UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 000-22490 FORWARD AIR CORPORATION (Exact name of Registrant as specified in its charter) Tennessee 62-1120025 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1915 Snapps Ferry Road Building N Greeneville TN 37745 (Address of principal executiv ...

Forward Air Corp (NASDAQ:FWRD) Q4 2019 Earnings Conference Call February 7, 2020 9:00 AM ET Company Participants Thomas Schmitt - Chairman, President & CEO Michael Morris - CFO, SVP & Treasurer Conference Call Participants Todd Fowler - KeyBanc Capital Markets Jack Atkins - Stephens Inc. Benjamin Hartford - Robert W. Baird & Co. Operator Thank you for joining Forward Air Corporation's Fourth Quarter 2019 Earnings Release Conference. Before we begin, I'd like to point out that both the press release and the ...

When it's bigger than a box and it really matters, "Think Forward" Investor Presentation November 2019 NASDAQ:FWRD www.ForwardAirCorp.com Forward Looking Statements Disclosure 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 statem ...

Financial Data and Key Metrics Changes - The company reported a 9% year-over-year revenue growth for Q3 2019, with a 10% growth in operating income when excluding reserve impacts [10][26] - Purchase transportation accounted for 45.5% of LTL revenue, with a 160 basis point dilution from the FSA acquisition [26] Business Line Data and Key Metrics Changes - The core LTL business saw a significant shift, with 40% of network revenue now coming from door-to-door services [11] - The 3PL segment experienced a 75% year-over-year growth, with the rate per shipment increasing by 60% [13] - Final mile business added $10 million in run rate new business, with a growing pipeline [15] Market Data and Key Metrics Changes - Tonnage per day for Q3 was down 5.1%, with a slight improvement to down 1.9% in October [34][38] - The company is experiencing pricing discipline while winning back business, indicating a positive trend in market positioning [40] Company Strategy and Development Direction - The company aims for double-digit annual revenue growth and margins, focusing on organic growth in LTL and targeted M&A in intermodal and final mile [7][8] - There is an ongoing evaluation of synergies between LTL and truckload operations to drive organic growth and lower costs [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Q4 and 2020, highlighting the importance of operational efficiencies and strategic initiatives [67] - The potential impact of macroeconomic headwinds was acknowledged, but management remains focused on winning back business and expanding into new segments [61][62] Other Important Information - The company is committed to social responsibility initiatives, including support for military veterans and anti-trafficking efforts [21][22] - A shift in capital expenditures towards technology and IT is planned for 2020, with a focus on enhancing customer experiences and operational efficiencies [80][81] Q&A Session Summary Question: Monthly tonnage trends and fourth quarter revenue guidance - Tonnage per day was down 5.1% in Q3, with a slight improvement in October to down 1.9% [34][38] Question: Impact of accident costs on segments - The initial impact was felt in the LTL business, with subsequent effects in corporate [41][42] Question: Synergies between truckload and LTL - Positive effects from combined operations are expected, but the exact impact on segment results is hard to predict [46][50] Question: Revenue per 100-weight outlook for 2020 - Revenue per 100-weight is expected to remain positive despite industry pressures [68][69] Question: Pool business growth and expectations for 2020 - Continued growth and pricing discipline are anticipated in the pool business, with strong financial outcomes expected [76][77] Question: 2020 CapEx expectations - CapEx is expected to be around $30 million to $35 million, with a shift towards technology investments [80][81]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q3 2019 financial statements show total assets at $980.6 million, operating revenue at $1.03 billion, and net income at $62.9 million, reflecting growth and new accounting impacts Condensed Consolidated Balance Sheets (Unaudited) | | September 30, 2019 (in thousands) | December 31, 2018 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $215,711 | $201,082 | | Total property and equipment, net | $220,843 | $209,895 | | Operating lease right-of-use assets | $158,977 | — | | Total goodwill and other acquired intangibles, net | $350,461 | $312,753 | | **Total assets** | **$980,633** | **$760,215** | | **Liabilities and Shareholders' Equity** | | | | Total current liabilities | $139,775 | $74,723 | | Debt and finance lease obligations, less current portion | $72,738 | $47,335 | | Operating lease obligations, less current portion | $112,553 | — | | Total shareholders' equity | $561,145 | $553,244 | | **Total liabilities and shareholders' equity** | **$980,633** | **$760,215** | Condensed Consolidated Statements of Comprehensive Income (Unaudited, in millions) | | Three months ended Sep 30, 2019 | Three months ended Sep 30, 2018 | Nine months ended Sep 30, 2019 | Nine months ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Operating revenue | $361,663 | $331,375 | $1,028,891 | $964,325 | | Income from operations | $30,689 | $29,879 | $85,973 | $86,984 | | Net income | $22,195 | $22,329 | $62,932 | $64,366 | | Diluted EPS | $0.78 | $0.76 | $2.19 | $2.18 | Condensed Consolidated Statements of Cash Flows (Unaudited, in millions) | | Nine months ended Sep 30, 2019 | Nine months ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $117,731 | $113,845 | | Net cash used in investing activities | ($64,001) | ($32,448) | | Net cash used in financing activities | ($44,563) | ($56,379) | | Net increase in cash | $9,167 | $25,018 | | Cash at end of period | $34,824 | $28,911 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail four segments, the adoption of new lease accounting standards, two strategic acquisitions, a change in depreciation estimates, and ongoing share repurchases - The company operates in **four reportable segments**: Expedited LTL, Intermodal, Truckload Premium Services (TLS), and Pool Distribution[22](index=22&type=chunk) - Adopted new lease standard ASU 2016-02 on January 1, 2019, recording right-of-use lease assets of **$158,977 thousand** and lease