds.
|
·
|
Focus on Specific Freight Markets.
Our Forward Air segment focuses on providing time-definite surface transportation and related logistics services to the deferred air cargo industry. Our FASI segment focuses on providing high-quality pool distribution services to retailers and nationwide distributors of retail products. This focused approach enables us to provide a higher level of service in a more cost-effective manner than our competitors.
|
·
|
Expansive Network of Terminals and Sorting Facilities.
We have developed a network of Forward Air terminals and sorting facilities throughout the United States and Canada located on or near airports. We believe it would be difficult for a competitor to duplicate our Forward Air network without the expertise and strategic facility locations we have acquired without expending significant capital and management resources. Our expansive Forward Air network enables us to provide regularly scheduled service between most markets with low levels of freight damage or loss, all at rates which in general are significantly below air freight rates.
|
·
|
Concentrated Marketing Strategy.
Forward Air provides our deferred air freight services mainly to air freight forwarders, integrated air cargo carriers, and passenger and cargo airlines rather than directly serving shippers. Forward Air does not place significant size or weight restrictions on shipments and, therefore, it does not compete with delivery services such as United Parcel Service and Federal Express in the overnight small parcel market. We believe that Forward Air customers prefer to purchase their transportation services from us because, among other reasons, we generally do not market Forward Air’s services to their shipper customers and, therefore, do not compete directly with them for customers.
|
·
|
Superior Service Offerings.
Forward Air’s published deferred air freight schedule for transit times with specific cut-off and arrival times generally provides Forward Air customers with the predictability they need. In addition, our network of Forward Air terminals allows us to offer our customers later cut-off times, a higher percentage of direct shipments (which reduces damage and shortens transit times) and earlier delivery times than most of our competitors.
|
·
|
Flexible Business Model.
Rather than owning and operating our own fleet of trucks, Forward Air purchases most of its transportation requirements from owner-operators or truckload carriers. This allows Forward Air to respond quickly to changing demands and opportunities in our industry and to generate higher returns on assets because of the lower capital requirements.
|
·
|
Comprehensive Logistic and Other Service Offerings.
Forward Air offers an array of logistic and other services including: TLX, pick-up and delivery (Forward Air Complete™), dedicated fleet, warehousing, customs brokerage and shipment consolidation and handling. These services are an essential part of many of our Forward Air customers’ transportation needs and are not offered by many of our competitors. Forward Air is able to provide these services utilizing existing infrastructure and thereby earning additional revenue without incurring significant additional fixed costs.
|
·
|
Leading Technology Platform.
We are committed to using information technology to improve our Forward Air and FASI operations. Through improved information technology, we believe we can increase the volume of freight we handle in our networks, improve visibility of shipment information and reduce our operating costs. Our Forward Air technology allows us to provide our customers with electronic bookings and real-time tracking and tracing of shipments while in our network, complete shipment history, proof of delivery, estimated charges and electronic bill presentment. We continue to enhance our Forward Air systems to permit us and our customers to access vital information through both the Internet and electronic data interchange. We have continued to invest in information technology to the benefit of our customers and our business processes.
|
·
|
Strong Balance Sheet and Availability of Funding.
Our asset-light business model and strong market position in the deferred air freight market provides the foundation for operations that produce excellent cash flow from operations even in challenging conditions. Our strong balance sheet can also be a competitive advantage. Our competitors, particularly in the pool distribution market, are mainly regional and local operations and may struggle to maintain operations in the current economic environment. The threat of financial instability may encourage new and existing customers to use a more financially secure transportation provider, such as FASI.
|
·
|
Increase Freight Volume from Existing Customers.
Many of our customers currently use Forward Air and FASI for only a portion of their overall transportation needs. We believe we can increase freight volumes from existing customers by offering more comprehensive services that address all of the customer’s transportation needs, such as Forward Air Complete, our direct to door pick-up and delivery service. By offering additional services that can be integrated with our existing business, we believe we will attract additional business from existing customers.
|
·
|
Develop New Customers.
We continue to actively market our Forward Air and FASI services to potential new customers. In our Forward Air segment, we believe air freight forwarders will continue to move away from integrated air cargo carriers because those carriers charge higher rates, and away from less-than-truckload carriers because those carriers provide less reliable service and compete for the same customers as do the air freight forwarders. In addition, we believe Forward Air’s comprehensive North American network and related logistics services are attractive to domestic and international airlines. Forward Air Complete™ can also help attract business from new customers who require pick-up and delivery for their shipments. In our pool distribution business, we are emphasizing the development of relationships with customers who have peak volume seasons outside of the traditional fourth quarter spike in order to stabilize FASI’s earnings throughout the calendar year. We are currently targeting customers from industries such as hospitality, healthcare and publishing. Further, by expanding our network of FASI terminals, we believe we can attract new customers and new business from existing customers by offering our services across multiple regions of the continental United States. During the upcoming years, we plan on expanding FASI’s terminal footprint by opening FASI operations in select Forward Air terminals. We believe the utilization of existing Forward Air terminals will allow us to increase our FASI revenues with minimal addition of fixed costs.
|
·
|
Improve Efficiency of Our Transportation Network.
We constantly seek to improve the efficiency of our airport-to-airport and FASI networks. Regional hubs and direct shuttles improve Forward Air’s efficiency by reducing the number of miles freight must be transported and the number of times freight must be handled and sorted. As the volume of freight between key markets increases, we intend to continue to add direct shuttles. Since 2006, we have constructed or expanded terminals in key gateway cities. With these new and expanded facilities, we believe we will have the necessary space to grow our business in key gateway cities and to offer additional services. We are working to improve our FASI operations by increasing the efficiencies of our daily and weekly transportation routes and the cartons handled per hour on our docks. We are constantly looking to improve our route efficiencies by consolidating loads and utilizing owner-operators when available. We are investing in conveyor systems for certain FASI terminals to increase the productivity of our cargo handlers. Finally, we are actively looking to reduce or eliminate the number of duplicate facilities in cities which have both Forward Air and FASI terminals. We have combined Forward Air and FASI facilities in Dallas/Fort Worth, Texas, Des Moines, Iowa, Denver, Colorado, Kansas City, Missouri, Nashville, TN, Richmond, Virginia and Tulsa, Oklahoma, and will continue this process in upcoming years as the expiration of leases and business volumes allow. In addition, FASI is providing agent station services to Forward Air in Albuquerque, New Mexico and Montgomery, Alabama.
|
·
|
Expand Logistics and Other Services.
We continue to expand our logistics and other services to increase revenue and improve utilization of our Forward Air terminal facilities and labor force. Because of the timing of the arrival and departure of cargo, our Forward Air facilities are under-utilized during certain portions of the day, allowing us to add logistics services without significantly increasing our costs. Therefore, we have added a number of Forward Air logistic services in the past few years, such as TLX, dedicated fleet, warehousing, customs brokerage and shipment consolidation and handling services. These services directly benefit our existing customers and increase our ability to attract new customers, particularly those air freight forwarders that cannot justify providing the services directly. These services are not offered by many transportation providers with whom we compete and are attractive to customers who prefer to use one provider for all of their transportation needs.
|
·
|
Expand Pool Distribution Services and Integrate with our Forward Air Services.
In addition to increasing our revenue from traditional pool distribution services, we are working to expand FASI’s customer base beyond retail and to integrate our Forward Air and FASI service offerings. Through this process, we are able to offer customers linehaul or truckload services, with handling and sorting at the origin and destination terminal, and final distribution to one or many locations utilizing FASI pool distribution and Forward Air Complete™.
|
·
|
Enhance Information Systems.
We are committed to the continued development and enhancement of our information systems in ways that will continue to provide us competitive service advantages and increased productivity. We believe our enhanced systems have and will assist us in capitalizing on new business opportunities with existing customers and developing relationships with new customers.
|
·
|
Pursue Strategic Acquisitions.
We continue to evaluate acquisitions that can increase our penetration of a geographic area, add new customers, add new business verticals, increase freight volume and add new service offerings. In addition, we expect to explore acquisitions that may enable us to offer additional services. Since our inception, we have acquired certain assets and liabilities of 12 businesses that met one or more of these criteria. During 2008, we acquired certain assets and liabilities of two companies that met these criteria.
|
Ø
|
In March 2008, we acquired certain assets and liabilities of Pinch Holdings, Inc. and its related company AFTCO Enterprises, Inc. and certain of their respective wholly-owned subsidiaries (“Pinch”). Pinch was a privately-held provider of pool distribution, airport-to-airport, truckload, custom, and cartage services primarily to the Southwestern continental United States. This acquisition gave FASI a presence primarily in Texas and strengthened the position of our Forward Air network in the Southwest United States.
|
Ø
|
In September 2008, we acquired certain assets and liabilities of Service Express, Inc. (“Service Express”). The acquisition of Service Express, a privately-held provider of pool distribution services, helped us expand FASI’s geographic footprint in the Mid-Atlantic and Southeastern continental United States.
|
City
|
Airport
Served
|
City
|
Airport
Served
|
|||
Albany, NY
|
ALB
|
Louisville, KY
|
SDF
|
|||
Albuquerque, NM***
|
ABQ
|
Memphis, TN
|
MEM
|
|||
Allentown, PA*
|
ABE
|
McAllen, TX
|
MFE
|
|||
Atlanta, GA
|
ATL
|
Miami, FL
|
MIA
|
|||
Austin, TX
|
AUS
|
Milwaukee, WI
|
MKE
|
|||
Baltimore, MD
|
BWI
|
Minneapolis, MN
|
MSP
|
|||
Baton Rouge, LA*
|
BTR
|
Mobile, AL*
|
MOB
|
|||
Birmingham, AL*
|
BHM
|
Moline, IA
|
MLI
|
|||
Blountville, TN*
|
TRI
|
Montgomery, AL***
|
MGM
|
|||
Boston, MA
|
BOS
|
Nashville, TN**
|
BNA
|
|||
Buffalo, NY
|
BUF
|
Newark, NJ
|
EWR
|
|||
Burlington, IA
|
BRL
|
Newburgh, NY
|
SWF
|
|||
Cedar Rapids, IA
|
CID
|
New Orleans, LA
|
MSY
|
|||
Charleston, SC
|
CHS
|
New York, NY
|
JFK
|
|||
Charlotte, NC
|
CLT
|
Norfolk, VA
|
ORF
|
|||
Chicago, IL
|
ORD
|
Oklahoma City, OK
|
OKC
|
|||
Cincinnati, OH
|
CVG
|
Omaha, NE
|
OMA
|
|||
Cleveland, OH
|
CLE
|
Orlando, FL
|
MCO
|
|||
Columbia, SC*
|
CAE
|
Pensacola, FL*
|
PNS
|
|||
Columbus, OH
|
CMH
|
Philadelphia, PA
|
PHL
|
|||
Corpus Christi, TX*
|
CRP
|
Phoenix, AZ
|
PHX
|
|||
Dallas/Ft. Worth, TX**
|
DFW
|
Pittsburgh, PA
|
PIT
|
|||
Dayton, OH*
|
DAY
|
Portland, OR
|
PDX
|
|||
Denver, CO**
|
DEN
|
Raleigh, NC
|
RDU
|
|||
Des Moines, IA**
|
DSM
|
Richmond, VA**
|
RIC
|
|||
Detroit, MI
|
DTW
|
Rochester, NY
|
ROC
|
|||
El Paso, TX
|
ELP
|
Sacramento, CA
|
SMF
|
|||
Greensboro, NC
|
GSO
|
Salt Lake City, UT
|
SLC
|
|||
Greenville, SC
|
GSP
|
San Antonio, TX
|
SAT
|
|||
Hartford, CT
|
BDL
|
San Diego, CA
|
SAN
|
|||
Harrisburg, PA
|
MDT
|
San Francisco, CA
|
SFO
|
|||
Houston, TX
|
IAH
|
Seattle, WA
|
SEA
|
|||
Huntsville, AL*
|
HSV
|
Shreveport, LA*
|
SHV
|
|||
Indianapolis, IN
|
IND
|
St. Louis, MO
|
STL
|
|||
Jacksonville, FL
|
JAX
|
Syracuse, NY
|
SYR
|
|||
Kansas City, MO**
|
MCI
|
Tampa, FL
|
TPA
|
|||
Knoxville, TN*
|
TYS
|
Toledo, OH*
|
TOL
|
|||
Lafayette, LA*
|
LFT
|
Tucson, AZ*
|
TUS
|
|||
Laredo, TX
|
LRD
|
Tulsa, OK**
|
TUL
|
|||
Las Vegas, NV
|
LAS
|
Washington, DC
|
IAD
|
|||
Little Rock, AR*
|
LIT
|
Montreal, Canada*
|
YUL
|
|||
Los Angeles, CA
|
LAX
|
Toronto, Canada
|
YYZ
|
Average Weekly
|
||
Volume in Pounds
|
||
Year
|
(In millions)
|
|
1996
|
10.5
|
|
1997
|
12.4
|
|
1998
|
15.4
|
|
1999
|
19.4
|
|
2000
|
24.0
|
|
2001
|
24.3
|
|
2002
|
24.5
|
|
2003
|
25.3
|
|
2004
|
28.7
|
|
2005
|
31.2
|
|
2006
|
32.2
|
|
2007
|
32.8
|
|
2008
|
34.2
|
|
2009
|
28.5
|
|
2010
|
32.6
|
·
|
expedited full truckload, or TLX;
|
·
|
dedicated fleets;
|
·
|
customs brokerage, such as assistance with U.S. Customs and Border Protection (“U.S. Customs”) procedures for both import and export shipments;
|
·
|
warehousing, dock and office space;
|
·
|
drayage and intermodal;
|
·
|
hotshot or ad-hoc ultra expedited services; and
|
·
|
shipment consolidation and handling, such as shipment build-up and break-down and reconsolidation of air or ocean pallets or containers.
