Attached files
| file | filename |
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| 8-K - FORM 8-K 2.13.18 - FORWARD AIR CORP | form8-k21318.htm |
NASDAQ:FWRD
www.ForwardAirCorp.com
Investor Presentation
Today’s presentation and discussion will contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,”
“anticipates,” “intends,” “estimates,” or similar expressions are intended to identify these
forward-looking statements. These statements, which include statements regarding our
competitive advantages, synergies, and scalable platform, and future technology
investments are based on Forward Air’s current plans and expectations and involve risks
and uncertainties that could cause future activities and results of operations to be
materially different from those set forth in the forward-looking statements. For further
information, please refer to Forward Air’s reports and filings with the Securities and
Exchange Commission.
To supplement the financial measures prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”), we have included the following non-
GAAP financial information in this presentation: adjusted EBITDA, adjusted EBITDA margin,
adjusted operating margin and adjusted EPS. The reconciliations of these non-GAAP
measures to the most directly comparable financial measures calculated and presented in
accordance with GAAP can be found in the Appendix to this presentation. Because these
non-GAAP financial measures exclude certain items as described herein, they may not be
indicative of the results that the Company expects to recognize for future periods. As a
result, these non-GAAP financial measures should be considered in addition to, and not a
substitute for, financial information prepared in accordance with GAAP.
2
Forward Looking Statements Disclosure
3
Asset-Light Freight & Logistics Company
EXPEDITED LTL
• Comprehensive national network
• Provides expedited regional, inter-regional
and national LTL services
• Offers local pick-up and delivery,
warehousing and other services
• Terminal network located at or near
airports in the US and Canada
TRUCKLOAD PREMIUM SERVICES
• Expedited Truckload brokerage
• Dedicated fleet services
• Maximum security and temperature-
controlled logistics services
• Long-haul, regional and local services
INTERMODAL
• High value intermodal container drayage
• Warehousing and other value-added
services
• Regional linehaul
• Growing footprint
POOL DISTRIBUTION
• Customized consolidation, final-mile
handling and distribution of time-sensitive
products
• DC bypass, flow through, direct to store
and reverse logistics services
• 28 terminal network
4
Key Attributes
Deliver premium solutions: expedited, time-definite, service-sensitive
Most comprehensive provider of wholesale transportation services in North
America, serving Freight Forwarders, Airlines, 3PLs, etc.
Operate an asset-light model utilizing independent owner-operators
Provide our customers with safe, superior service
Expanding into new areas organically and through acquisitions
Leading technology lowers operating cost & improves customer service
Superior service & operating flexibility regardless of economic cycle
0
200
400
600
800
1,000
1,200
2010 2011 2012 2013 2014 2015* 2016 2017
$
m
ill
io
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s
(
n
o
n
-GA
A
P
)
Consolidated Revenue
5
Revenue Growth
12% annual revenue growth since 2010
Organic as well as acquisitive growth
Expanded existing services and introduced new offerings (e.g., Intermodal)
*Adjusted to exclude Towne integration & deal costs (2015)
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015* 2016* 2017
$
m
ill
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s
(n
o
n
-GA
A
P
)
Consolidated Operating Income
6
Operating Income Growth
11% annual EBIT growth since 2010
Organic as well as acquisitive growth
Expedited LTL key contributor; Intermodal growing rapidly
*Adjusted to exclude Towne integration & deal costs (2015), technology related permanent tax deductions (2015), and TQI impairment charge (2016)
7
Addressable Market
Business Unit
2017
Revenue
TAM
TAM Comments
Expedited LTL 620 3,500 $1,500 traditional airport-to-airport + $2,000 3PL
Truckload Premium Services 179 3,000 $1,500 expedited + $1,500 medical+refrigerated
Intermodal 149 7,000 Midwest + SE region
Pool Distribution 164 4,000 $1,500 retail + $2,500 other verticals
Intercompany Eliminations (11)
Total 1,101 17,500 6% of estimated total addressable market
($ millions)
Currently serve 6% of total addressable market
Significant opportunity for future growth
Source: Studies performed by Tompkins International and SJ Consulting
8
Revenue & Operating Income Mix
LTL
56%
TLS
16%
Pool
15%
IM
13%
Revenue: 2017
LTL
79%
TLS
4%
Pool
6%
IM
11%
Operating Income: 2017
9
Expedited LTL
Highlights
• Nationwide time-definite service, serving 8,100 lane segments and 90 cities each
business day
• Pick-up and delivery by zip code and/or zone covering 96% of continental US zip codes
• Offer a variety of freight management services (warehousing, dedicated final mile, etc.)