liabilities of **$159,690 thousand** as of September 30, 2019[29](index=29&type=chunk)[76](index=76&type=chunk) - In April 2019, acquired FSA Logistix for **$27.0 million** plus a potential earnout to expand final mile operations in the Expedited LTL segment[34](index=34&type=chunk)[38](index=38&type=chunk) - In July 2019, acquired O.S.T. Logistics for **$12.0 million** to expand the Intermodal segment's East Coast footprint[34](index=34&type=chunk)[38](index=38&type=chunk) - A study on asset useful lives led to extending the average life of trailers from 7 to 10 years and tractors from 5 to 10 years, effective July 1, 2019, which reduced depreciation by **$1.0 million** for the three and nine months ended September 30, 2019[50](index=50&type=chunk) - On February 5, 2019, a new stock repurchase plan was approved authorizing up to **5 million shares**, with **789,000 shares** repurchased for **$47.9 million** in the first nine months of 2019[98](index=98&type=chunk)[100](index=100&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights Q3 2019 revenue growth to $361.7 million, driven by acquisitions, alongside increased operating expenses and a slight decline in nine-month operating income [Results from Operations - Three Months Ended September 30, 2019](index=33&type=section&id=Results%20from%20Operations%20-%20Three%20Months%20Ended%20September%2030%2C%202019) Q3 2019 operating revenue increased 9.1% to $361.7 million, driven by acquisitions, while expenses rose 9.8%, resulting in a modest 2.7% increase in operating income Consolidated Results - Three Months Ended September 30 (in millions) | (in millions) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Operating revenue | $361.7 | $331.4 | 9.1% | | Total operating expenses | $331.0 | $301.5 | 9.8% | | Income from operations | $30.7 | $29.9 | 2.7% | | Net income | $22.2 | $22.3 | (0.4)% | - Revenue growth was driven by the Expedited LTL segment, which increased by **$21.6 million**, mainly from the final mile revenue of the acquired FSA business[133](index=133&type=chunk) - Operating expenses increased by **$29.5 million**, with salaries, wages, and benefits rising by **$11.3 million** and purchased transportation by **$8.1 million**[134](index=134&type=chunk) [Segment Analysis - Three Months Ended September 30, 2019](index=36&type=section&id=Segment%20Analysis%20-%20Three%20Months%20Ended%20September%2030%2C%202019) Q3 2019 segment analysis shows Expedited LTL and Pool Distribution growth, Intermodal margin pressure, and a significant decline in Truckload Premium Services operating income Segment Income from Operations - Q3 2019 vs Q3 2018 (in millions) | Segment | Q3 2019 | Q3 2018 | % Change | | :--- | :--- | :--- | :--- | | Expedited LTL | $25.9 | $23.7 | 9.3% | | Intermodal | $6.9 | $7.3 | (5.5)% | | Truckload Premium Services | $0.6 | $1.7 | (64.7)% | | Pool Distribution | $1.9 | $0.7 | 171.4% | - Expedited LTL's revenue increase was primarily due to a **$21.7 million** rise in final mile revenue from the FSA acquisition, though tonnage from traditional linehaul decreased by **3.6%**[144](index=144&type=chunk) - Intermodal's operating income margin deteriorated from **14.5% to 11.8%** due to losing leverage on fixed costs and a decrease in high-margin storage revenue[163](index=163&type=chunk) - TLS revenue per mile decreased by **6.8%** due to rate pressures from both spot and contract markets, leading to a significant drop in operating income[166](index=166&type=chunk)[167](index=167&type=chunk) [Results from Operations - Nine Months Ended September 30, 2019](index=49&type=section&id=Results%20from%20Operations%20-%20Nine%20Months%20Ended%20September%2030%2C%202019) Nine-month 2019 consolidated revenue grew 6.7% to $1.03 billion, but operating expenses increased faster, leading to a 1.1% decline in operating income to $86.0 million Consolidated Results - Nine Months Ended September 30 (in millions) | (in millions) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Operating revenue | $1,028.9 | $964.3 | 6.7% | | Total operating expenses | $942.9 | $877.3 | 7.5% | | Income from operations | $86.0 | $87.0 | (1.1)% | | Net income | $62.9 | $64.4 | (2.3)% | - Revenue growth was led by a **$43.0 million** increase in the Expedited LTL segment, mainly from the FSA acquisition[191](index=191&type=chunk) - Operating income decreased by **$1.0 million**, driven by increased insurance reserves and a decline in the TLS segment, which offset gains in other segments[194](index=194&type=chunk) [Segment Analysis - Nine Months Ended September 30, 2019](index=51&type=section&id=Segment%20Analysis%20-%20Nine%20Months%20Ended%20September%2030%2C%202019) Nine-month segment analysis shows Expedited LTL and Intermodal growth, continued decline in Truckload Premium Services, and increased losses in Other Operations due to higher reserves Segment Income from Operations - Nine Months Ended Sep 30 (in millions) | Segment | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Expedited LTL | $72.4 | $71.0 | 2.0% | | Intermodal | $18.3 | $16.3 | 12.3% | | Truckload Premium Services | $2.1 | $3.4 | (38.2)% | | Pool Distribution | $4.7 | $3.7 | 27.0% | | Other operations | ($11.5) | ($7.4) | 55.4% | - Expedited LTL's operating margin compressed from **12.9% to 12.2%** due to lower linehaul tonnage and costs associated with the FSA acquisition and integration[209](index=209&type=chunk) - Intermodal's operating income increased due to revenue rate increases and contributions from the Southwest and MMT acquisitions[221](index=221&type=chunk) - The operating loss in 'Other Operations' widened significantly to **$11.5 million**, primarily due to **$6.5 million** in vehicular reserves for unfavorable claim development and **$2.9 million** in CEO transition costs[249](index=249&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity analysis shows $117.7 million cash from operations, increased investing activities due to acquisitions, and reduced financing outflows, with $68.5 million available credit capacity - Net cash from operating activities increased by **$3.9 million** YoY to **$117.7 million** for the first nine months of 2019[254](index=254&type=chunk) - Investing activities included **$39.0 million** for the acquisitions of FSA and OST, and **$25.0 million** in net capital expenditures[255](index=255&type=chunk) - Financing activities included **$20.0 million** in