|
Average Weekly Miles
|
||
Year
|
(In thousands)
|
|
2003
|
211
|
|
2004
|
259
|
|
2005
|
248
|
|
2006
|
331
|
|
2007
|
529
|
|
2008
|
676
|
|
2009
|
672
|
|
2010
|
788
|
City
|
|
Albuquerque, NM***
|
Kansas City, MO**
|
Atlanta, GA
|
Lakeland, FL
|
Baltimore, MD
|
Las Vegas, NV
|
Charlotte, NC
|
Miami, FL
|
Dallas/Ft. Worth, TX**
|
Montgomery, AL***
|
Denver, CO**
|
Nashville, TN**
|
Des Moines, IA**
|
Richmond, VA**
|
Greensboro, NC
|
San Antonio, TX
|
Houston, TX
|
Tulsa, OK**
|
Jacksonville, FL
|
Item 1A.
|
Risk
Factors
|
·
|
identification of appropriate acquisition candidates;
|
·
|
negotiation of acquisitions on favorable terms and valuations;
|
·
|
integration of acquired businesses and personnel;
|
·
|
implementation of proper business and accounting controls;
|
·
|
ability to obtain financing, on favorable terms or at all;
|
·
|
diversion of management attention;
|
·
|
retention of employees and customers;
|
·
|
unexpected liabilities;
|
·
|
potential erosion of operating profits as new acquisitions may be unable to achieve profitability comparable with our core airport-to-airport business, and
|
·
|
detrimental issues not discovered during due diligence.
|
·
|
authorize us to issue preferred stock, the terms of which may be determined at the sole discretion of our Board of Directors and may adversely affect the voting or economic rights of our shareholders; and
|
·
|
establish advance notice requirements for nominations for election to the Board of Directors and for proposing matters that can be acted on by shareholders at a meeting.
|
Item 1B.
|
Unresolved
Staff
Comments
|
Item
2.
|
Properties
|
Item 3.
|
L
egal
Proceedings
|
Item 4.
|
Sub
miss
ion of Matters to a Vote of Security Holders
|
Name
|
Age
|
Position
|
||
Bruce A. Campbell
|
59
|
President and Chief Executive Officer
|
||
Rodney L. Bell
|
48
|
Chief Financial Officer, Senior Vice President and Treasurer
|
||
Craig A. Drum
|
55
|
Senior Vice President, Sales
|
||
Matthew J. Jewell
|
44
|
Executive Vice President, Chief Legal Officer and Secretary
|
||
Chris C. Ruble
|
48
|
Executive Vice President, Operations
|
Item 5.
|
Mar
ket
for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
|
2010
|
High
|
Low
|
Dividends
|
||||||
First Quarter
|
$ | 27.37 | $ | 21.92 | $ | 0.07 | |||
Second Quarter
|
30.30 | 25.29 | 0.07 | ||||||
Third Quarter
|
29.91 | 22.39 | 0.07 | ||||||
Fourth Quarter
|
30.16 | 24.63 | 0.07 |
2009
|
High
|
Low
|
Dividends
|
||||||
First Quarter
|
$
|
24.66
|
$
|
13.80
|
$
|
0.07
|
|||
Second Quarter
|
24.60
|
13.48
|
0.07
|
||||||
Third Quarter
|
25.39
|
19.73
|
0.07
|
||||||
Fourth Quarter
|
26.29
|
20.32
|
0.07
|
Equity Compensation Plan Information
|
|||||||
Plan Category
|
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
|
||||
|
(a)
|
(b)
|
|||||
Equity Compensation Plans Approved by Shareholders
|
3,784,123
|
$
|
26
|
2,759,609
|
|||
Equity Compensation Plans Not Approved by Shareholders
|
--
|
--
|
--
|
||||
Total
|
3,784,123
|
$
|
26
|
2,759,609
|
(a)
|
Excludes purchase rights accruing under the ESPP, which has an original shareholder-approved reserve of 500,000 shares. Under the ESPP, each eligible employee may purchase up to 2,000 shares of Common Stock at semi-annual intervals each year at a purchase price per share equal to 90.0% of the lower of the fair market value of the Common Stock at close of (i) the first trading day of an option period or (ii) the last trading day of an option period.
|
(b)
|
Includes shares available for future issuance under the ESPP. As of December 31, 2010, an aggregate of 439,090 shares of Common Stock were available for issuance under the ESPP.
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
||||||
Forward Air Corporation
|
100
|
79
|
85
|
66
|
68
|
77
|
|||||
Nasdaq Trucking and Transportation Stocks Index
|
100
|
106
|
110
|
77
|
80
|
105
|
|||||
Nasdaq Global Select Stock Market Index
|
100
|
110
|
122
|
73
|
106
|
124
|
Item 6.
|
Selected Fina
ncia
l Data
|
Item 7.
|
Management’s Disc
uss
ion and Analysis of Financial Condition and Results of Operations
|
Year ended
|
||||||||||||||
December 31,
|
December 31,
|
Percent
|
||||||||||||
2010
|
2009
|
Change
|
Change
|
|||||||||||
Operating revenue
|
$ | 483.9 | $ | 417.4 | $ | 66.5 | 15.9 | % | ||||||
Operating expenses:
|
||||||||||||||
Purchased transportation
|
201.4 | 174.4 | 27.0 | 15.5 | ||||||||||
Salaries, wages, and employee benefits
|
129.1 | 118.8 | 10.3 | 8.7 | ||||||||||
Operating leases
|
26.3 | 27.3 | (1.0 | ) | (3.7 | ) | ||||||||
Depreciation and amortization
|
20.4 | 19.7 | 0.7 | 3.6 | ||||||||||
Insurance and claims
|
8.4 | 9.7 | (1.3 | ) | (13.4 | ) | ||||||||
Fuel expense
|
8.5 | 7.3 | 1.2 | 16.4 | ||||||||||
Other operating expenses
|
36.1 | 34.4 | 1.7 | 4.9 | ||||||||||
Impairment of goodwill and other intangible assets
|
-- | 7.2 | (7.2 | ) | (100.0 | ) | ||||||||
Total operating expenses
|
430.2 | 398.8 | 31.4 | 7.9 | ||||||||||
Income from operations
|
53.7 | 18.6 | 35.1 | 188.7 | ||||||||||
Other income (expense):
|
||||||||||||||
Interest expense
|
(0.7 | ) | (0.7 | ) | -- | -- | ||||||||
Other, net
|
0.1 | 0.1 | -- | -- | ||||||||||
Total other expense
|
(0.6 | ) | (0.6 | ) | -- | -- | ||||||||
Income before income taxes
|
53.1 | 18.0 | 35.1 | 195.0 | ||||||||||
Income taxes
|
21.1 | 8.2 | 12.9 | 157.3 | ||||||||||
Net income
|
$ | 32.0 | $ | 9.8 | $ | 22.2 | 226.5 | % |
Year ended
|
||||||||||||||||||||
December 31,
|
Percent of
|
December 31,
|
Percent of
|
Percent
|
||||||||||||||||
2010
|
Revenue
|
2009
|
Revenue
|
Change
|
Change
|
|||||||||||||||
Operating revenue
|
||||||||||||||||||||
Forward Air
|
$ | 412.9 | 85.3 | % | $ | 346.3 | 83.0 | % | $ | 66.6 | 19.2 | % | ||||||||
FASI
|
72.5 | 15.0 | 72.5 | 17.4 | -- | -- | ||||||||||||||
Intercompany Eliminations
|
(1.5 | ) | (0.3 | ) | (1.4 | ) | (0.4 | ) | (0.1 | ) | 7.1 | |||||||||
Total
|
483.9 | 100.0 | 417.4 | 100.0 | 66.5 | 15.9 | ||||||||||||||
Purchased transportation
|
||||||||||||||||||||
Forward Air
|
185.8 | 45.0 | 160.3 | 46.3 | 25.5 | 15.9 | ||||||||||||||
FASI
|
16.9 | 23.3 | 15.4 | 21.2 | 1.5 | 9.7 | ||||||||||||||
Intercompany Eliminations
|
(1.3 | ) | (86.7 | ) | (1.3 | ) | 92.9 | -- | -- | |||||||||||
Total
|
201.4 | 41.6 | 174.4 | 41.8 | 27.0 | 15.5 | ||||||||||||||
Salaries, wages and employee benefits
|
||||||||||||||||||||
Forward Air
|
98.3 | 23.8 | 85.7 | 24.7 | 12.6 | 14.7 | ||||||||||||||
FASI
|
30.8 | 42.5 | 33.1 | 45.6 | (2.3 | ) | (6.9 | ) | ||||||||||||
Total
|
129.1 | 26.7 | 118.8 | 28.5 | 10.3 | 8.7 | ||||||||||||||
Operating leases
|
||||||||||||||||||||
Forward Air
|
18.6 | 4.5 | 18.7 | 5.4 | (0.1 | ) | (0.5 | ) | ||||||||||||
FASI
|
7.7 | 10.6 | 8.6 | 11.9 | (0.9 | ) | (10.5 | ) | ||||||||||||
Total
|
26.3 | 5.4 | 27.3 | 6.5 | (1.0 | ) | (3.7 | ) | ||||||||||||
Depreciation and amortization
|
||||||||||||||||||||
Forward Air
|
16.5 | 4.0 | 16.1 | 4.6 | 0.4 | 2.5 | ||||||||||||||
FASI
|
3.9 | 5.4 | 3.6 | 5.0 | 0.3 | 8.3 | ||||||||||||||
Total
|
20.4 | 4.2 | 19.7 | 4.7 | 0.7 | 3.6 | ||||||||||||||
Insurance and claims
|
||||||||||||||||||||
Forward Air
|
6.2 | 1.5 | 7.6 | 2.2 | (1.4 | ) | (18.4 | ) | ||||||||||||
FASI
|
2.2 | 3.0 | 2.1 | 2.9 | 0.1 | 4.8 | ||||||||||||||
Total
|
8.4 | 1.7 | 9.7 | 2.3 | (1.3 | ) | (13.4 | ) | ||||||||||||
Fuel expense
|
||||||||||||||||||||
Forward Air
|
3.8 | 0.9 | 3.1 | 0.9 | 0.7 | 22.6 | ||||||||||||||
FASI
|
4.7 | 6.5 | 4.2 | 5.8 | 0.5 | 11.9 | ||||||||||||||
Total
|
8.5 | 1.8 | 7.3 | 1.8 | 1.2 | 16.4 | ||||||||||||||
Other operating expenses
|
||||||||||||||||||||
Forward Air
|
29.8 | 7.2 | 27.7 | 8.0 | 2.1 | 7.6 | ||||||||||||||
FASI
|
6.5 | 9.0 | 6.8 | 9.4 | (0.3 | ) | (4.4 | ) | ||||||||||||
Intercompany Eliminations
|
(0.2 | ) | (13.3 | ) | (0.1 | ) | 7.1 | (0.1 | ) | 100.0 | ||||||||||