Expedited LTL 2017
Revenue $ 620 M
Operating Income $ 88 M
EBITDA $ 108 M
Lbs per Week 49.5 M
Shipments per Week 79.5 K
Lbs per Shipment 623 Lbs
Owner-Operators 945
Trailers 4,008
10
Expedited LTL Network
11
Truckload Premium Services
Highlights
• High level of service allows for premium rate per mile
• Competitive advantage having dedicated owner-operator capacity
• Quality third party transportation providers allow for flexible capacity
• Beneficial synergies through cross-utilization with Expedited LTL fleet
Truckload Premium Services 2017
Revenue $ 179 M
Operating Income $ 4 M
EBITDA $ 10 M
Total Miles 96.6 M
Qualified 3rd arty Carriers 4,848
Dedicated Owner-Operators 293
Company Tractors 82
Trailers 1,427
12
Intermodal
Highlights
• Branded as CST (Central States Trucking)
• 20 terminals serving Midwest, Southeast and Southwest regions
• Service partnership with 20 of the top 100 importers
• Scalable platform for future growth
Intermodal 2017
Revenue $ 149 M
Operating Income $ 13 M
EBITDA $ 19 M
Owner-Operators 621
Company Tractors 141
Chassis & Trailers 263
13
Intermodal Network
14
Pool Distribution
Highlights
• Branded as Forward Air Solutions
• Terminal and service locations in 28 states
• Leverages core competencies of Expedited LTL business
• Current customer base is primarily specialty retail; pursuing customers in other verticals
Pool Distribution 2017
Revenue $ 164 M
Operating Income $ 6 M
EBITDA $ 13 M
Owner-Operators 236
Company Straight Trucks 225
Company Tractors 102
15
Pool Distribution Network
16
Technology
• Advanced technology is a cornerstone of every Forward Air business operation
• Our technology priorities include:
‒ End-to-end customer visibility to every shipment we handle in every
business unit
‒ Secure real-time transactions with customers and service providers using
APIs and EDI
‒ Web-based technologies and mobile applications for customers, drivers
and service providers
• Forward Air is committed to making long-term, on-going investments in
technology to provide high level service and security
Financial Overview
18
Financial Overview
• Goal to deliver superior returns to shareholders through profitable organic
growth and disciplined acquisitions
• Commitment to return capital to shareholders through dividends and share
repurchases
*Adjusted to exclude Towne integration & deal costs (2015)
†Adjusted to exclude Towne integration & deal costs (2015), technology related permanent tax deductions (2015), and TQI impairment charge (2016)
‡Reported EPS of $2.89 less $0.53 impact from Tax Cut and Jobs Act (2017)
ꬹROIC is calculated as Non Operating Profit After Tax (adjusted for the amortization of intangibles) divided by Operating Invested Capital
2017 2016 2015
Gross Revenue
*
$ 1,101 M $ 983 M $ 959 M
Adjusted Operating Income
†
$ 109 M $ 102 M $ 106 M
Adjusted Operating Margin
†
9.9% 10.4% 11.1%
Adjusted EPS
‡
$ 2.36 $ 2.08 $ 2.07
Adjusted EBITDA† $ 150 M $ 141 M $ 143 M
Adjusted EBITDA Margin† 13.6% 14.3% 14.9%
Capital to Shareholders $ 67 M $ 56 M $ 35 M
Debt / Adjusted EBITDA
†
0.3 x 0.2 x 0.6 x
ROIC (w/o Goodwill & Intang.)