proceeds from the senior credit facility, **$47.9 million** in share repurchases, and **$15.4 million** in dividend payments[15](index=15&type=chunk)[257](index=257&type=chunk) - As of September 30, 2019, the company had **$67.5 million** in borrowings outstanding under its revolving credit facility and **$68.5 million** of available capacity[67](index=67&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no significant or material changes in market risk exposure related to outstanding debt since its 2018 Form 10-K - Exposure to market risk from outstanding debt is not significant and has not changed materially since the 2018 Form 10-K[262](index=262&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2019, with internal control changes implemented for the new lease accounting standard - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[263](index=263&type=chunk) - Changes to internal controls were implemented to meet the reporting and disclosure requirements of the new lease accounting standard, ASU 2016-02[264](index=264&type=chunk) [Part II. Other Information](index=67&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation incidental to its business, with no expected material adverse effect on financial condition or operations - The company is party to routine litigation incidental to its business, which is not expected to have a material adverse effect[265](index=265&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) No material changes in the nature of risk factors have occurred since the 2018 Annual Report on Form 10-K - There have been no changes in the nature of risk factors since the 2018 Annual Report on Form 10-K[266](index=266&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2019, the company repurchased 152,250 shares at an average price of $61.01, with 4,278,556 shares remaining under the current authorization Issuer Purchases of Equity Securities (Q3 2019) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2019 | 54,918 | $59.54 | | August 2019 | 51,332 | $60.56 | | September 2019 | 46,000 | $63.28 | | **Total** | **152,250** | **$61.01** | - As of September 30, 2019, **4,278,556 shares** were available for repurchase under the plan authorized in February 2019[268](index=268&type=chunk)[269](index=269&type=chunk) [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including corporate documents, CEO/CFO certifications, and Interactive Data Files (XBRL) - Lists filed exhibits, including CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL data files[275](index=275&type=chunk)

Forward Air Corporation (NASDAQ:FWRD) Q2 2019 Results Conference Call July 26, 2019 10:00 AM ET Company Participants Tom Schmitt - CEO Mike Morris - CFO Conference Call Participants Wayne Thomas - Stephens Scott Group - Wolfe Research Todd Fowler - KeyBanc Seldon Clarke - Deutsche Bank Kevin Sterling - Seaport Global Securities Bruce Chan - Stifel Operator Ladies and gentlemen, thank you for joining Forward Air Corporation's Second Quarter 2019 Earnings Release Conference Call. Before we begin, I'd like to ...

Part I. Financial Information [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) For H1 2019, revenues increased to $667.2 million, assets grew to $936.6 million primarily due to new lease accounting, while net income slightly decreased [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $936.6 million, driven by $149.5 million in lease assets, with liabilities rising to $426.5 million due to lease obligations Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 | December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$936,557** | **$760,215** | **+$176,342** | | Cash and cash equivalents | $14,777 | $25,657 | -$10,880 | | Operating lease right-of-use assets | $149,544 | $— | +$149,544 | | Goodwill and other acquired intangibles, net | $344,855 | $312,753 | +$32,102 | | **Total Liabilities** | **$386,515** | **$206,971** | **+$179,544** | | Operating lease obligations (Current & Long-term) | $150,122 | $— | +$150,122 | | Debt and finance lease obligations | $57,508 | $47,644 | +$9,864 | | **Total Shareholders' Equity** | **$550,042** | **$553,244** | **-$3,202** | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q2 2019 operating revenue grew 4.7% to $345.8 million, but income from operations declined 7.0% to $30.6 million, leading to an 8.2% drop in net income Q2 and YTD Financial Performance (in thousands, except per share data) | Metric | Q2 2019 | Q2 2018 | % Change | YTD 2019 | YTD 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | $345,756 | $330,343 | 4.7% | $667,227 | $632,951 | 5.4% | | Income from Operations | $30,550 | $32,870 | -7.0% | $55,284 | $57,105 | -3.2% | | Net Income | $22,330 | $24,298 | -8.2% | $40,737 | $42,038 | -3.1% | | Diluted EPS | $0.78 | $0.82 | -4.9% | $1.41 | $1.42 | -0.7% | | Dividends per share | $0.18 | $0.15 | 20.0% | $0.36 | $0.30 | 20.0% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to $71.8 million, while investing activities used $42.3 million due to acquisitions, and financing used $40.3 million for repurchases and dividends Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $71,764 | $66,990 | | Net cash used in investing activities | ($42,326) | ($13,114) | | *Acquisition of business, net of cash* | *($27,000)* | *$-* | | Net cash used in financing activities | ($40,318) | ($37,667) | | *Repurchase of common stock* | *($38,617)* | *($28,165)* | | **Net (decrease) increase in cash** | **($10,880)** | **$16,209** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include the FSA Logistix acquisition, adoption of new lease accounting (ASU 2016-02), a new share repurchase program, and a $5 million vehicular claims reserve - The company operates in four reportable segments: Expedited LTL, Intermodal, Truckload Premium Services (TLS), and Pool Distribution[23](index=23&type=chunk) - In April 2019, the company acquired FSA Logistix for **$27 million** in cash plus a potential earnout of up to **$15 million**, expanding final mile pickup and delivery operations within the Expedited LTL segment[35](index=35&type=chunk) - On January 1, 2019, the company adopted the new lease standard ASU 2016-02, resulting in the recognition of right-of-use lease assets of **$149.5 million** and lease liabilities of **$150.1 million** as of June 30, 2019[30](index=30&type=chunk)[73](index=73&type=chunk) - In February 2019, the Board approved a new stock