Total
|
36.1 | 7.5 | 34.4 | 8.3 | 1.7 | 4.9 | ||||||||||||||
Impairment of goodwill
and other intangible assets
|
||||||||||||||||||||
Forward Air
|
-- | -- | 0.2 | 0.1 | (0.2 | ) | (100.0 | ) | ||||||||||||
FASI
|
-- | -- | 7.0 | 9.6 | (7.0 | ) | (100.0 | ) | ||||||||||||
Total
|
-- | -- | 7.2 | 1.7 | (7.2 | ) | (100.0 | ) | ||||||||||||
Income (loss) from operations
|
||||||||||||||||||||
Forward Air
|
53.9 | 13.1 | 26.9 | 7.8 | 27.0 | 100.4 | ||||||||||||||
FASI
|
(0.2 | ) | (0.3 | ) | (8.3 | ) | (11.4 | ) | 8.1 | (97.6 | ) | |||||||||
Total
|
$ | 53.7 | 11.1 | % | $ | 18.6 | 4.4 | % | $ | 35.1 | 188.7 | % |
Percent of
|
Percent of
|
Percent
|
|||||||||||||||
2010
|
Revenue
|
2009
|
Revenue
|
Change
|
Change
|
||||||||||||
Forward Air revenue
|
|||||||||||||||||
Airport-to-airport
|
$ | 322.2 | 78.0 | % | $ | 268.8 | 77.6 | % | $ | 53.4 | 19.9 | % | |||||
Logistics
|
65.6 | 15.9 | 54.4 | 15.7 | 11.2 | 20.6 | |||||||||||
Other
|
25.1 | 6.1 | 23.1 | 6.7 | 2.0 | 8.7 | |||||||||||
Total
|
$ | 412.9 | 100.0 | % | $ | 346.3 | 100.0 | % | $ | 66.6 | 19.2 | % | |||||
Forward Air purchased transportation
|
|||||||||||||||||
Airport-to-airport
|
$ | 129.3 | 40.1 | % | $ | 112.8 | 42.0 | % | $ | 16.5 | 14.6 | % | |||||
Logistics
|
50.2 | 76.5 | 42.2 | 77.6 | 8.0 | 19.0 | |||||||||||
Other
|
6.3 | 25.1 | 5.3 | 22.9 | 1.0 | 18.9 | |||||||||||
Total
|
$ | 185.8 | 45.0 | % | $ | 160.3 | 46.3 | % | $ | 25.5 | 15.9 | % |
Year ended
|
|||||||||||||||
December 31,
|
December 31,
|
Percent
|
|||||||||||||
2009
|
2008
|
Change
|
Change
|
||||||||||||
Operating revenue
|
$ | 417.4 | $ | 474.4 | $ | (57.0 | ) | (12.0 | ) | % | |||||
Operating expenses:
|
|||||||||||||||
Purchased transportation
|
174.4 | 189.0 | (14.6 | ) | (7.7 | ) | |||||||||
Salaries, wages, and employee benefits
|
118.8 | 116.5 | 2.3 | 2.0 | |||||||||||
Operating leases
|
27.3 | 24.4 | 2.9 | 11.9 | |||||||||||
Depreciation and amortization
|
19.7 | 16.6 | 3.1 | 18.7 | |||||||||||
Insurance and claims
|
9.7 | 8.1 | 1.6 | 19.8 | |||||||||||
Fuel expense
|
7.3 | 11.5 | (4.2 | ) | (36.5 | ) | |||||||||
Other operating expenses
|
34.4 | 38.0 | (3.6 | ) | (9.5 | ) | |||||||||
Impairment of goodwill and other intangible assets
|
7.2 | -- | 7.2 | 100.0 | |||||||||||
Total operating expenses
|
398.8 | 404.1 | (5.3 | ) | (1.3 | ) | |||||||||
Income from operations
|
18.6 | 70.3 | (51.7 | ) | (73.5 | ) | |||||||||
Other income (expense):
|
|||||||||||||||
Interest expense
|
(0.7 | ) | (1.2 | ) | 0.5 | (41.7 | ) | ||||||||
Other, net
|
0.1 | 0.3 | (0.2 | ) | (66.7 | ) | |||||||||
Total other expense income
|
(0.6 | ) | (0.9 | ) | 0.3 | (33.3 | ) | ||||||||
Income before income taxes
|
18.0 | 69.4 | (51.4 | ) | (74.1 | ) | |||||||||
Income taxes
|
8.2 | 26.9 | (18.7 | ) | (69.5 | ) | |||||||||
Net income
|
$ | 9.8 | $ | 42.5 | $ | (32.7 | ) | (76.9 | ) | % |
Year ended
|
|||||||||||||||||||||
December 31,
|
Percent of
|
December 31,
|
Percent of
|
Percent
|
|||||||||||||||||
2009
|
Revenue
|
2008
|
Revenue
|
Change
|
Change
|
||||||||||||||||
Operating revenue
|
|||||||||||||||||||||
Forward Air
|
$
|
346.3
|
83.0
|
%
|
$
|
421.2
|
88.8
|
%
|
$
|
(74.9
|
)
|
(17.8
|
)
|
%
|
|||||||
FASI
|
72.5
|
17.4
|
55.3
|
11.6
|
17.2
|
31.1
|
|||||||||||||||
Intercompany Eliminations
|
(1.4
|
)
|
(0.4
|
)
|
(2.1
|
)
|
(0.4
|
)
|
0.7
|
(33.3
|
)
|
||||||||||
Total
|
417.4
|
100.0
|
474.4
|
100.0
|
(57.0
|
)
|
(12.0
|
)
|
|||||||||||||
Purchased transportation
|
|||||||||||||||||||||
Forward Air
|
160.3
|
46.3
|
179.9
|
42.7
|
(19.6
|
)
|
(10.9
|
)
|
|||||||||||||
FASI
|
15.4
|
21.2
|
11.2
|
20.2
|
4.2
|
37.5
|
|||||||||||||||
Intercompany Eliminations
|
(1.3
|
)
|
92.9
|
(2.1
|
)
|
100.0
|
0.8
|
(38.1
|
)
|
||||||||||||
Total
|
174.4
|
41.8
|
189.0
|
39.9
|
(14.6
|
)
|
(7.7
|
)
|
|||||||||||||
Salaries, wages and employee benefits
|
|||||||||||||||||||||
Forward Air
|
85.7
|
24.7
|
92.5
|
22.0
|
(6.8
|
)
|
(7.4
|
)
|
|||||||||||||
FASI
|
33.1
|
45.6
|
24.0
|
43.4
|
9.1
|
37.9
|
|||||||||||||||
Total
|
118.8
|
28.5
|
116.5
|
24.6
|
2.3
|
2.0
|
|||||||||||||||
Operating leases
|
|||||||||||||||||||||
Forward Air
|
18.7
|
5.4
|
18.5
|
4.4
|
0.2
|
1.1
|
|||||||||||||||
FASI
|
8.6
|
11.9
|
5.9
|
10.7
|
2.7
|
45.8
|
|||||||||||||||
Total
|
27.3
|
6.5
|
24.4
|
5.1
|
2.9
|
11.9
|
|||||||||||||||
Depreciation and amortization
|
|||||||||||||||||||||
Forward Air
|
16.1
|
4.6
|
14.4
|
3.4
|
1.7
|
11.8
|
|||||||||||||||
FASI
|
3.6
|
5.0
|
2.2
|
4.0
|
1.4
|
63.6
|
|||||||||||||||
Total
|
19.7
|
4.7
|
16.6
|
3.5
|
3.1
|
18.7
|
|||||||||||||||
Insurance and claims
|
|||||||||||||||||||||
Forward Air
|
7.6
|
2.2
|
7.3
|
1.7
|
0.3
|
4.1
|
|||||||||||||||
FASI
|
2.1
|
2.9
|
0.8
|
1.4
|
1.3
|
162.5
|
|||||||||||||||
Total
|
9.7
|
2.3
|
8.1
|
1.7
|
1.6
|
19.8
|
|||||||||||||||
Fuel expense
|
|||||||||||||||||||||
Forward Air
|
3.1
|
0.9
|
5.8
|
1.4
|
(2.7
|
)
|
(46.6
|
)
|
|||||||||||||
FASI
|
4.2
|
5.8
|
5.7
|
10.3
|
(1.5
|
)
|
(26.3
|
)
|
|||||||||||||
Total
|
7.3
|
1.8
|
11.5
|
2.4
|
(4.2
|
)
|
(36.5
|
)
|
|||||||||||||
Other operating expenses
|
|||||||||||||||||||||
Forward Air
|
27.7
|
8.0
|
32.1
|
7.6
|
(4.4
|
)
|
(13.7
|
)
|
|||||||||||||
FASI
|
6.8
|
9.4
|
5.9
|
10.7
|
0.9
|
15.3
|
|||||||||||||||
Intercompany Eliminations
|
(0.1
|
)
|
7.1
|
--
|
--
|
(0.1
|
)
|
100.0
|
|||||||||||||
Total
|
34.4
|
8.3
|
38.0
|
8.0
|
(3.6
|
)
|
(9.5
|
)
|
|||||||||||||
Impairment of goodwill
and other intangible assets
|
|||||||||||||||||||||
Forward Air
|
0.2
|
0.1
|
--
|
--
|
0.2
|
100.0
|
|||||||||||||||
FASI
|
7.0
|
9.6
|
--
|
--
|
7.0
|
100.0
|
|||||||||||||||
Total
|
7.2
|
1.7
|
--
|
--
|
7.2
|
100.0
|
|||||||||||||||
Income (loss) from operations
|
|||||||||||||||||||||
Forward Air
|
26.9
|
7.8
|
70.7
|
16.8
|
(43.8
|
)
|
(62.0
|
)
|
|||||||||||||
FASI
|
(8.3
|
)
|
(11.4
|
)
|
(0.4
|
)
|
(0.7
|
)
|
(7.9
|
)
|
1,975.0
|
||||||||||
Total
|
$
|
18.6
|
4.4
|
%
|
$
|
70.3
|
14.8
|
%
|
$
|
(51.7
|
)
|
(73.5
|
)
|
%
|
Percent of
|
Percent of
|
Percent
|
|||||||||||||||||
2009
|
Revenue
|
2008
|
Revenue
|
Change
|
Change
|
||||||||||||||
Forward Air revenue
|
|||||||||||||||||||
Airport-to-airport
|
$
|
268.8
|
77.6
|
%
|
$
|
336.2
|
79.8
|
%
|
$
|
(67.4
|
)
|
(20.0
|
)
|
%
|
|||||
Logistics
|
54.4
|
15.7
|
59.9
|
14.2
|
(5.5
|
)
|
(9.2
|
)
|
|||||||||||
Other
|
23.1
|
6.7
|
25.1
|
6.0
|
(2.0
|
)
|
(8.0
|
)
|
|||||||||||
Total
|
$
|
346.3
|
100.0
|
%
|
$
|
421.2
|
100.0
|
%
|
$
|
(74.9
|
)
|
(17.8
|
)
|
%
|
|||||
Forward Air purchased transportation
|
|||||||||||||||||||
Airport-to-airport
|
$
|
112.8
|
42.0
|
%
|
$
|
128.9
|
38.3
|
%
|
$
|
(16.1
|
)
|
(12.5
|
)
|
%
|
|||||
Logistics
|
42.2
|
77.6
|
44.5
|
74.3
|
(2.3
|
)
|
(5.2
|
)
|
|||||||||||
Other
|
5.3
|
22.9
|
6.5
|
25.9
|
(1.2
|
)
|
(18.5
|
)
|
|||||||||||
Total
|
$
|
160.3
|
46.3
|
%
|
$
|
179.9
|
42.7
|
%
|
$
|
(19.6
|
)
|
(10.9
|
)
|
%
|
December 31,
|
December 31,
|
December 31,
|
||||||
2010
|
2009
|
2008
|
||||||
Expected dividend yield
|
1.3 | % | 0.9 | % | 0.8 | % | ||
Expected stock price volatility
|
45.7 | % | 42.3 | % | 35.2 | % | ||
Weighted average risk-free interest rate
|
2.5 | % | 2.0 | % | 2.8 | % | ||
Expected life of options (years)
|
4.5 | 4.5 | 4.5 |
Contractual Obligations
|
Payment Due Period
|
||||||||||||||
2016 and
|
|||||||||||||||
Total
|
2011
|
2012-2013
|
2014-2015
|
Thereafter
|
|||||||||||
Capital lease obligations
|
$
|
1,624
|
$
|
705
|
$
|
871
|
$
|
48
|
$
|
--
|
|||||
Equipment purchase commitments
|
14,211
|
14,211
|
--
|
--
|
--
|
||||||||||
Operating leases
|
87,793
|
20,566
|
31,518
|
21,825
|
13,884
|
||||||||||
Senior credit facility
|
50,000
|
--
|
50,000
|
--
|
--
|
||||||||||
Total contractual cash obligations
|
$
|
153,628
|
$
|
35,482
|
$
|
82,389
|
$
|
21,873
|
$
|
13,884
|
Item 7A.
