Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K 5.22.17 - FORWARD AIR CORP | form8-k52217.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.
Provide our customers with safe, superior service
Operate an asset-light model utilizing independent owner-operators
Expanding into new areas organically and through acquisitions
Leading technology lowers operating cost & improves customer service
Superior service & operating flexibility regardless of economic cycle
5
Revenue & Operating Income Mix
*Adjusted to exclude impairment charge
LTL
57%TLS
17%
Pool
15%
IM
11%
Revenue: LTM
LTL
78%
TLS*
7%
Pool
5% IM
10%
Op rating Income: LTM
6
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 LTM
Revenue $ 577 M
Operating Income $ 85 M
EBITDA $ 106 M
Lbs per Week 46.5 M
Shipments per Week 74.1 K
Lbs per Shipment 628 Lbs
Owner-Operators 965
Trailers 4,258
7
Expedited LTL Network
8
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
*Adjusted to exclude impairment charge
Truckload Premium Services LTM
Revenue $ 167 M
Operating Income* $ 7 M
EBITDA* $ 13 M
Total Miles 91.4 M
Qualified 3rd Party Carriers 4,460
Dedicated Owner-Operators 326
Company Tractors 83
Reefer Trailers 1,303
9
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 LTM
Revenue $ 107 M
Operating Income $ 11 M
EBITDA $ 15 M
Owner-Operators 380
Company Tractors 114
Chassis & Trailers 100
*Includes the addition of 6 terminals from the Atlantic acquisition
10
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 LTM
Revenue $ 153 M
Operating Income $ 5 M
EBITDA $ 11 M
Owner-Operators 226
Company Straight Trucks 218
Company Tractors 94
11
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
13
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
‒ Recently increased dividend by 25%
*Adjusted to exclude Towne integration & deal costs (2015)
†Adjusted to exclude CST acquisition costs (2014), Towne integration & deal costs (2015), technology related permanent tax deductions (2015), and TQI impairment charge (2016)
‡ROIC is calculated as Non Operating Profit After Tax (adjusted for the amortization of intangibles) divided by Operating Invested Capital
LTM 2016 2015
Gross Revenue
*
$ 1,000 M $ 983 M $ 959 M
Adjusted Operating Income
†
$ 104 M $ 102 M $ 106 M
Adjusted Operating Margin
†
10.4% 10.4% 11.1%
Adjusted EPS
†
$ 2.13 $ 2.08 $ 2.07
Adjusted EBITDA
†
$ 143 M $ 141 M $ 143 M
Adjusted EBITDA Margin† 14.3% 14.3% 14.9%
ROIC (w/o Goodwill & Intang.)‡ 24.9% 24.5% 25.6%
ROIC (w/Goodwill & Intang.)
‡
12.4% 12.2% 11.9%
Capital to Shareholders $ 56 M $ 56 M $ 35 M
Debt / Adjusted EBITDA
†
0.2 x 0.2 x 0.6 x
14
Revenue & Earnings History
Revenue
(CAGR = 13%)
EBITDA
(CAGR = 11%)
EPS
(CAGR = 11%)
*Adjusted to exclude CST acquisition costs (2014), Towne integration & deal costs (2015), technology related permanent tax deductions (2015), and impairment charge (2016)
$484
$536
$584
$653
$781
$959
$983
$1,000
$0
$200
$400
$600
$800
$1,000
$1,200
10 11 12 13 14 15 16 LTM
*
$74
$98
$105
$108
$128
$143
$141
$143
$0
$20
$40
$60
$80
$100
$120
$140
$160
0 1 2 13 14 15 16 LTM
*
* *
*
$1.10
$1.60
$1.78 $1.77
$1.98
$2.07 $2.08
$2.13
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
10 11 12 13 14 15 16 LTM
*
*
* *
15
Strong Cash Flow Generation
$14
$20 $20
$34
$38 $39
$40 $40
$54
$77
$69
$91 $92
$86
$130 $130
$0
$20
$40
$60
$80
$100
$120
$140
2010 2011 2012 2013 2014 2015 2016 LTM
($
in
mi
llio
ns
)
Net Capex Cash Flow From Operations
16
Value Proposition
Sustainable Revenue Growth
Flexible Asset-Light Model
Solid Capital Returns
Proven Operating Leverage