repurchase plan for up to **5 million shares**, with **637,000 shares** repurchased for **$38.6 million** during the first six months of 2019[89](index=89&type=chunk)[91](index=91&type=chunk) - During Q2 2019, the company recorded a **$5 million** reserve for pending vehicular claims[96](index=96&type=chunk) - Subsequent to the quarter's end, on July 14, 2019, the company acquired OST Logistics for **$12 million** to expand its Intermodal segment's footprint on the east coast[107](index=107&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 2019 revenue grew 4.7% driven by acquisitions, but operating income declined 7.0% due to increased expenses, including a $5.0 million vehicular claims reserve and CEO transition costs [Results from Operations - Three Months Ended June 30, 2019](index=29&type=section&id=Results%20from%20Operations%20-%20Three%20Months%20Ended%20June%2030,%202019) Q2 2019 consolidated revenue rose 4.7% to $345.7 million, but operating income fell 7.0% to $30.6 million, impacted by a $4.0 million vehicle claim reserve and CEO transition costs Q2 2019 Segment Performance (in millions) | Segment | Operating Revenue | % Change YoY | Income from Operations | % Change YoY | | :--- | :--- | :--- | :--- | :--- | | Expedited LTL | $205.7 | 6.6% | $26.9 | 1.5% | | Intermodal | $50.5 | 2.6% | $5.2 | -7.1% | | Truckload Premium Services | $46.1 | -5.7% | $0.7 | -58.8% | | Pool Distribution | $45.8 | 5.8% | $1.6 | 0.0% | | **Total** | **$345.7** | **4.7%** | **$30.6** | **-7.0%** | - Operating expenses increased by **$17.7 million**, driven by an **$8.2 million** increase in salaries (partly from acquisitions) and a **$3.1 million** increase in insurance and claims, which included a **$5.0 million** reserve for pending vehicular claims[123](index=123&type=chunk) - The operating loss from 'Other Operations' increased to **$3.8 million**, primarily due to a **$4.0 million** vehicle claim reserve and **$0.6 million** in costs related to the CEO transition[175](index=175&type=chunk) [Results from Operations - Six Months Ended June 30, 2019](index=42&type=section&id=Results%20from%20Operations%20-%20Six%20Months%20Ended%20June%2030,%202019) H1 2019 consolidated revenue grew 5.4% to $667.2 million, but operating income decreased 3.2% to $55.3 million, impacted by a $5.0 million vehicle claim reserve and CEO transition costs YTD 2019 Segment Performance (in millions) | Segment | Operating Revenue | % Change YoY | Income from Operations | % Change YoY | | :--- | :--- | :--- | :--- | :--- | | Expedited LTL | $384.3 | 5.9% | $46.5 | -1.7% | | Intermodal | $104.6 | 7.1% | $11.4 | 26.7% | | Truckload Premium Services | $91.8 | -3.4% | $1.5 | -11.8% | | Pool Distribution | $91.0 | 5.8% | $2.8 | -6.7% | | **Total** | **$667.2** | **5.4%** | **$55.3** | **-3.2%** | - The operating loss from 'Other Operations' widened to **$6.9 million** from **$3.9 million** in the prior year, driven by a **$4.0 million** vehicle claim reserve, **$1.6 million** in loss development factors, and **$1.3 million** in CEO transition costs[235](index=235&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) Cash from operations increased to $71.8 million, while major uses included $27.0 million for acquisitions, $38.6 million for share repurchases, and $10.3 million for dividends - Net cash from operating activities increased to **$71.8 million** for the first six months of 2019, compared to **$67.0 million** in 2018[240](index=240&type=chunk) - Investing activities used **$42.3 million**, primarily consisting of **$27.0 million** for the acquisition of FSA and **$15.3 million** in net capital expenditures[241](index=241&type=chunk) - Financing activities used **$40.3 million**, which included **$38.6 million** in share repurchases and **$10.3 million** in dividend payments, partially offset by **$10.0 million** in proceeds from the senior credit facility[242](index=242&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its exposure to market risk related to its outstanding debt is not significant and has not materially changed from the disclosures in its 2018 Form 10-K - Exposure to market risk from outstanding debt is not significant and has not changed materially since the 2018 Form 10-K[246](index=246&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with changes implemented for the new lease accounting standard (ASU 2016-02) - The CEO and CFO believe the company's disclosure controls and procedures are effective[248](index=248&type=chunk) - Changes to internal controls were implemented to meet the reporting and disclosure requirements of the new lease standard, ASU 2016-02[249](index=249&type=chunk) Part II. Other Information [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary, routine litigation incidental to its business, primarily related to personal injury, property damage, and workers' compensation claims - The company is party to ordinary, routine litigation which is not expected to have a material adverse effect on its business[250](index=250&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) There have been no changes in the nature of the company's risk factors since the filing of its 2018 Annual Report on Form 10-K - There have been no changes in the nature of risk factors since December 31, 2018[251](index=251&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2019, the company repurchased **406,894** shares at an average price of **$60.05** under a new **5.0 million** share authorization plan Q2 2019 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2019 | 53,284 | $65.73 | | May 2019 | 150,200 | $60.77 | | June 2019 | 203,410 | $58.04 | | **Total Q2** | **406,894** | **$60.05** | - On February 5, 2019, the Board approved a new share repurchase authorization for up to **5.0 million shares**[254](index=254&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and certifications by the CEO and CFO

Forward Air Corporation (NASDAQ:FWRD) Q1 2019 Results Earnings Conference Call April 25, 2019 9:00 AM ET Company Participants Thomas Schmitt - President and Chief Executive Officer Michael Morris - Senior Vice President, Chief Financial Officer and Treasurer Conference Call Participants Seldon Clarke - Deutsche Bank Jack Atkins - Stephens Todd Fowler - KeyBanc Capital Markets Benjamin Hartford - Baird Equity Research Bruce Chan - Stifel Scott Group - Wolfe Research Operator Thank you for joining Forward Air ...