|
Quantitative and
Qual
itative Disclosures About Market Risk
|
Item 8.
|
Financial
State
ments and Supplementary Data
|
Item 9.
|
Changes in and D
isag
reements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Cont
rols
and Procedures
|
/s/ Ernst & Young LLP
|
|
Nashville, Tennessee
|
|
February 24, 2011
|
Item 9B.
|
Other
Info
rmation
|
Item 10.
|
Directors,
Exec
utive Officers and Corporate Governance
|
Item 11.
|
Executive
Comp
ensation
|
Item 12.
|
Security
Own
ership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
Item 13.
|
Certain R
elati
onships and Related Transactions, and Director Independence
|
Item 14.
|
Principal
Acco
unting Fees and Services
|
Item 15.
|
Ex
hib
its, Financial Statement Schedules
|
(a)(1) and (2)
|
List of Financial Statements and Financial Statement Schedules.
|
(a)(3)
|
List of Exhibits.
|
(b)
|
Exhibits.
|
(c)
|
Financial Statement Schedules.
|
Forward Air Corporation
|
|||
Date: February 24, 2011
|
By:
|
/s/ Rodney L. Bell
|
|
Rodney L. Bell
|
|||
Chief Financial Officer, Senior Vice President
|
|||
and Treasurer (Principal Financial Officer)
|
|||
By:
|
/s/ Michael P. McLean
|
||
Michael P. McLean
|
|||
Chief Accounting Officer, Vice President
|
|||
and Controller (Principal Accounting Officer)
|
Signature
|
Title
|
Date
|
||
/s/ Bruce A. Campbell
|
Chairman, President and Chief Executive
|
February 24, 2011
|
||
Bruce A. Campbell
|
Officer (Principal Executive Officer)
|
|||
/s/ Rodney L. Bell
|
Chief Financial Officer, Senior Vice President
|
February 24, 2011
|
||
Rodney L. Bell
|
and Treasurer ( Principal Financial Officer)
|
|||
/s/ Michael P. McLean
|
Chief Accounting Officer, Vice President and
|
February 24, 2011
|
||
Michael P. McLean
|
Controller (Principal Accounting Officer)
|
|||
/s/ G. Michael Lynch
|
Lead Director
|
February 24, 2011
|
||
G. Michael Lynch
|
||||
/s/ Ron W. Allen
|
Director
|
February 24, 2011
|
||
Ron W. Allen
|
||||
/s/ C. Robert Campbell
|
Director
|
February 24, 2011
|
||
C. Robert Campbell
|
||||
/s/ Richard W. Hanselman
|
Director
|
February 24, 2011
|
||
Richard W. Hanselman
|
||||
/s/ C. John Langley, Jr.
|
Director
|
February 24, 2011
|
||
C. John Langley, Jr.
|
||||
/s/ Tracy A. Leinbach
|
Director
|
February 24, 2011
|
||
Tracy A. Leinbach
|
||||
/s/ Larry D. Leinweber
|
Director
|
February 24, 2011
|
||
Larry D. Leinweber
|
||||
/s/ Ray A. Mundy
|
Director
|
February 24, 2011
|
||
Ray A. Mundy
|
||||
/s/ Gary L. Paxton
|
Director
|
February 24, 2011
|
||
Gary L. Paxton
|
Page No.
|
|
F-3
|
|
F-4
|
|
F-6
|
|
F-7
|
|
F-8
|
|
F-9
|
/s/ Ernst & Young LLP
|
|
Nashville, Tennessee
|
|
February 24, 2011
|
Forward Air Corporation
|
|||||
Consolidated B
alanc
e Sheets
|
|||||
(Dollars in thousands)
|
|||||
December 31,
|
December 31,
|
||||
2010
|
2009
|
||||
Assets
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$ | 74,504 | $ | 42,035 | |
Accounts receivable, less allowance of $1,996 in 2010 and $1,919 in 2009
|
62,763 | 55,720 | |||
Inventories
|
830 | 938 | |||
Prepaid expenses and other current assets
|
5,717 | 5,272 | |||
Deferred income taxes
|
2,149 | 3,261 | |||
Total current assets
|
145,963 | 107,226 | |||
Property and equipment:
|
|||||
Land
|
16,928 | 16,928 | |||
Buildings
|
65,433 | 68,444 | |||
Equipment
|
123,989 | 111,728 | |||
Leasehold improvements
|
5,907 | 5,243 | |||
Construction in progress
|
1,447 | 2,373 | |||
Total property and equipment
|
213,704 | 204,716 | |||
Less accumulated depreciation and amortization
|
87,272 | 75,990 | |||
Net property and equipment
|
126,432 | 128,726 | |||
Goodwill and other acquired intangibles:
|
|||||
Goodwill
|
43,332 | 43,332 | |||
Other acquired intangibles, net of accumulated amortization of $16,871 in 2010 and $12,281 in 2009
|
31,259 | 35,849 | |||
Total net goodwill and other acquired intangibles
|
74,591 | 79,181 | |||
Other assets
|
1,810 | 1,597 | |||
Total assets
|
$ | 348,796 | $ | 316,730 | |
The accompanying notes are an integral part of the consolidated financial statements.
|
Forward Air Corporation
|
|||||
Consolidated Balance Sheets (Continued)
|
|||||
(Dollars in thousands)
|
|||||
December 31,
|
December 31,
|
||||
2010
|
2009
|
||||
Liabilities and Shareholders’ Equity
|
|||||
Current liabilities:
|
|||||
Accounts payable
|
$ | 10,687 | $ | 10,333 | |
Accrued payroll and related items
|
5,858 | 5,394 | |||
Insurance and claims accruals
|
5,647 | 5,622 | |||
Payables to owner-operators
|
3,674 | 3,603 | |||
Collections on behalf of customers
|
430 | 697 | |||
Other accrued expenses
|
671 | 1,791 | |||
Income taxes payable
|
-- | 1,424 | |||
Current portion of capital lease obligations
|
638 | 898 | |||
Current portion of long-term debt
|
-- | 21 | |||
Total current liabilities
|
27,605 | 29,783 | |||
Capital lease obligations, less current portion
|
883 | 2,169 | |||
Long-term debt, less current portion
|
50,000 | 50,000 | |||
Other long-term liabilities
|
8,106 | 4,485 | |||
Deferred income taxes
|
6,116 | 5,786 | |||
Commitments and contingencies (Note 9)
|
|||||
Shareholders’ equity:
|
|||||
Preferred stock, $0.01 par value
|
|||||
Authorized shares - 5,000,000
|
|||||
No shares issued
|
-- | -- | |||
Common stock, $0.01 par value
|
|||||
Authorized shares – 50,000,000
|
|||||
Issued and outstanding shares – 29,030,919 in 2010 and 28,950,391 in 2009
|
290 | 290 | |||
Additional paid-in capital
|
24,300 | 16,631 | |||
Retained earnings
|
231,496 | 207,586 | |||
Total shareholders’ equity
|
256,086 | 224,507 | |||
Total liabilities and shareholders’ equity
|
$ | 348,796 | $ | 316,730 |
Forward Air Corporation
|
|||||||||||
Consolidated
State
ments of Income
|
|||||||||||
(In thousands, except per share data)
|
|||||||||||
Year ended
|
|||||||||||
December 31,
|
December 31,
|
December 31,
|
|||||||||
2010
|
2009
|
2008
|
|||||||||
Operating revenue:
|
|||||||||||
Forward Air
|
|||||||||||
Airport-to-airport
|
$ | 321,702 | $ | 268,245 | $ | 334,860 | |||||
Logistics
|
64,935 | 54,067 | 59,290 | ||||||||
Other
|
25,130 | 23,076 | 25,133 | ||||||||
Forward Air Solutions
|
|||||||||||
Pool distribution
|
72,172 | 72,022 | 55,153 | ||||||||
Total operating revenue
|
483,939 | 417,410 | 474,436 | ||||||||
Operating expenses:
|
|||||||||||
Purchased transportation
|
|||||||||||
Forward Air
|
|||||||||||
Airport-to-airport
|
129,111 | 112,516 | 128,785 | ||||||||
Logistics
|
50,225 | 42,188 | 44,560 | ||||||||
Other
|
6,288 | 5,234 | 6,425 | ||||||||
Forward Air Solutions
|
|||||||||||
Pool distribution
|
15,747 | 14,490 | 9,315 | ||||||||
Total purchased transportation
|
201,371 | 174,428 | 189,085 | ||||||||
Salaries, wages and employee benefits
|
129,108 | 118,804 | 116,504 | ||||||||
Operating leases
|
26,252 | 27,294 | 24,403 | ||||||||
Depreciation and amortization
|
20,450 | 19,722 | 16,615 | ||||||||
Insurance and claims
|
8,425 | 9,719 | 8,099 | ||||||||
Fuel expense
|
8,461 | 7,312 | 11,465 | ||||||||
Other operating expenses
|
36,133 | 34,424 | 37,980 | ||||||||
Impairment of goodwill and other intangible assets
|
-- | 7,157 | -- | ||||||||
Total operating expenses
|
430,200 | 398,860 | 404,151 | ||||||||
Income from operations
|
53,739 | 18,550 | 70,285 | ||||||||
Other income (expense):
|
|||||||||||
Interest expense
|
(730 | ) | (670 | ) | (1,236 | ) | |||||
Other, net
|
90 | 69 | 362 | ||||||||
Total other expense
|
(640 | ) | (601 | ) | (874 | ) | |||||
Income before income taxes
|
53,099 | 17,949 | 69,411 | ||||||||
Income taxes
|
21,063 | 8,147 | 26,869 | ||||||||
Net income
|
$ | 32,036 | $ | 9,802 | $ | 42,542 | |||||
Net income per share:
|
|||||||||||
Basic
|
$ | 1.11 | $ | 0.34 | $ | 1.48 | |||||
Diluted
|
$ | 1.10 | $ | 0.34 | $ | 1.47 | |||||
Weighted average shares outstanding:
|
|||||||||||
Basic
|
28,984 | 28,928 | 28,808 | ||||||||
Diluted
|
29,111 | 28,993 | 29,025 | ||||||||
Dividends per share:
|
$ | 0.28 | $ | 0.28 | $ | 0.28 | |||||
The accompanying notes are an integral part of the consolidated financial statements.
