Forward Air announces acquisition, unit divestiture with 4Q earnings

While the earnings report did not break out full-year earnings for Pool Distribution since it is now considered a discontinued business, the company said in its 10-K filing for 2019 that Pool Distribution accounted for 15% of Forward Air’s consolidated revenue that year. 

In the latest earnings report, the company took a charge of 72 cents per share under discontinued operations, which it said included the impact of a $21.2 million after-tax noncash charge for the fair value of Pool Distribution.

The acquisition announced by the company is Proficient Transportation. The cost of the acquisition is approximately $15 million. 

Forward Air said in its statement that it expects Proficient to “strengthen our intermodal footprint in key Midwest and Southern markets.” It is projected to add $23 million in revenue and $3 million in earnings before interest, taxes, depreciation and amortization (EBITDA). According to Proficient’s website, the company has intermodal facilities in Chicago, Columbus, Ohio, and Dallas. 

Earlier announced acquisitions of CLW Deliver and Value Logistics both closed in the fourth quarter, Forward Air said.

In other highlights from the earnings report:

• In line with strong numbers posted by other LTL carriers for January operations, Forward Air said its LTL tonnage was up 10.9% year-on-year and shipments were up 14.4%. The trend there is higher still, with a 6% general rate increase that went into effect February 1. “Volumes in our other modes have started the year strong,” Forward Air said in its statement.

• Revenue per hundredweight, the measurement for yield at LTL carriers, was down 1.37% if fuel is included. It declined to $26.65 from $27.02. But yield excluding fuel rose 2.24%, to $23.23 from $22.72. 

• Earnings per share came in where the company had projected them to in a statement earlier this month.  Net income per diluted share was 55 cents per share, down from 79 cents per share a year ago. The Forward Air estimate was 53 cents to 55 cents, which it reduced from 71 cents to 75 cents per share as a result of the financial impact from its cyberattack.

• Revenue of $350.3 million was a quarterly record. It was up $30.68 million from last year, a jump of 9.6%. EBITDA dropped $9.4 million to $29.9 million, a drop of 23.9% from a year ago. 

• The breakdown in revenue was just under $300 million for its Expedited Freight division, up from $265.87 million. Intermodal declined to $51.76 million from $54.7 million.

• Forward Air, like many other LTL companies in the fourth quarter, saw a relatively sharp increase in purchased transportation. It rose to $189.9 million from $159.8 million. Sales and compensation were kept in check, rising to $70.5 million from $65.5 million during a time of driver pay increases in many parts of the transportation sector.

Forward Air’s earnings call with analysts is scheduled for Friday morning.

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