ꬹ
26.2% 24.5% 25.6%
ROIC (w/Goodwill & Intang.)ꬹ 13.4% 12.2% 11.9%
19
Revenue & Earnings History
Revenue
(CAGR = 12%)
EBITDA
(CAGR = 11%)
EPS
(CAGR = 12%)
*Adjusted to exclude CST acquisition costs (2014), Towne integration & deal costs (2015), technology related permanent tax deductions (2015), and impairment charge (2016)
‡Reported EPS of $2.89 less $0.53 impact from Tax Cut and Jobs Act (2017)
$484
$536
$584
$653
$781
$959
$983
$1,101
$0
$200
$400
$600
$800
$1,000
$1,200
10 11 12 13 14 15 16 17
*
$74
$98
$105
$108
$128
$143
$141
$151
$0
$20
$40
$60
$80
$100
$120
$140
$160
0 1 2 3 4 15 16 17
*
*
*
$1.10
$1.60
$1.78 $1.77
$1.98
$2.07 $2.08
$2.36
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
10 11 12 13 14 15 16 17
*
*
*
‡
20
Strong Cash Flow Generation
$14
$20 $20
$34
$38 $39
$40
$36
$54
$77
$69
$91 $92
$86
$130
$103
$0
$20
$40
$60
$80
$100
$120
$140
2010 2011 2012 2013 2014 2015 2016 2017
($
in
mi
llio
ns
)
Net Capex Cash Flow From Operations
21
Value Proposition
Sustainable Revenue Growth
Flexible Asset-Light Model
Solid Capital Returns
Proven Operating Leverage
Strong Balance Sheet
Appendix
23
GAAP vs. Non GAAP Reconciliation
Non GAAP Adjustments include CST acquisition costs (2014), Towne integration & deal costs (2015), technology related permanent tax deductions (2015), and impairment charge (2016)
GAAP Revenue Reconciliation LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
GAAP Revenue 1,100.8 1,100.8 306.1 280.2 267.5 247.0 982.5 264.8 249.6 238.6 229.5 959.1 781.0
Towne Integration - - - - - - - - - - - 0.6 -
Non GAAP Revenue 1,100.8 1,100.8 306.1 280.2 267.5 247.0 982.5 264.8 249.6 238.6 229.5 958.5 781.0
GAAP Financials LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
Operating Income 108.7 108.7 28.8 26.9 29.8 23.2 60.0 28.2 24.7 (14.3) 21.4 81.8 96.4
Operating Margin 9.9% 9.9% 9.4% 9.6% 11.1% 9.4% 6.1% 10.7% 9.9% -6.0% 9.3% 8.5% 12.3%
Net Interest & Other Expense (1.2) (1.2) (0.4) (0.3) (0.2) (0.3) (1.6) (0.2) (0.2) (0.6) (0.6) (2.1) (0.3)
Income Taxes 20.1 20.1 (7.0) 8.5 10.0 8.6 30.7 15.3 12.6 (4.8) 7.7 24.1 34.9
Net Income (Loss) 87.3 87.3 35.4 18.2 19.6 14.2 27.7 12.7 11.9 (10.1) 13.1 55.6 61.2
Fully Diluted Share Count 29,949 29,949 29,635 29,940 30,114 30,106 30,444 30,258 30,355 30,451 30,625 31,040 31,072
Two Class (0.7) (0.7) (0.3) (0.2) (0.2) (0.1) (0.5) (0.1) (0.1) (0.1) (0.1) (0.4) (0.4)
Fully Diluted EPS 2.89 2.89 1.18 0.60 0.64 0.47 0.90 0.42 0.39 (0.33) 0.43 1.78 1.96
Non GAAP Adjustments LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
Operating Income - - - - - - (42.4) - - (42.4) - (24.3) (0.9)
Net Interest & Other Expense - - - - - - - - - - - (0.4) -
Income Taxes - - - - - - (6.4) 5.0 3.6 (15.0) - (15.7) (0.3)
Net Income (Loss) - - - - - - (36.0) (5.0) (3.6) (27.4) - (9.0) (0.6)