|
Forward Air Corporation
|
|||||||||||||||||
Consolidated Statem
ents
of Shareholders' Equity
|
|||||||||||||||||
(In thousands, except per share data)
|
|||||||||||||||||
Additional
|
Total
|
||||||||||||||||
Common Stock
|
Paid-in
|
Retained
|
Shareholders'
|
||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Equity
|
|||||||||||||
Balance at December 31, 2007
|
28,648 | $ | 286 | $ | -- | $ | 171,447 | $ | 171,733 | ||||||||
Net and comprehensive income for 2008
|
-- | -- | -- | 42,542 | 42,542 | ||||||||||||
Exercise of stock options
|
191 | 2 | 3,083 | -- | 3,085 | ||||||||||||
Common stock issued under employee stock purchase plan
|
10 | -- | 255 | -- | 255 | ||||||||||||
Share-based compensation
|
-- | -- | 6,269 | (2 | ) | 6,267 | |||||||||||
Dividends ($0.28 per share)
|
-- | -- | 2 | (8,091 | ) | (8,089 | ) | ||||||||||
Vesting of previously non-vested shares
|
56 | 1 | (1 | ) | -- | -- | |||||||||||
Cash settlement of share-based awards for minimum tax withholdings
|
(11 | ) | -- | (389 | ) | -- | (389 | ) | |||||||||
Income tax benefit from stock options exercised
|
-- | -- | 1,030 | -- | 1,030 | ||||||||||||
Balance at December 31, 2008
|
28,894 | 289 | 10,249 | 205,896 | 216,434 | ||||||||||||
Net and comprehensive income for 2009
|
-- | -- | -- | 9,802 | 9,802 | ||||||||||||
Exercise of stock options
|
1 | -- | 8 | -- | 8 | ||||||||||||
Common stock issued under employee stock purchase plan
|
12 | -- | 237 | -- | 237 | ||||||||||||
Share-based compensation
|
-- | -- | 6,754 | -- | 6,754 | ||||||||||||
Dividends ($0.28 per share)
|
-- | -- | 3 | (8,112 | ) | (8,109 | ) | ||||||||||
Vesting of previously non-vested shares
|
56 | 1 | (1 | ) | -- | -- | |||||||||||
Cash settlement of share-based awards for minimum tax withholdings
|
(13 | ) | -- | (249 | ) | -- | (249 | ) | |||||||||
Income tax expense from stock options exercised
|
-- | -- | (370 | ) | -- | (370 | ) | ||||||||||
Balance at December 31, 2009
|
28,950 | 290 | 16,631 | 207,586 | 224,507 | ||||||||||||
Net and comprehensive income for 2010
|
-- | -- | -- | 32,036 | 32,036 | ||||||||||||
Exercise of stock options
|
46 | -- | 991 | -- | 991 | ||||||||||||
Common stock issued under employee stock purchase plan
|
8 | -- | 195 | -- | 195 | ||||||||||||
Share-based compensation
|
-- | -- | 6,284 | -- | 6,284 | ||||||||||||
Dividends ($0.28 per share)
|
-- | -- | 5 | (8,126 | ) | (8,121 | ) | ||||||||||
Vesting of previously non-vested shares
|
27 | -- | -- | -- | -- | ||||||||||||
Income tax benefit from stock options exercised
|
-- | -- | 194 | -- | 194 | ||||||||||||
Balance at December 31, 2010
|
29,031 | $ | 290 | $ | 24,300 | $ | 231,496 | $ | 256,086 |
Forward Air Corporation
|
|||||||||||
Consolidated Stat
emen
ts of Cash Flows
|
|||||||||||
(In thousands)
|
|||||||||||
Year ended
|
|||||||||||
December 31,
|
December 31,
|
December 31,
|
|||||||||
2010
|
2009
|
2008
|
|||||||||
Operating activities:
|
|||||||||||
Net income
|
$ | 32,036 | $ | 9,802 | $ | 42,542 | |||||
Adjustments to reconcile net income to net cash provided by operating activities
|
|||||||||||
Depreciation and amortization
|
20,450 | 19,722 | 16,615 | ||||||||
Impairment of goodwill and other intangible assets
|
-- | 7,157 | -- | ||||||||
Share-based compensation
|
6,284 | 6,754 | 6,267 | ||||||||
(Gain) loss on disposal of property and equipment
|
(570 | ) | (6 | ) | 171 | ||||||
Provision for (recovery) loss on receivables
|
(52 | ) | (60 | ) | 903 | ||||||
Provision for revenue adjustments
|
1,589 | 2,390 | 4,259 | ||||||||
Deferred income taxes
|
1,436 | (4,581 | ) | 1,151 | |||||||
Tax (benefit) expense for stock options exercised
|
(194 | ) | 370 | (1,030 | ) | ||||||
Changes in operating assets and liabilities, net of acquisitions
|
|||||||||||
Accounts receivable
|
(8,580 | ) | (844 | ) | (2,376 | ) | |||||
Prepaid expenses and other current assets
|
(40 | ) | 548 | (2,102 | ) | ||||||
Accounts payable and accrued expenses
|
3,022 | 3,831 | (2,665 | ) | |||||||
Income taxes
|
(1,386 | ) | 5,096 | (4,652 | ) | ||||||
Net cash provided by operating activities
|
53,995 | 50,179 | 59,083 | ||||||||
Investing activities:
|
|||||||||||
Proceeds from disposal of property and equipment
|
1,482 | 270 | 87 | ||||||||
Purchases of property and equipment
|
(15,148 | ) | (20,847 | ) | (26,699 | ) | |||||
Acquisition of businesses
|
-- | -- | (29,566 | ) | |||||||
Other
|
(224 | ) | 372 | (10 | ) | ||||||
Net cash used in investing activities
|
(13,890 | ) | (20,205 | ) | (56,188 | ) | |||||
Financing activities:
|
|||||||||||
Payments of debt and capital lease obligations
|
(895 | ) | (1,549 | ) | (1,603 | ) | |||||
Borrowings on line of credit
|
-- | -- | 45,000 | ||||||||
Payments on line of credit
|
-- | -- | (25,000 | ) | |||||||
Proceeds from exercise of stock options
|
991 | 8 | 3,085 | ||||||||
Payments of cash dividends
|
(8,121 | ) | (8,109 | ) | (8,089 | ) | |||||
Common stock issued under employee stock purchase plan
|
195 | 237 | 255 | ||||||||
Cash settlement of share-based awards for minimum tax withholdings
|
-- | (249 | ) | (389 | ) | ||||||
Tax benefit (expense) for stock options exercised
|
194 | (370 | ) | 1,030 | |||||||
Net cash (used in) provided by financing activities
|
(7,636 | ) | (10,032 | ) | 14,289 | ||||||
Net increase in cash
|
32,469 | 19,942 | 17,184 | ||||||||
Cash at beginning of year
|
42,035 | 22,093 | 4,909 | ||||||||
Cash at end of year
|
$ | 74,504 | $ | 42,035 | $ | 22,093 | |||||
Non-cash activity:
|
|||||||||||
Unpaid capital expenditures included in accounts payable
|
$ | -- | $ | 234 | $ | 1,640 |
1.
|
Accounting Policies
|
1.
|
Accounting Policies (Continued)
|
Buildings
|
30-40 years
|
Equipment
|
3-10 years
|
Leasehold improvements
|
Lesser of Useful Life or Initial Lease Term
|
1.
|
Accounting Policies (Continued)
|
2011
|
$ | 1,290 |
2012
|
646 | |
2013
|
526 | |
2014
|
463 | |
2015
|
246 | |
Total
|
$ | 3,171 |
1.
|
Accounting Policies (Continued)
|
December 31,
|
December 31,
|
December 31,
|
||||||
2010
|
2009
|
2008
|
||||||
Expected dividend yield
|
1.3 | % | 0.9 | % | 0.8 | % | ||
Expected stock price volatility
|
45.7 | % | 42.3 | % | 35.2 | % | ||
Weighted average risk-free interest rate
|
2.5 | % | 2.0 | % | 2.8 | % | ||
Expected life of options (years)
|
4.5 | 4.5 | 4.5 |
1.
|
Accounting Policies (Continued)
|
2.
|
Acquisition of Businesses
|
Service Express
|
||
Current assets
|
$ | 258 |
Property and equipment
|
2,819 | |
Customer relationships
|
6,000 | |
Goodwill
|
5,204 | |
Total assets acquired
|
14,281 | |
Current liabilities
|
281 | |
Capital lease obligations
|
3,353 | |
Total liabilities assumed
|
3,634 | |
Net assets acquired
|
$ | 10,647 |
2.
|
Acquisition of Businesses (Continued)
|
Forward Air
|
FASI
|
Total
|
||||||
Current assets
|
$ | 72 | $ | -- | $ | 72 | ||
Property and equipment
|
960 | 148 | 1,108 | |||||
Non-compete agreements
|
80 | -- | 80 | |||||
Customer relationships
|
4,700 | 4,300 | 9,000 | |||||
Goodwill
|
5,573 | 3,437 | 9,010 | |||||
Total assets acquired
|
11,385 | 7,885 | 19,270 | |||||
Debt and capital leases
|
480 | 108 | 588 | |||||
Total liabilities assumed
|
480 | 108 | 588 | |||||
Net assets acquired
|
$ | 10,905 | $ | 7,777 | $ | 18,682 |
2011
|
2012
|
2013
|
2014
|
2015
|
||||||||||
Customer relationships
|
$ | 4,255 | $ | 4,255 | $ | 4,255 | $ | 4,067 | $ | 3,261 | ||||
Non-compete agreements
|
335 | 311 | 24 | 20 | 20 | |||||||||
Total
|
$ | 4,590 | $ | 4,566 | $ | 4,279 | $ | 4,087 | $ | 3,281 |
3.
|
Goodwill and Other Long-Lived Assets
|
3.
|
Goodwill and Other Long-Lived Assets (Continued)
|
Forward Air
|
FASI
|
Total
|
||||||||||||||
Accumulated
|
Accumulated
|
|||||||||||||||
Goodwill
|
Impairment
|
Goodwill
|
Impairment
|
Net
|
||||||||||||
Beginning balance, December 31, 2008
|
$ | 37,926 | $ | -- | $ | 12,304 | $ | -- | $ | 50,230 | ||||||
Adjustment to Service Express acquisition
|
-- | -- | 55 | -- | 55 | |||||||||||
Impairment loss
|
-- | -- | -- | (6,953 | ) | (6,953 | ) | |||||||||
Ending balance, December 31, 2009
|
$ | 37,926 | $ | -- | $ | 12,359 | $ | (6,953 | ) | $ | 43,332 |
4.
|
Property
|
5.
|
Debt and Capital Lease Obligations
|
5.
|
Debt and Capital Lease Obligations (Continued)
|
December 31,
|
December 31,
|
||||||
2010
|
2009
|
||||||
Buildings
|
$
|
--
|
$
|
3,015
|
|||
Equipment
|
2,071
|
2,391
|
|||||
Accumulated amortization
|
(1,401
|
)
|
(2,756
|
)
|
|||
$
|
670
|
$
|
2,650
|
2011
|
$ | 705 |
2012
|
585 | |
2013
|
286 | |
2014
|
48 | |
Total
|
1,624 | |
Less amounts representing interest
|
103 | |
Present value of net minimum lease payments
(including current portion of $638)
|
$ | 1,521 |
6.
|
Shareholders’ Equity, Stock Options and Net Income per Share
|
6.
|
Shareholders’ Equity, Stock Options and Net Income per Share (Continued)
|
2010
|
2009
|
2008
|
||||||||||||||||||
Weighted-
|
Weighted-
|
Weighted-
|
||||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||||
Options
|
Exercise
|
Options
|
Exercise
|
Options
|
Exercise
|
|||||||||||||||
(000)
|
Price
|
(000)
|
Price
|
(000)
|
Price
|
|||||||||||||||
Outstanding at beginning of year
|
3,086
|
$
|
26
|
2,446
|
$
|
28
|
2,246
|
$
|
26
|
|||||||||||
Granted
|
664
|
22
|
675
|
23
|
387
|
30
|
||||||||||||||
Exercised
|
(35
|
)
|
21
|
(1
|
)
|
18
|
(153
|
)
|
15
|
|||||||||||
Forfeited
|
(13
|
)
|
26
|
(34
|
)
|
28
|
(34
|
)
|
32
|
|||||||||||
Outstanding at end of year
|
3,702
|
$
|
26
|
3,086
|
$
|
26
|
2,446
|
$
|
28
|
|||||||||||
Exercisable at end of year
|
2,475
|
$
|
27
|
1,906
|
$
|
27
|
1,528
|
$
|
26
|
|||||||||||
Options available for grant
|
1,713
|
2,363
|
3,004
|
|||||||||||||||||
Weighted-average fair value of
|
||||||||||||||||||||
options granted during the year
|
$
|
8.24
|
$
|
7.96
|
$
|
9.17
|
||||||||||||||
Aggregate intrinsic value
|
||||||||||||||||||||
for options exercised
|
$
|
268
|
$
|
3
|
$
|
3,089
|
||||||||||||||
Average aggregate intrinsic value
|
||||||||||||||||||||
for options outstanding
|
$
|
3,613
|
||||||||||||||||||
Average aggregate intrinsic value
|
||||||||||||||||||||
for exercisable options
|
$
|
--
|
Outstanding
|
Exercisable
|
||||||||||||
Weighted
|
Weighted
|
Weighted
|
|||||||||||
Range of
|
Number
|
Average
|
Average
|
Number
|
Average
|
||||||||
Exercise
|
Outstanding
|
Remaining
|
Exercise
|
Exercisable
|
Exercise
|
||||||||
Price
|
(000)
|
Contractual Life
|
Price
|
(000)
|
Price
|
||||||||
$
|
13.25-18.82
|
312
|
2.4
|
$
|
15.48
|
312
|
$
|
15.48
|
|||||
20.05-29.44
|
2,578
|
4.7
|
25.33
|
1,356
|
27.18
|
||||||||
30.35-35.53
|
812
|
3.4
|
31.37
|
807
|
31.36
|
||||||||
$
|
13.25-35.53
|
3,702
|
4.2
|
$
|
25.82
|
2,475
|
$
|
27.07
|
6.