Part I. Financial Information This part presents unaudited financial statements, management's discussion, and market risk disclosures [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of comprehensive income, and cash flows, along with detailed notes explaining the company's business, accounting policies, recent pronouncements, acquisitions, share-based payments, debt, income taxes, leases, financial instruments, shareholders' equity, commitments, contingencies, segment reporting, and subsequent events [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%93%20March%2031%2C%202019%20and%20December%2031%2C%202018) This section presents the company's financial position, highlighting changes in assets, liabilities, and equity, including the impact of new lease accounting standards Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :----------------------------------- | :------------- | :---------------- | | Total assets | $885,577 | $760,215 | | Cash and cash equivalents | $42,165 | $25,657 | | Operating lease right-of-use assets | $133,361 | — | | Total current liabilities | $116,646 | $74,723 | | Operating lease obligations, current | $43,824 | — | | Total shareholders' equity | $553,437 | $553,244 | - Total assets increased to **$885,577 thousand** from **$760,215 thousand**, primarily due to the recognition of operating lease right-of-use assets[8](index=8&type=chunk) - Operating lease right-of-use assets and corresponding liabilities were recorded as of March 31, 2019, at **$133,361 thousand** and **$133,739 thousand**, respectively, following the adoption of ASU 2016-02[8](index=8&type=chunk)[21](index=21&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20-%20Three%20months%20ended%20March%2031%2C%202019%20and%202018) This section details the company's financial performance, including operating revenue, expenses, and net income for the period Condensed Consolidated Statements of Comprehensive Income Highlights (in thousands, except per share data) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | Change (%) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Operating revenue | $321,471 | $302,608 | 6.2% | | Total operating expenses | $296,737 | $278,373 | 6.6% | | Income from operations | $24,734 | $24,235 | 2.1% | | Net income and comprehensive income | $18,407 | $17,741 | 3.8% | | Basic net income per share | $0.64 | $0.60 | 6.7% | | Diluted net income per share | $0.64 | $0.60 | 6.7% | | Dividends per share | $0.18 | $0.15 | 20.0% | - Operating revenue increased by **6.2%** year-over-year, reaching **$321,471 thousand** for the three months ended March 31, 2019[10](index=10&type=chunk) - Net income and comprehensive income grew by **3.8%** to **$18,407 thousand**, while diluted EPS increased by **6.7%** to **$0.64**[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20Three%20months%20ended%20March%2031%2C%202019%20and%202018) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $41,526 | $40,813 | | Net cash used in investing activities | $(3,689) | $(5,668) | | Net cash used in financing activities | $(21,329) | $(26,303) | | Net increase in cash | $16,508 | $8,842 | | Cash at end of period | $42,165 | $12,735 | - Net cash provided by operating activities increased slightly to **$41,526 thousand** in Q1 2019 from **$40,813 thousand** in Q1 2018[13](index=13&type=chunk) - Net cash used in financing activities decreased by **$4,974 thousand**, primarily due to a reduction in common stock repurchases[13](index=13&type=chunk)[161](index=161&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%E2%80%93%20March%2031%2C%202019) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Description of Business and Basis of Presentation](index=7&type=section&id=1.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This section describes the company's business operations and the foundational principles used in preparing the financial statements - Forward Air Corporation operates as an asset-light freight and logistics company with four reportable segments: Expedited LTL, Intermodal, Truckload Premium Services (TLS), and Pool Distribution[15](index=15&type=chunk) - The Expedited LTL segment provides expedited regional, inter-regional, and national less-than-truckload (LTL) services, with terminals located at or near airports in the United States and Canada[16](index=16&type=chunk) [2. Recent Accounting Pronouncements](index=7&type=section&id=2.%20Recent%20Accounting%20Pronouncements) This section discusses the adoption and impact of new accounting standards on the company's financial reporting - The Company adopted ASU 2016-02, Leases, on **January 1, 2019**, using a modified retrospective approach[21](index=21&type=chunk) - Adoption resulted in recording right-of-use lease assets of **$133,361 thousand** and corresponding lease liabilities of **$133,739 thousand** as of March 31, 2019, with no impact on the Statements of Comprehensive Income or Cash Flows[21](index=21&type=chunk) [3. Revenue](index=8&type=section&id=3.%20Revenue) This section explains how the company generates and recognizes revenue from its transportation and logistics services - Revenue is generated from providing transportation and related services, such as terminal handling, storage, equipment rentals, and customs brokerage[23](index=23&type=chunk) - Performance obligations are typically short-term (less than a week), and revenue is recognized over time as customers simultaneously receive and consume the benefits of these services[23](index=23&type=chunk) [4. Acquisitions and Goodwill](index=8&type=section&id=4.%20Acquisitions%20and%20Goodwill) This section details the company's acquisition activities and the associated accounting for goodwill - In 2018, the Intermodal segment expanded through the acquisition of Multi-Modal Transport Inc. (MMT) for **$3,737 thousand** and Southwest Freight Distributors for **$16,250 thousand**, enhancing geographic footprint and customer relationships[25](index=25&type=chunk) - No goodwill impairment charges were identified during the three months ended March 31, 2019[27](index=27&type=chunk) Goodwill by Segment as of March 31, 2019 (in thousands) | Segment | Goodwill | | :------------------ | :------- | | Expedited LTL | $97,593 | | Intermodal | $76,615 | | TLS | $45,164 | | Pool Distribution | $12,359 | | **Total** | **$199,092** | [5. Share-Based Payments](index=10&type=section&id=5.