Fully Diluted Share Count 29,949 29,949 29,635 29,940 30,114 30,106 30,444 30,258 30,355 30,451 30,625 31,040 31,072
Fully Diluted EPS - - - - - - (1.18) (0.16) (0.12) (0.90) 0.00 (0.29) (0.02)
Non GAAP Financials LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
Operating Income 108.7 108.7 28.8 26.9 29.8 23.2 102.4 28.2 24.7 28.1 21.4 106.1 97.3
Operating Margin 9.9% 9.9% 9.4% 9.6% 11.1% 9.4% 10.4% 10.7% 9.9% 11.8% 9.3% 11.1% 12.5%
Net Interest & Other Expense (1.2) (1.2) (0.4) (0.3) (0.2) (0.3) (1.6) (0.2) (0.2) (0.6) (0.6) (1.7) (0.3)
Income Taxes 20.1 20.1 (7.0) 8.5 10.0 8.6 37.1 10.3 9.0 10.2 7.7 39.8 35.2
Net Income (Loss) 87.3 87.3 35.4 18.2 19.6 14.2 63.7 17.7 15.5 17.3 13.1 64.6 61.8
Fully Diluted Share Count 29,949 29,949 29,635 29,940 30,114 30,106 30,444 30,258 30,355 30,451 30,625 31,040 31,072
Two class (0.7) (0.7) (0.3) (0.2) (0.2) (0.1) (0.5) (0.1) (0.1) (0.1) (0.1) (0.4) (0.4)
Fully Diluted EPS 2.89 2.89 1.18 0.60 0.64 0.47 2.08 0.58 0.51 0.57 0.43 2.07 1.98
Operating Income 108.7 108.7 28.8 26.9 29.8 23.2 102.4 28.2 24.7 28.1 21.4 106.1 97.3
(+) Depreciation & Amortization 41.1 41.1 10.5 10.3 10.2 10.0 38.2 9.8 9.4 9.3 9.7 37.1 31.1
EBITDA 149.7 149.7 39.3 37.2 40.0 33.2 140.6 38.0 34.1 37.4 31.1 143.2 128.4
EBITDA Margin 13.6% 13.6% 12.8% 13.3% 15.0% 13.5% 14.3% 14.4% 13.7% 15.7% 13.5% 14.9% 16.4%
24
Segment EBITDA Reconciliation
Non GAAP Adjustments include impairment charge
Expedited LTL LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income 88.1 88.1 23.5 23.2 23.0 18.4 83.5 20.5 21.0 24.9 17.1
(+) Non GAAP Operating Income Adjustments - - - - - - - - - - -
(+) Depreciation & Amortization 20.2 20.2 5.1 5.0 5.0 5.1 21.9 5.6 5.5 5.3 5.5
= EBITDA 108.4 108.4 28.7 28.2 28.0 23.5 105.4 26.1 26.5 30.2 22.6
Truckload Premium Services LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income 4.2 4.2 (0.5) 1.1 1.9 1.7 (35.4) 1.3 2.0 (40.3) 1.6
(+) Non GAAP Operating Income Adjustments 0.0 - - - - - 42.4 - - 42.4 -
(+) Depreciation & Amortization 5.9 5.9 1.5 1.4 1.5 1.5 6.4 1.5 1.5 1.7 1.7
= EBITDA 10.2 10.2 1.1 2.6 3.3 3.2 13.5 2.8 3.5 3.9 3.3
Intermodal LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income 12.7 12.7 3.5 3.5 3.1 2.6 11.0 2.8 3.0 2.8 2.4
(+) Non GAAP Operating Income Adjustments - - - - - - - - - - -
(+) Depreciation & Amortization 5.8 5.8 1.6 1.7 1.5 1.1 3.9 1.1 1.0 0.9 0.9
= EBITDA 18.5 18.5 5.1 5.2 4.6 3.7 14.8 3.9 4.0 3.6 3.3
Pool Distribution LTM 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income 6.4 6.4 2.7 0.7 1.6 1.4 3.6 3.8 0.1 (0.4) 0.1
(+) Non GAAP Operating Income Adjustments - - - - - - - - - - -
(+) Depreciation & Amortization 6.6 6.6 1.6 1.6 1.6 1.8 6.0 1.5 1.5 1.5 1.5
= EBITDA 12.9 12.9 4.3 2.3 3.2 3.1 9.6 5.4 1.5 1.1 1.6
Thank You For Your Time
Investor Relations Contact:
Mike Morris, CFO & Treasurer
mmorris@forwardair.com
(404) 362-8933