|
Shareholders’ Equity, Stock Options and Net Income per Share (Continued)
|
6.
|
Shareholders’ Equity, Stock Options and Net Income per Share (Continued)
|
2010
|
2009
|
2008
|
||||||||||||||||
Weighted-
|
Weighted-
|
Weighted-
|
||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||
Options
|
Exercise
|
Options
|
Exercise
|
Options
|
Exercise
|
|||||||||||||
(000)
|
Price
|
(000)
|
Price
|
(000)
|
Price
|
|||||||||||||
Outstanding at beginning of year
|
74
|
$
|
22
|
74
|
$
|
22
|
112
|
$
|
22
|
|||||||||
Granted
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||
Exercised
|
(11
|
)
|
24
|
--
|
--
|
(38
|
)
|
22
|
||||||||||
Forfeited
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||
Outstanding and exercisable at end of year
|
63
|
$
|
22
|
74
|
$
|
22
|
74
|
$
|
22
|
|||||||||
Aggregate intrinsic value
|
||||||||||||||||||
for options exercised
|
$
|
37
|
$
|
--
|
$
|
497
|
||||||||||||
Average aggregate intrinsic value
|
||||||||||||||||||
for options outstanding and exercisable
|
$
|
332
|
6.
|
Shareholders’ Equity, Stock Options and Net Income per Share (Continued)
|
2010
|
2009
|
2008
|
||||||
Numerator:
|
||||||||
Numerator for basic and diluted net income per share
|
$ | 32,036 | $ | 9,802 | $ | 42,542 | ||
Denominator:
|
||||||||
Denominator for basic net income per share - weighted-average shares (in thousands)
|
28,984 | 28,928 | 28,808 | |||||
Effect of dilutive stock options and non-vested shares (in thousands)
|
127 | 65 | 217 | |||||
Denominator for diluted net income per share - adjusted weighted-average shares (in thousands)
|
29,111 | 28,993 | 29,025 | |||||
Basic net income per share
|
$ | 1.11 | $ | 0.34 | $ | 1.48 | ||
Diluted net income per share
|
$ | 1.10 | $ | 0.34 | $ | 1.47 |
7.
|
Income Taxes
|
2010
|
2009
|
2008
|
||||||||
Current:
|
||||||||||
Federal
|
$ | 16,816 | $ | 10,711 | $ | 22,242 | ||||
State
|
2,811 | 2,017 | 3,476 | |||||||
19,627 | 12,728 | 25,718 | ||||||||
Deferred:
|
||||||||||
Federal
|
1,566 | (4,310 | ) | 1,061 | ||||||
State
|
(130 | ) | (271 | ) | 90 | |||||
1,436 | (4,581 | ) | 1,151 | |||||||
$ | 21,063 | $ | 8,147 | $ | 26,869 |
2010
|
2009
|
2008
|
|||||||||
Tax expense at the statutory rate
|
$ | 18,585 | $ | 6,282 | $ | 24,294 | |||||
State income taxes, net of federal benefit
|
1,790 | 1,135 | 2,318 | ||||||||
Qualified stock options
|
516 | 659 | 503 | ||||||||
Meals and entertainment
|
186 | 176 | 194 | ||||||||
Deferred tax asset valuation allowance
|
(124 | ) | 183 | (132 | ) | ||||||
Federal income tax credits
|
-- | (269 | ) | (328 | ) | ||||||
Other
|
110 | (19 | ) | 20 | |||||||
$ | 21,063 | $ | 8,147 | $ | 26,869 |
7.
|
Income Taxes (Continued)
|
December 31,
|
December 31,
|
||||||
2010
|
2009
|
||||||
Deferred tax assets:
|
|||||||
Accrued expenses
|
$
|
4,669
|
$
|
4,365
|
|||
Allowance for doubtful accounts
|
772
|
742
|
|||||
Non-compete agreements
|
2,227
|
1,711
|
|||||
Share-based compensation
|
5,101
|
3,548
|
|||||
Accruals for income tax contingencies
|
114
|
114
|
|||||
Impairment of goodwill and other intangible assets
|
1,805
|
2,104
|
|||||
Net operating loss carryforwards
|
444
|
279
|
|||||
Total deferred tax assets
|
15,132
|
12,863
|
|||||
Valuation allowance
|
(335
|
)
|
(459
|
)
|
|||
Total deferred tax assets, net of valuation allowance
|
14,797
|
12,404
|
|||||
Deferred tax liabilities:
|
|||||||
Tax over book depreciation
|
11,541
|
8,786
|
|||||
Prepaid expenses deductible when paid
|
1,463
|
1,800
|
|||||
Goodwill
|
5,760
|
4,343
|
|||||
Total deferred tax liabilities
|
18,764
|
14,929
|
|||||
Net deferred tax liabilities
|
$
|
(3,967
|
)
|
$
|
(2,525
|
)
|
December 31,
|
December 31,
|
||||||
2010
|
2009
|
||||||
Current assets
|
$
|
2,149
|
$
|
3,261
|
|||
Noncurrent liabilities
|
(6,116
|
)
|
(5,786
|
)
|
|||
$
|
(3,967
|
)
|
$
|
(2,525
|
)
|
7.
|
Income Taxes (Continued)
|
Liability for
|
|||
Unrecognized Tax
|
|||
Benefits
|
|||
Balance at December 31, 2007
|
$ | 1,117 | |
Additions for tax positions of current year
|
126 | ||
Reductions for settlement with state taxing authorities
|
(815 | ) | |
Balance at December 31, 2008
|
428 | ||
Additions for tax positions of current year
|
71 | ||
Additions for tax positions of prior years
|
143 | ||
Balance at December 31, 2009
|
642 | ||
Additions for tax positions of current year
|
41 | ||
Additions for tax positions of prior years
|
190 | ||
Reductions for settlement with state taxing authorities
|
(148 | ) | |
Balance at December 31, 2010
|
$ | 725 |
8.
|
Operating Leases
|
8.
|
Operating Leases (Continued)
|
2011
|
$ | 20,566 |
2012
|
17,193 | |
2013
|
14,325 | |
2014
|
12,647 | |
2015
|
9,178 | |
Thereafter
|
13,884 | |
Total
|
$ | 87,793 |
9.
|
Commitments and Contingencies
|
10.
|
Employee Benefit Plan
|
11.
|
Financial Instruments
|
December 31, 2010
|
December 31, 2009
|
||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||
Value
|
Value
|
Value
|
Value
|
||||||||
Senior credit facility
|
$ | 50,000 | $ | 48,480 | $ | 50,000 | $ | 47,461 | |||
Notes payable
|
-- | -- | 21 | 22 | |||||||
Capital lease obligations
|
1,521 | 1,539 | 3,067 | 3,305 |
12.
|
Segment Reporting
|
12.
|
Segment Reporting (Continued)
|
Year ended December 31, 2010
|
Forward Air
|
FASI
|
Eliminations
|
Consolidated
|
||||||||||
External revenues
|
$
|
411,767
|
$
|
72,172
|
$
|
--
|
$
|
483,939
|
||||||
Intersegment revenues
|
1,168
|
311
|
(1,479
|
)
|
--
|
|||||||||
Depreciation and amortization
|
16,496
|
3,954
|
--
|
20,450
|
||||||||||
Share-based compensation expense
|
5,896
|
388
|
--
|
6,284
|
||||||||||
Interest expense
|
671
|
59
|
--
|
730
|
||||||||||
Interest income
|
92
|
4
|
--
|
96
|
||||||||||
Income tax expense
|
20,769
|
294
|
--
|
21,063
|
||||||||||
Net income (loss)
|
32,580
|
(544
|
)
|
--
|
32,036
|
|||||||||
Total assets
|
349,849
|
36,875
|
(37,928
|
)
|
348,796
|
|||||||||
Capital expenditures
|
10,461
|
4,687
|
--
|
15,148
|
||||||||||
Year ended December 31, 2009
|
Forward Air
|
FASI
|
Eliminations
|
Consolidated
|
||||||||||
External revenues
|
$
|
345,388
|
$
|
72,022
|
$
|
--
|
$
|
417,410
|
||||||
Intersegment revenues
|
920
|
446
|
(1,366
|
)
|
--
|
|||||||||
Depreciation and amortization
|
16,096
|
3,626
|
--
|
19,722
|
||||||||||
Share-based compensation expense
|
6,461
|
293
|
--
|
6,754
|
||||||||||
Impairment of goodwill and other intangible assets
|
204
|
6,953
|
--
|
7,157
|
||||||||||
Interest expense
|
572
|
98
|
--
|
670
|
||||||||||
Interest income
|
66
|
6
|
--
|
72
|
||||||||||
Income tax expense (benefit)
|
11,137
|
(2,990
|
)
|
--
|
8,147
|
|||||||||
Net income (loss)
|
15,234
|
(5,432
|
)
|
--
|
9,802
|
|||||||||
Total assets
|
315,267
|
39,591
|
(38,128
|
)
|
316,730
|
|||||||||
Capital expenditures
|
17,961
|
2,886
|
--
|
20,847
|
||||||||||
Year ended December 31, 2008
|
Forward Air
|
FASI
|
Eliminations
|
Consolidated
|
||||||||||
External revenues
|
$
|
419,283
|
$
|
55,153
|
$
|
--
|
$
|
474,436
|
||||||
Intersegment revenues
|
1,929
|
127
|
(2,056
|
)
|
--
|
|||||||||
Depreciation and amortization
|
14,414
|
2,201
|
--
|
16,615
|
||||||||||
Share-based compensation expense
|
6,130
|
137
|
--
|
6,267
|
||||||||||
Interest expense
|
1,157
|
79
|
--
|
1,236
|
||||||||||
Interest income
|
344
|
10
|
--
|
354
|
||||||||||
Income tax expense (benefit)
|
26,996
|
(127
|
)
|
--
|
26,869
|
|||||||||
Net income (loss)
|
42,910
|
(368
|
)
|
--
|
42,542
|
|||||||||
Total assets
|
298,585
|
46,901
|
(37,959
|
)
|
307,527
|
|||||||||
Capital expenditures
|
23,337
|
3,362
|
--
|
26,699
|
13.