%20Share-Based%20Payments) This section describes the company's share-based compensation plans and the related expense recognition - Share-based compensation includes stock options, non-vested shares, and performance shares, with expense recognized ratably over the vesting period[32](index=32&type=chunk) - Total share-based compensation expense for Q1 2019 was **$3,047 thousand**, an increase from **$2,261 thousand** in Q1 2018[13](index=13&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - Performance shares granted in Q1 2019 are based **50%** on EBITDA per share targets and **50%** on the Company's total shareholder return (TSR) relative to a peer group[37](index=37&type=chunk) [6. Senior Credit Facility](index=13&type=section&id=6.%20Senior%20Credit%20Facility) This section provides information on the company's revolving credit facility, including outstanding borrowings and compliance - The Company has a five-year senior unsecured revolving credit facility of **$150,000 thousand**, maturing in **September 2022**[45](index=45&type=chunk) - As of March 31, 2019, outstanding borrowings were **$47,500 thousand**, with **$89,796 thousand** of available borrowing capacity and an interest rate of **3.9%**[46](index=46&type=chunk) - The Company was in compliance with all financial and other covenants of the facility as of March 31, 2019[48](index=48&type=chunk) [7. Net Income Per Share](index=14&type=section&id=7.%20Net%20Income%20Per%20Share) This section presents the calculation of basic and diluted net income per share for the reporting periods Net Income Per Share (Q1 2019 vs. Q1 2018) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Numerator for basic and diluted income per share - net income | $18,199 | $17,596 | | Denominator for basic income per share - weighted-average shares (thousands) | 28,530 | 29,375 | | Denominator for diluted income per share - adjusted weighted-average shares (thousands) | 28,648 | 29,480 | | Basic net income per share | $0.64 | $0.60 | | Diluted net income per share | $0.64 | $0.60 | - Basic and diluted net income per share increased to **$0.64** in Q1 2019 from **$0.60** in Q1 2018[49](index=49&type=chunk) [8. Income Taxes](index=14&type=section&id=8.%20Income%20Taxes) This section details the company's income tax expense and effective tax rates for the reporting periods - The combined federal and state effective tax rate for Q1 2019 was **23.8%**, down from **25.7%** in Q1 2018[51](index=51&type=chunk) - The lower effective tax rate in Q1 2019 was primarily due to increased stock-based compensation vesting and exercises[51](index=51&type=chunk) [9. Leases](index=15&type=section&id=9.%20Leases) This section outlines the company's lease accounting policies and the impact of the new lease standard on its financial statements - The Company adopted ASU 2016-02, Leases, on **January 1, 2019**, recognizing right-of-use assets and corresponding lease liabilities for most operating leases[53](index=53&type=chunk) Lease Costs and Obligations (Q1 2019, in thousands) | Metric | Amount | | :------------------------------------------ | :------- | | Operating lease cost | $13,861 | | Short-term lease cost | $2,849 | | Variable lease cost | $77,547 | | Sublease income | $(535) | | **Total lease cost** | **$93,722** | | Operating cash flows from operating leases | $13,451 | | Right-of-use assets obtained for new operating lease liabilities | $146,822 | | Weighted-average remaining lease term - operating leases | 4 years | | Weighted-average discount rate - operating leases | 4.4% | | Present value of future minimum lease payments | $133,739 | | Long-term lease obligations | $89,915 | - Variable lease costs, primarily for independent owner-operators, totaled **$77,547 thousand** for Q1 2019 and are included in purchased transportation[59](index=59&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) [10. Financial Instruments](index=18&type=section&id=10.%20Financial%20Instruments) This section describes the company's financial instruments and their fair value considerations - The carrying amounts of accounts receivable and accounts payable approximate their fair value due to their short-term nature[68](index=68&type=chunk) - The carrying value of the revolving credit facility approximates its fair value due to its variable interest rate[69](index=69&type=chunk) [11. Shareholders' Equity](index=18&type=section&id=11.%20Shareholders%27%20Equity) This section details changes in shareholders' equity, including dividends and share repurchase programs - The Board of Directors declared a cash dividend of **$0.18 per share** for Q4 2018 and Q1 2019, an increase from **$0.15 per share** in prior quarters of 2018[70](index=70&type=chunk) - On **February 5, 2019**, the 2016 Repurchase Plan was canceled, and a new 2019 Repurchase Plan authorizing up to **five million shares** was approved[71](index=71&type=chunk)[173](index=173&type=chunk) Share Repurchases (Q1 2019 vs. Q1 2018) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total shares repurchased | 229,872 | 364,286 | | Cost of shares repurchased | $14,181 | $19,993 | | Average cost per share | $61.69 | $54.88 | | Shares available under 2019 Plan (as of March 31, 2019) | 4,837,700 | N/A | [12. Commitments and Contingencies](index=18&type=section&id=12.%20Commitments%20and%20Contingencies) This section discloses the company's various commitments and potential liabilities from ongoing operations and legal matters - The Company is involved in routine litigation, primarily related to workers' compensation, property damage, vehicle liability, and medical benefits[74](index=74&type=chunk) - Management believes these pending actions will not have a material adverse effect on the business, financial condition, or results of operations[74](index=74&type=chunk) - Self-insurance loss exposure is estimated, but the ultimate resolution of outstanding and incurred but not reported claims could materially differ from estimates[76](index=76&type=chunk)[78](index=78&type=chunk) [13. Segment Reporting](index=19&type=section&id=13.%20Segment%20Reporting) This section provides financial performance data for each of the company's distinct operating segments - The Company operates in four reportable segments: Expedited LTL, Intermodal, TLS, and Pool Distribution, with performance evaluated based on income from operations[79](index=79&type=chunk)[81](index=81&type=chunk) Segment Results from Operations (Q1 2019 vs. Q1 2018, in thousands) | Segment | External Revenues Q1 2019 | External Revenues Q1 2018 | Income (loss) from operations Q1 2019 | Income (loss) from operations Q1 2018 | | :-------------------------- | :------------------------ | :------------------------ | :------------------------------------ | :------------------------------------ | | Expedited LTL | $177,355 | $168,363 | $19,547 | $20,773 | | Intermodal | $54,097 | $42,607 | $6,181 | $3,469 | | Truckload Premium Services | $44,923 | $48,477 | $841 | $(43) | | Pool Distribution | $45,096 | $43,161 | $1,251 | $1,371 | | Eliminations & other | — | — | $(3,086) | $(1,335) | | **Consolidated** | **$321,471** | **$302,608** | **$24,734** | **$24,235** | [14. Subsequent Events](index=20&type=section&id=14.