Strong Balance Sheet
Appendix
18
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 Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
GAAP Revenue 1,000.0 247.0 982.5 264.8 249.6 238.6 229.5 959.1 781.0
Towne Integration 0.0 - - - - - - 0.6 -
Non GAAP Revenue 1,000.0 247.0 982.5 264.8 249.6 238.6 229.5 958.5 781.0
GAAP Financials LTM Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
Operating Income 61.8 23.2 60.0 28.2 24.7 (14.3) 21.4 81.8 96.4
Operating Margin 6.2% 9.4% 6.1% 10.7% 9.9% -6.0% 9.3% 8.5% 12.3%
Net Interest & Other Expense (1.6) (0.3) (1.6) (0.2) (0.2) (0.6) (0.6) (2.1) (0.3)
Income Taxes 30.7 8.6 30.7 15.3 12.6 (4.8) 7.7 24.1 34.9
Net Income (Loss) 29.5 14.2 27.7 12.7 11.9 (10.1) 13.1 55.6 61.2
Fully Diluted Share Count 30,293 30,106 30,444 30,258 30,355 30,451 30,625 31,040 31,072
Two Class (0.5) (0.1) (0.5) (0.1) (0.1) (0.1) (0.1) (0.4) (0.4)
Fully Diluted EPS 0.94 0.47 0.90 0.42 0.39 (0.33) 0.43 1.78 1.96
Non GAAP Adjustments LTM Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
Operating Income (42.4) - (42.4) - - (42.4) - (24.3) (0.9)
Net Interest & Other Expense 0.0 - - - - - - (0.4) -
Income Taxes (6.4) - (6.4) 5.0 3.6 (15.0) - (15.7) (0.3)
Net Income (Loss) (36.0) - (36.0) (5.0) (3.6) (27.4) - (9.0) (0.6)
Fully Diluted Share Count 30,422 30,106 30,444 30,258 30,355 30,451 30,625 31,040 31,072
Fully Diluted EPS (1.18) - (1.18) (0.16) (0.12) (0.90) 0.00 (0.29) (0.02)
Non GAAP Financials LTM Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016 2015 2014
Operating Income 104.2 23.2 102.4 28.2 24.7 28.1 21.4 106.1 97.3
Operating Margin 10.4% 9.4% 10.4% 10.7% 9.9% 11.8% 9.3% 11.1% 12.5%
Net Interest & Other Expense (1.6) (0.3) (1.6) (0.2) (0.2) (0.6) (0.6) (1.7) (0.3)
Income Taxes 37.2 8.6 37.1 10.3 9.0 10.2 7.7 39.8 35.2
Net Income (Loss) 65.4 14.2 63.7 17.7 15.5 17.3 13.1 64.6 61.8
Fully Diluted Share Count 30,422 30,106 30,444 30,258 30,355 30,451 30,625 31,040 31,072
Two class (0.5) (0.1) (0.5) (0.1) (0.1) (0.1) (0.1) (0.4) (0.4)
Fully Diluted EPS 2.13 0.47 2.08 0.58 0.51 0.57 0.43 2.07 1.98
Operating Income 104.2 23.2 102.4 28.2 24.7 28.1 21.4 106.1 97.3
(+) Depreciation & Amortization 38.6 10.0 38.2 9.8 9.4 9.3 9.7 37.1 31.1
EBITDA 142.8 33.2 140.6 38.0 34.1 37.4 31.1 143.2 128.4
EBITDA Margin 14.3% 13.5% 14.3% 14.4% 13.7% 15.7% 13.5% 14.9% 16.4%
19
Segment EBITDA Reconciliation
Non GAAP Adjustments include impairment charge
Expedited LTL LTM Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income 84.8 18.4 83.5 20.5 21.0 24.9 17.1
(+) Non GAAP Operating Income Adjustments - - - - - - -
(+) Depreciation & Amortization 21.5 5.1 21.9 5.6 5.5 5.3 5.5
= EBITDA 106.3 23.5 105.4 26.1 26.5 30.2 22.6
Truckload Premium Services LTM Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income (35.3) 1.7 (35.4) 1.3 2.0 (40.3) 1.6
(+) Non GAAP Operating Income Adjustments 42.4 - 42.4 - - 42.4 -
(+) Depreciation & Amortization 6.1 1.5 6.4 1.5 1.5 1.7 1.7
= EBITDA 13.3 3.2 13.5 2.8 3.5 3.9 3.3
Intermodal LTM Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income 11.2 2.6 11.0 2.8 3.0 2.8 2.4
(+) Non GAAP Operating Income Adjustments - - - - - - -
(+) Depreciation & Amortization 4.1 1.1 3.9 1.1 1.0 0.9 0.9
= EBITDA 15.3 3.7 14.8 3.9 4.0 3.6 3.3
Pool Distribution LTM Q1 2017 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2016
GAAP Operating Income 4.9 1.4 3.6 3.8 0.1 (0.4) 0.1
(+) Non GAAP Operating Income Adjustments - - - - - - -
(+) Depreciation & Amortization 6.2 1.8 6.0 1.5 1.5 1.5 1.5
= EBITDA 11.1 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