|
Quarterly Results of Operations (Unaudited)
|
2010
|
|||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
||||||||
Operating revenue
|
$ | 106,977 | $ | 122,132 | $ | 121,522 | $ | 133,308 | |||
Income from operations
|
6,055 | 13,502 | 15,505 | 18,677 | |||||||
Net income
|
3,419 | 7,912 | 8,888 | 11,817 | |||||||
Net income per share:
|
|||||||||||
Basic
|
$ | 0.12 | $ | 0.27 | $ | 0.31 | $ | 0.41 | |||
Diluted
|
$ | 0.12 | $ | 0.27 | $ | 0.31 | $ | 0.41 |
2009
|
||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||
Operating revenue
|
$ | 96,616 | $ | 99,697 | $ | 103,079 | $ | 118,018 | ||||
Income (loss) from operations
|
(5,026 | ) | 4,873 | 6,671 | 12,032 | |||||||
Net income (loss)
|
(3,104 | ) | 2,844 | 3,779 | 6,283 | |||||||
Net income (loss) per share:
|
||||||||||||
Basic
|
$ | (0.11 | ) | $ | 0.10 | $ | 0.13 | $ | 0.22 | |||
Diluted
|
$ | (0.11 | ) | $ | 0.10 | $ | 0.13 | $ | 0.22 |
Col. A
|
Col. B
|
Col. C
|
Col. D
|
Col. E
|
||||||||||||||
Balance at
|
Charged to
|
Charged to
|
Deductions
|
Balance at
|
||||||||||||||
Beginning
|
Costs and
|
Other Accounts
|
-Describe
|
End of
|
||||||||||||||
of Period
|
Expenses
|
Describe
|
Period
|
|||||||||||||||
Year ended December 31, 2010
|
||||||||||||||||||
Allowance for doubtful accounts
|
$
|
1,457
|
$
|
(52
|
)
|
$
|
--
|
$
|
(214
|
)
|
(2)
|
$
|
1,619
|
|||||
Allowance for revenue adjustments
|
(1)
|
462
|
1,589
|
--
|
1,674
|
(3)
|
377
|
|||||||||||
Income tax valuation
|
459
|
(124
|
)
|
--
|
--
|
335
|
||||||||||||
2,378
|
1,413
|
--
|
1,460
|
2,331
|
||||||||||||||
Year ended December 31, 2009
|
||||||||||||||||||
Allowance for doubtful accounts
|
$
|
1,675
|
$
|
(60
|
)
|
$
|
--
|
$
|
158
|
(2)
|
$
|
1,457
|
||||||
Allowance for revenue adjustments
|
(1)
|
856
|
2,390
|
--
|
2,784
|
(3)
|
462
|
|||||||||||
Income tax valuation
|
276
|
183
|
--
|
--
|
459
|
|||||||||||||
2,807
|
2,513
|
--
|
2,942
|
2,378
|
||||||||||||||
Year ended December 31, 2008
|
||||||||||||||||||
Allowance for doubtful accounts
|
$
|
805
|
$
|
903
|
$
|
--
|
$
|
33
|
(2)
|
$
|
1,675
|
|||||||
Allowance for revenue adjustments
|
(1)
|
337
|
4,259
|
--
|
3,740
|
(3)
|
856
|
|||||||||||
Income tax valuation
|
408
|
--
|
--
|
132
|
(4)
|
276
|
||||||||||||
1,142
|
5,162
|
--
|
3,773
|
2,807
|
(1) Represents an allowance for adjustments to accounts receivable due to disputed rates, accessorial charges and other aspects of previously billed shipments.
|
|||||||
(2) Represents uncollectible accounts written off, net of recoveries
|
|||||||
(3) Represents adjustments to billed accounts receivable
|
|||||||
(4) Represents expired state net operating loss carryforwards
|
EX
HIBI
T INDEX
|
||
No.
|
Exhibit
|
|
3.1
|
Restated Charter of the registrant (incorporated herein by reference to Exhibit 3 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 1999 (File No. 0-22490))
|
|
3.2
|
Amended and Restated Bylaws of the registrant (incorporated herein by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2009 (File No. 0-22490))
|
|
4.1
|
Form of Forward Air Corporation Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1998 filed with the Securities and Exchange Commission on November 16, 1998 (File No. 0-22490))
|
|
10.1
|
*
|
Forward Air Corporation 2005 Employee Stock Purchase Plan (incorporated herein by reference to the registrant's Proxy Statement filed with the Securities and Exchange Commission on April 20, 2005 (File No. 0-22490))
|
10.2
|
*
|
Amended and Restated Stock Option and Incentive Plan (incorporated herein by reference to the registrant's Proxy Statement filed with the Securities and Exchange Commission on April 3, 2008 (File No. 0-22490))
|
10.3
|
Lease Agreement, dated as of June 1, 2006, between the Greeneville-Greene County Airport Authority and the registrant (incorporated herein by reference to Exhibit 10.3 to the registrant's Annaul Report on Form 10-K for the fiscal year ended December 31, 2006 filed with the Securities and Exchange Commission on February 27, 2007 (File No. 0-22490))
|
|
10.4
|
Air Carrier Certificate, effective August 28, 2003 (incorporated herein by reference to Exhibit 10.5 to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission on March 11, 2004 (File No. 0-22490))
|
|
10.5
|
*
|
Amendment to the Non-Employee Director Stock Plan (incorporated herein by reference to Exhibit 10.7 to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission on March 11, 2004 (File No. 0-22490))
|
10.6
|
Credit Agreement dated October 10, 2007 among the registrant and certain of its subsidiaries and Wachovia Bank, N.A. (incorporated herein by reference to Exhibit 2.1 to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 11, 2007 (File No. 0-22490))
|
|
10.7
|
*
|
Employment Agreement dated October 30, 2007, between Forward Air Corporation and Bruce A. Campbell, including Attachment B, Restrictive Covenants Agreement entered into contemporaneously with and as part of the Employment Agreement (incorporated herein by reference to Exhibit 99.1 to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2007 (File No. 0-22490))
|
10.8
|
*
|
Amendment dated December 30, 2008 to Employment Agreement dated October 30, 2007, between Forward Air Corporation and Bruce A. Campbell (incorporated herein by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the Securities and Exchange Commission on February 26, 2009 (File No. 0-22490))
|
10.9
|
*
|
Second Amendment dated February 24, 2009 to Employment Agreement dated October 30, 2007, between Forward Air Corporation and Bruce A. Campbell (incorporated herein by reference to Exhibit 10.10 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the Securities and Exchange Commission on February 26, 2009 (File No. 0-22490))
|
10.10
|
*
|
Third Amendment dated December 15, 2010 to Employment Agreement dated October 30, 2007, between Forward Air Corporation and Bruce A. Campbell
|
10.11
|
*
|
Form of Incentive Stock Option Agreement under the registrant's Amended and Restated Stock Option and Incentive Plan, as amended and 1999 Stock Option and Incentive Plan, as amended, for grants prior to February 12, 2006 (incorporated herein by reference to Exhibit 10.12 to the registrant's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2005 filed with the Securities and Exchange Commission on March 22, 2006 (File No. 0-22490))
|
10.12
|
*
|
Form of Non-Qualified Stock Option Agreement under the registrant's Non-Employee Director Stock Option Plan, as amended, for grants prior to February 12, 2006 (incorporated herein by reference to Exhibit 10.13 to the registrant's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2005 filed with the Securities and Exchange Commission on March 22, 2006 (File No. 0-22490))
|
10.13
|
Forward Air Corporation Section 125 Plan (incorporated herein by reference to Exhibit 10.18 to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the Securities and Exchange Commission on March 15, 2002 (File No. 0-22490))
|
|
10.14
|
*
|
Forward Air Corporation Amended and Restated Stock Option and Incentive Plan (incorporated herein by reference to Appendix A of the registrant's Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2008 (File No. 0-22490))
|
10.15
|
*
|
Form of Incentive Stock Option Agreement under the registrant's Amended and Restated Stock Option and Incentive Plan (incorporated herein by reference to Exhibit 10.19 to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the Securities and Exchange Commission on February 26, 2009 (File No. 0-22490))
|
By: |
/s/ Bruce A. Campbell
|
|
Bruce A. Campbell
|
FORWARD AIR CORPORATION | ||
By: |
/s/ Rodney L. Bell
|
|
Its:
|
Rodney L. Bell
Chief Financial Officer, Senior Vice President and Treasurer
|
(i)
|
the Optionee shall have the right to exercise the Option (at its then Option Price) and receive such property, cash, securities, or any combination thereof upon such exercise as would have been received with respect to the number of shares of Common Stock for which the Option might have been exercised immediately prior to such dissolution, liquidation, or corporate separation or division; or
|
(ii)
|
the Option shall terminate as of a date to be fixed by the Committee and that written notice of the date so fixed shall be given to the Optionee, who shall have the right, within such period as may be specified by the Committee preceding such termination, to exercise all or part of the Option.
|
Very truly yours, | ||
FORWARD AIR CORPORATION | ||
By: |
|
|
Bruce A. Campbell
Chief Executive Officer and President
|
1.
|
The 83(b) Election is Irrevocable. The 83(b) Election is a voluntary election that is available to you. It is your decision whether to file an 83(b) Election.
|
2.
|
If you choose to make an 83(b) Election, the 83(b) Election Form must be filed with the Internal Revenue Service within 30 days of the Grant Date; no exceptions to this rule are made.
|
3.
|
If you choose to make an 83(b) Election, you must provide a copy of the 83(b) Election Form to the Corporate Secretary or other designated officer of the Company. This copy should be provided to the Company at the same time that you file your 83(b) Election Form with the Internal Revenue Service.
|
4.
|
In addition to making the filing under Item 2 above, you must attach a copy of your 83(b) Election Form to your tax return for the taxable year that includes the Grant Date.
|
5.
|
If you make an 83(b) Election and later forfeit the Award Shares, you will not be entitled to a refund of the taxes paid with respect to the gross income you recognized under the 83(b) Election.
|
6.
|
You must consult your personal tax advisor before making an 83(b) Election. The attached election forms are intended as samples only, they must be tailored to your circumstances and may not be relied upon without consultation with a personal tax advisor.
|
I.
|
GENERAL POLICY
|
A.
|
This Code of Business Conduct and Ethics (the “Code”) embodies the commitment of Forward Air Corporation and each of its subsidiaries (collectively referred to herein as “Forward Air” or the “Company”) to conduct its business in accordance with all applicable laws, rules and regulations and with high ethical, moral, and legal standards, efficiently, in good faith, with due care, and in the best interests of the Company, its employees and its owners. All employees, officers and directors have a primary duty to act at all times to uphold these standards and to act with honesty, integrity, fairness, accountability, respect in dealing with the Company’s employees, customers, suppliers and investors and the general public and without actual or apparent conflict of interest.
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B.
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This Code applies to all employees, officers and directors and serves as a guide in assessing and addressing legal and ethical obligations. The Code is not intended to be exhaustive and cannot address every possible situation that may arise. Accordingly, in addition to this Code, the Company maintains policy and procedure documents, and handbooks, that address specific subjects and situations. This Code covers some of the more important policies that govern the conduct of employees, officers and directors. In addition to the provisions set forth in this Code, our directors are subject to fiduciary duties under the laws of the State of Tennessee, our state of incorporation. Our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and other members of senior financial management are subject to specific provisions mandated by rules of the Securities and Exchange Commission (the “SEC”), as set forth in Section XX of this Code.
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C.
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All employees (which term, as used in this Code, includes all officers, unless the context requires otherwise) are expected to conduct themselves in the performance of their jobs in a manner consistent with high ethical, moral, and legal standards. Compliance with the Code is the responsibility of each employee of the Company and is, in fact, a condition of employment. Violations of the Code may subject the violator to disciplinary action, including where appropriate termination of employment. Violations of certain parts of the Code may also subject the individual employee and the Company to civil and/or criminal liability.
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D.
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If an employee is in doubt about any situation, advice should be sought. It is the responsibility of all employees to regularly review their knowledge and understanding of the Code and to uphold these standards in their daily business conduct.
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E.
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In the sections which follow, principles and guidelines are set forth concerning major areas of attention.
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II.
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EQUAL EMPLOYMENT OPPORTUNITY AND HARASSMENT
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III.
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COMPLIANCE WITH LAWS AND REGULATIONS
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IV.
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SECURITIES TRADING; DISCLOSURE OF INFORMATION TO THE PUBLIC
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A.
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The Company complies with the “insider trading laws”, which restrict transactions by persons with access to material non-public information, and has adopted an insider trading policy which is applicable to all employees, officers and directors. It is illegal and against Company policy for any employee, officer or director to directly or indirectly buy or sell Company securities while in possession of material, non-public information (“inside information”); these same restrictions apply to the securities of other companies if you come to possess the inside information in the course of your work for the Company; it is also illegal and against Company policy to inform other persons about inside information or to recommend buying or selling any securities based on such information. If any employee, officer or director has any questions regarding the “insider trading laws” or the Company’s insider trading policy, he or she should contact the Company’s Chief Compliance Officer.
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B.