%20Subsequent%20Events) This section reports significant events that occurred after the balance sheet date but before the financial statements were issued - On **April 21, 2019**, the Company acquired FSA Logistix for **$27,000 thousand**, funded by cash flows from operations[86](index=86&type=chunk) - FSA Logistix, specializing in last-mile logistics, is anticipated to contribute approximately **$75,000 thousand** in annual revenue and **$3,000 thousand** in operating income[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition for the three months ended March 31, 2019, compared to the same period in 2018. It covers an executive summary, key trends and developments, detailed results from operations by segment, critical accounting policies, the impact of recent accounting pronouncements, and an analysis of liquidity and capital resources [Overview and Executive Summary](index=21&type=section&id=Overview%20and%20Executive%20Summary) This section provides a high-level overview of the company's business model and key factors influencing its financial performance - Forward Air Corporation is an asset-light freight and logistics company operating in four segments: Expedited LTL, Intermodal, Truckload Premium Services (TLS), and Pool Distribution[88](index=88&type=chunk) - The company's ability to increase earnings is significantly dependent on increasing freight volume, revenue per pound, and growth in other business lines[92](index=92&type=chunk) [Trends and Developments](index=21&type=section&id=Trends%20and%20Developments) This section highlights significant operational, leadership, and environmental initiatives impacting the company - Thomas Schmitt was appointed President and CEO effective **September 1, 2018**, and Bruce A. Campbell retired as Executive Chairman on **February 5, 2019**[93](index=93&type=chunk) - The Intermodal segment expanded its geographic footprint through the acquisitions of Multi-Modal Transport Inc. and Southwest Freight Distributors in **2018**[94](index=94&type=chunk) - The Company is committed to environmental protection, participating in the EPA SmartWay program, utilizing fuel-efficient equipment, and implementing waste management solutions[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) [Results from Operations](index=23&type=section&id=Results%20from%20Operations) This section provides a detailed analysis of the company's consolidated and segment-level financial performance for the period [Revenues](index=23&type=section&id=Revenues) This section analyzes the drivers of the company's consolidated operating revenue growth and segment contributions - Consolidated operating revenue increased by **$18.9 million**, or **6.2%**, to **$321.5 million** for the three months ended March 31, 2019[99](index=99&type=chunk)[100](index=100&type=chunk) - The revenue increase was primarily driven by the Expedited LTL segment (**$8.7 million** increase), with growth also in Intermodal and Pool Distribution[99](index=99&type=chunk)[100](index=100&type=chunk) - Truckload Premium Services (TLS) revenue decreased by **$0.4 million** due to the deliberate shedding of lower-margin business[99](index=99&type=chunk)[100](index=100&type=chunk) [Operating Expenses](index=23&type=section&id=Operating%20Expenses) This section details the changes in the company's operating expenses, including salaries, purchased transportation, and other costs - Total operating expenses increased by **$18.4 million**, or **6.6%**, to **$296.8 million** for Q1 2019[99](index=99&type=chunk)[101](index=101&type=chunk) - Salaries, wages, and employee benefits increased by **$6.8 million (9.8%)** due to increased Company-employed drivers and personnel needs[99](index=99&type=chunk)[101](index=101&type=chunk) - Purchased transportation increased by **$4.3 million (3.1%)** due to increased volumes, partly offset by higher utilization of owner-operators over more costly third-party providers[99](index=99&type=chunk)[101](index=101&type=chunk) [Operating Income and Segment Operations](index=24&type=section&id=Operating%20Income%20and%20Segment%20Operations) This section provides an overview of the company's consolidated operating income and its segment-level performance - Consolidated operating income increased by **$0.5 million**, or **2.1%**, to **$24.7 million** for the three months ended March 31, 2019[99](index=99&type=chunk)[102](index=102&type=chunk) [Interest Expense](index=24&type=section&id=Interest%20Expense) This section explains the changes in interest expense, primarily due to borrowings on the credit facility - Interest expense increased by **$0.2 million**, or **50%**, to **$0.6 million** in Q1 2019, primarily due to additional borrowings on the revolving credit facility[99](index=99&type=chunk)[103](index=103&type=chunk) [Income Taxes](index=24&type=section&id=Income%20Taxes) This section discusses the company's effective tax rate and the factors influencing its income tax expense - The combined federal and state effective tax rate for Q1 2019 was **23.8%**, down from **25.7%** in Q1 2018, mainly due to increased stock-based compensation vesting and exercises[104](index=104&type=chunk) [Expedited LTL Segment Performance](index=25&type=section&id=Expedited%20LTL%20-%20Three%20Months%20Ended%20March%2031%2C%202019%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202018) This section analyzes the revenue, tonnage, and operating income performance of the Expedited LTL segment - Operating revenue increased by **5.1%** to **$178.6 million**, driven by increased network revenue and final mile revenue[107](index=107&type=chunk)[110](index=110&type=chunk) - Tonnage decreased by **2.0%**, while revenue per hundredweight increased by **6.0%**[108](index=108&type=chunk)[110](index=110&type=chunk) - Income from operations decreased by **5.8%** to **$19.6 million**, with operating margin declining to **11.0%** from **12.2%**, primarily due to sluggish linehaul tonnage, higher vehicle claim reserves, cargo claims, legal/professional fees, and increased receivables allowance[107](index=107&type=chunk)[118](index=118&type=chunk) [Intermodal Segment Performance](index=29&type=section&id=Intermodal%20-%20Three%20Months%20Ended%20March%2031%2C%202019%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202018) This section reviews the Intermodal segment's revenue growth, drayage shipments, and operating income improvements - Operating revenue increased by **11.3%** to **$54.1 million**, primarily attributable to the MMT and Southwest acquisitions[121](index=121&type=chunk)[122](index=122&type=chunk) - Drayage