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It is the Company’s policy to disclose material information concerning the Company to the public only in accordance with the applicable securities’ laws in order to avoid inappropriate publicity and ensure that all such information is communicated in a way that is reasonably designed to provide broad, non-exclusionary distribution of information to the public. Only those individuals designated by the Company to be its authorized speakers may disclose material information concerning the Company to analysts, investors, the press and the public.
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V.
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USE OF COMPANY RESOURCES AND CONFIDENTIAL INFORMATION
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A.
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The Company's resources include, among many other valuable assets, its equipment, computers, facilities, proprietary business and technical information of the Company and of third parties that is in the Company's possession and the work time of Company employees.
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B.
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Our employees have a personal responsibility to see that these resources are efficiently put to their intended use to create the highest quality customer services. Accordingly, the following shall apply:
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1.
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Employees may receive medical, business and technical information in trust and are expected to maintain such information in confidence and not to disclose it to others or use it for other than the Company's benefit. All such information is for the sole and exclusive use of the Company. This information includes, but is not limited to, names of customers, vendors and suppliers, descriptions of equipment, facility layouts, systems software, operational records and personnel files, business plans, financial information, costs, projections, budgets and all documents and data which relate to such matters.
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2.
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Employees may receive business, technical and related information of third parties that has been placed in the Company's possession in trust. They must maintain such information in confidence and not disclose it to others or use it for any purpose other than that for which it was intended.
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3.
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Access to and use of Company resources is only permitted for valid Company purposes. Employees should report any misuse or misappropriation of Company assets to their immediate supervisor.
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4.
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Commitments of Company resources may be made only in accordance with management's general or specific authorization. Managers should delegate authority judiciously, consistent with applicable law, and in accordance with Company policy. In addition, management-level personnel should ensure that employees clearly understand the scope of their responsibilities and the extent of their authority.
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5.
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Upon termination of employment, regardless of the reason, each employee shall immediately return to the Company all resources of the Company used by the employee during employment or otherwise maintained in the employee's possession or control or to which the employee has access.
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VI.
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CONFLICTS OF INTEREST
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A.
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to have a material financial interest in, to have a position of material control or influence over, or to serve as an officer, manager, or consultant to any organization which has or seeks to have any business dealings with the Company or which is in actual or potential competition with the Company or, without the Company's written approval, to serve as a director of such an organization; (Note: ownership by a director, employee, or a family member, of one percent (1%) of shares in a publicly-held corporation will likely not be considered to create a conflict of interest.)
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B.
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to buy, sell, or lease any kind of property, facilities, equipment, or service from or to the Company, or to have a financial interest in any such property, facilities, equipment, or service, without the written approval of the CEO and the Company’s Chief Legal Officer (or in the case of the of the CEO or the Company’s Chief Legal Officer, the approval of the Company's Board of Directors or an appropriate committee of the Board);
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C.
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to use the Company's resources for any reason other than valid Company purposes;
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D.
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to give, release, or discuss with anyone not authorized by the Company any data or information on Company activities which is not available to the general public and which may be used to the personal advantage of the recipient or to use such information to the personal advantage of the employee, the director, or their family or friends;
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E.
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to usurp, directly or otherwise take advantage of any existing or potential business activity or opportunity that the Company has expressed an interest, or that was intended for the Company's benefit, for self gain or gain by a family member or friend; and
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F.
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to engage in any business activity which may result in a conflict or the appearance of a conflict between the private interests of the employee, the director, or his or her family or friends, and the interests of the Company or which may interfere with or adversely affect the employee's or director’s ability to perform his or her duties for the Company.
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VII.
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ANTITRUST LAWS
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VIII.
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GIFTS TO CUSTOMERS AND SUPPLIERS
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A.
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Gifts in the form of cash, loans, stocks, or other types of cash equivalents must not be given regardless of amount.
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B.
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Gifts and entertainment should be of nominal value only, not to exceed $100 in value, and must be consistent with accepted business practices and should comply with the policies of both the Company and the organization employing the recipient.
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C.
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The gift and/or entertainment must be consistent with all applicable laws and regulations and in accordance with generally acceptable ethical practices in all governing jurisdictions.
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D.
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The Company prohibits gifts and/or entertainment for government entities, government officials, political party officials, political parties or candidates for political office. The provision of such gifts must comply with Section X of this Code.
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IX.
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RECEIPT OF GIFTS FROM VENDORS OR CUSTOMERS
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A.
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Gifts, entertainment, or other preferential treatment must not be solicited by an employee, director or any of their family members or friends.
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B.
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Employees and directors may accept common courtesies usually associated with accepted business practices.
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C.
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Gifts in the form of cash, loans, securities, or other types of cash equivalents must not be accepted regardless of amount.
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D.
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The offering of gifts, entertainment or other preferential treatment that exceeds nominal value, and in no event exceeds $100 in value, to an employee, director or any of their family members or friends should be promptly reported in writing by the employee to his or her Department Manager or by the director to the Board of Directors or a designated Board committee.
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X.
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PAYMENTS TO GOVERNMENT OFFICIALS
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A.
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Federal and state laws prohibits the offer, promise, or gift of anything of value to an employee, agent, or official of the government or any government entity if made with an intent to influence such individual within his or her area of responsibility. A number of other governmental subdivisions have similar laws and regulations.
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B.
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In order to avoid any appearance of impropriety as well as any questions as to conduct under these laws and regulations, the Company has adopted a policy of prohibiting entertainment of and gifts, gratuities, and favors to federal, state and local government employees, agents, or officials. No Company employee, agent, consultant, joint venture partner or anyone else doing business in the Company’s name may ever provide or promise to provide, directly or indirectly, any payment or anything else of value to any government official, political party official, political party or candidate for political office in order to obtain or retain business, or to secure preferential government treatment for the Company.
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C.
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No political contributions with Company funds shall be directly or indirectly made to support any candidate or political party except as provided in Section XII of this Code.
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XI.
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MARKETING ARRANGEMENTS, UTILIZING AGENTS
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SALES REPRESENTATIVES, OR CONSULTANTS
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XII.
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POLITICAL AFFAIRS
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A.
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It is the policy of the Company to maintain a continuing interest in political and governmental affairs at the national, state, or local levels, concentrating on those matters bearing on the interests of the Company. Employees, officers and directors are encouraged to participate in the electoral process at all levels of government by voting and supporting candidates and issues of his or her choice.
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B.
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No Company funds will be used to make contributions or expenditures in connection with any election or political activity unless consistent with applicable law.
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C.
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While encouraging employees, officers and directors to take a personal interest in politics, the Company will not pressure any person into political activity against their will or beyond their interests. Each individual must make his or her own decision as to the level and affiliation of his or her participation in politics. Since partisan political activity is highly personal, it must be done on his or her personal time and at his or her own expense.
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D.
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The Company will continue to develop friendly working relationships with elected representatives and government officials so that mutual interests may be developed from time to time, but the Company, its employees, officers and directors must not engage in any conduct which would improperly influence or even give the appearance of improperly influencing a legislator or other government employee in the performance of his or her duties.
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XIII.
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SAFETY AND HEALTH
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XIV.
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COMMUNITY PARTICIPATION
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XV.
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MAKING AND KEEPING PROPER BOOKS AND RECORDS
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A.
|
The integrity of the Company's financial, operational, occupational and other recordkeeping is based upon the validity, accuracy, and completeness of the basic information supporting the entries made in the Company's records. False, improper, fraudulent, misleading, or artificial entries are not permitted regardless of purpose. Specifically, the following standards must be maintained:
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1.
|
All payments and transactions must be supported by appropriate documents properly describing such payments or transactions.
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2.
|
No undisclosed, unrecorded, or unauthorized funds or assets may be established or maintained for any purpose; no secret or special books and records may be maintained for any purpose.
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3.
|
No false, improper, fraudulent or artificial entries shall be made in any records of the Company for any reason, and no employee shall engage in any arrangement that results in such prohibited acts.
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4.
|
Employees shall provide accurate information in response to inquiries from the Company's auditors and certified public accountants and from the Company's Chief Legal Officer.
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B.
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The integrity of the Company's computer database is based upon the validity, accuracy, and completeness of the entries made to the database and of the programs and files that exist in the system. False, improper, fraudulent, misleading, or artificial entries or improper development or maintenance of programs and files are not permitted regardless of purpose. Changes to computer programs or software require the prior written approval of the Company official in charge of computer systems.
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XVI.
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GOVERNMENT IMPORT AND EXPORT CONTROLS
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XVII.
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TRANSPORTATION REGULATIONS
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XVIII.
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REPORTING PROCEDURE
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XIX.
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CONFIDENTIAL REPORTING PROCEDURE
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A.
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The Code provides an overview of the legal and ethical responsibilities that all of the Company’s employees and directors share. Each employee and director must uphold these responsibilities. The standards and expectations outlined here are intended as a guide for making the right choices. If any aspect of the Code is unclear to an employee or director, or if an employee or director has any questions or faces dilemmas that are not addressed, this should be brought to the Company's attention. If an employee or director becomes aware of a situation in which he or she believes his or her legal or ethical rights are being violated or if an employee or director feels that he or she is being pressured to violate the law or an ethical responsibility, it is the employee’s or director’s personal responsibility to communicate this concern to the Company.
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|
•
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A report will be forwarded to appropriate Company management for follow-up.
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|
•
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The concern will be addressed by members of management that may include representatives from the Company’s Legal Department or Internal Audit. If the inquiry is one that can be properly handled by someone in the region or district, it will be referred there for resolution. Each concern will be carefully evaluated before it is referred for investigation or resolution.
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|
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•
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The concern will be handled promptly, discreetly and professionally. Discussions and inquiries will be kept in confidence to the extent appropriate or permitted by law.
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|
B.
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All reports of questionable conduct or conduct that is suspected of violating applicable laws the Code or other Company policies or procedures, regardless of the method by which the report is made, will be investigated and, if verified, appropriate disciplinary action up to and including dismissal will be taken against any employee who has violated applicable laws, the Code or other Company policies or procedures. The identity of the employee making the disclosure will not be revealed without the employee's permission, unless ordered by a court of law or requested by or pursuant to a grand jury, nor will the same be recorded in the Company's personnel information for that employee. The fact that an employee has reported suspected violations will not be the basis for any adverse personnel action against the reporting employee by the Company.
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C.
|
Employees should keep in mind that it is against the Code for any employee to attempt to slander another employee through false accusations, malicious rumors, or other untruths about another employee's conduct as it relates to compliance with the Code.
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XX.
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ADDITIONAL PROVISIONS APPLICABLE TO THE CEO AND SENIOR FINANCIAL MANAGEMENT
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A.
|
The CEO, the CFO and all senior financial management are responsible for full, fair, accurate, timely and understandable disclosure in the periodic reports required to be filed by the Company with the SEC, as well as compliance with applicable governmental rules and regulations. Accordingly, it is the responsibility of the CEO, the CFO and each senior financial manager to promptly bring to the attention of the CEO and/or the CFO, as appropriate, any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings. In addition, the CEO, the CFO and each senior financial manager will assist the persons preparing the Company’s periodic reports in fulfilling their responsibilities to assure the accuracy and completeness of the Company’s periodic reports.
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B.
|
The CEO, the CFO and each senior financial manager shall promptly bring to the attention of the Audit Committee any information he or she may have concerning:
|
a)
|
significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data, or
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b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.
|
C.
|
The CEO, the CFO and each senior financial manager shall promptly report any information he or she may have concerning:
|
a)
|
any violation of this Code, including any actual or apparent conflicts of interest between personal and professional relationships, involving management, any director or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls, or
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b)
|
evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof.
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XXI.
|
DISTRIBUTION AND ACKNOWLEDGMENT OF RECEIPT
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XXII.
|
WAIVERS
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2010 of Forward Air Corporation;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 24, 2011
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/s/ Bruce A. Campbell
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||
Bruce A. Campbell
Chairman, President and Chief Executive Officer
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1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2010 of Forward Air Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 24, 2011
|
|||
/s/ Rodney L. Bell
|
|||
Rodney L. Bell
Chief Financial Officer, Senior Vice President and Treasurer
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1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 24, 2011
|
||
/s/ Bruce A. Campbell
|
||
Bruce A. Campbell
Chairman, President, and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 24, 2011
|
||
/s/ Rodney L. Bell
|
||
Rodney L. Bell
Chief Financial Officer, Senior Vice President and Treasurer
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