shipments increased by **2.6%**, and drayage revenue per shipment increased by **9.5%**[121](index=121&type=chunk) - Income from operations increased significantly by **77.1%** to **$6.2 million**, with operating margin improving to **11.5%** from **7.2%**, driven by revenue rate increases and the acquisitions[121](index=121&type=chunk)[130](index=130&type=chunk) [Truckload Premium Services Segment Performance](index=31&type=section&id=Truckload%20Premium%20Services%20-%20Three%20Months%20Ended%20March%2031%2C%202019%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202018) This section examines the Truckload Premium Services segment's revenue, miles, and operating income, highlighting strategic adjustments - Operating revenue decreased by **0.9%** to **$45.7 million** due to a **6.6%** decrease in overall miles, partly offset by a **6.4%** increase in average revenue per mile, resulting from deliberate shedding of lower-margin business[133](index=133&type=chunk)[134](index=134&type=chunk) - Income from operations improved to **$0.9 million** from breakeven in the prior year, with operating margin reaching **2.0%**, attributed to rate increases, higher fuel surcharges, and the shedding of lower-margin business[133](index=133&type=chunk)[142](index=142&type=chunk) [Pool Distribution Segment Performance](index=33&type=section&id=Pool%20Distribution%20-%20Three%20Months%20Ended%20March%2031%2C%202019%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202018) This section details the Pool Distribution segment's revenue, cartons handled, and operating income, noting cost pressures - Operating revenue increased by **5.9%** to **$45.2 million** due to rate increases, increased volumes from existing customers, and new business wins[144](index=144&type=chunk)[145](index=145&type=chunk) - Cartons handled increased by **10.3%**, while revenue per carton decreased by **4.3%**[144](index=144&type=chunk) - Income from operations decreased by **7.1%** to **$1.3 million**, with operating margin declining to **2.9%** from **3.3%**, primarily due to increased utilization of and higher rates charged by third-party carriers and the use of more costly contract labor for increasing dedicated revenue volumes[144](index=144&type=chunk)[153](index=153&type=chunk) [Other Operations Performance](index=35&type=section&id=Other%20Operations%20-%20Three%20Months%20Ended%20March%2031%2C%202019%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202018) This section explains the operating loss from other activities, including increases in self-insurance reserves and transition costs - Other operating activity resulted in a **$3.3 million** operating loss in Q1 2019, an increase from a **$1.5 million** loss in Q1 2018[154](index=154&type=chunk) - The increased loss was primarily due to a **$1.8 million** increase in self-insurance reserves for vehicular claims, a **$0.6 million** increase for workers' compensation claims, and **$0.7 million** in CEO transition costs[154](index=154&type=chunk) [Critical Accounting Policies](index=35&type=section&id=Critical%20Accounting%20Policies) This section identifies the key accounting policies requiring significant management judgment and estimates - Management considers Self-Insurance Loss Reserves, Business Combinations, and Goodwill and Other Intangible Assets as critical accounting policies due to the significant subjective judgments and estimates required[156](index=156&type=chunk) [Impact of Recent Accounting Pronouncements](index=35&type=section&id=Impact%20of%20Recent%20Accounting%20Pronouncements) This section describes the financial impact of newly adopted accounting standards, particularly on lease accounting - The adoption of ASU 2016-02, Leases, on **January 1, 2019**, led to the recognition of **$133.4 million** in right-of-use lease assets and **$133.7 million** in corresponding lease liabilities on the balance sheet[157](index=157&type=chunk) - The new lease standard had no impact on the Company's Statements of Comprehensive Income or Statements of Cash Flows[157](index=157&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash flows, credit facility, and share repurchase activities to assess its financial flexibility [Cash Flows Comparison](index=36&type=section&id=Three%20Months%20Ended%20March%2031%2C%202019%20Cash%20Flows%20compared%20to%20March%2031%2C%202018%20Cash%20Flows) This section compares the company's cash flows from operating, investing, and financing activities between periods - Net cash provided by operating activities increased by **$0.7 million** to **$41.5 million**, driven by increased collection of receivables and higher net earnings[159](index=159&type=chunk) - Net cash used in investing activities decreased by **$2.0 million** to **$3.7 million**, primarily due to lower capital expenditures[160](index=160&type=chunk) - Net cash used in financing activities decreased by **$5.0 million** to **$21.3 million**, mainly due to a **$5.8 million** decrease in common stock repurchases[161](index=161&type=chunk) [Credit Facility](index=36&type=section&id=Credit%20Facility) This section refers to the details of the company's senior credit facility as presented in the financial statements notes - Details regarding the senior credit facility are provided in Note 6 to the Consolidated Financial Statements[163](index=163&type=chunk) [Share Repurchases](index=36&type=section&id=Share%20Repurchases) This section provides information on the company's share repurchase program and dividend declarations - Information on share repurchases and dividends during the period is discussed in Note 11 to the Consolidated Financial Statements[164](index=164&type=chunk) [Forward-Looking Statements](index=36&type=section&id=Forward-Looking%20Statements) This section cautions readers about forward-looking statements and outlines key risks that could cause actual results to differ - The report contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from projections[165](index=165&type=chunk) - Key risk factors include economic conditions, availability of qualified personnel, changes in fuel prices, competition, acquisitions, claims, governmental regulations, and environmental/tax matters[165](index=165&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to market risk related to its outstanding debt is not significant and has not materially changed from the information provided in its 2018 Form 10-K - The Company's exposure to market risk related to outstanding debt is not significant[166](index=166&type=chunk) - There has been no material change in market risk from the information provided in the 2018 Form 10-K[166](index=166&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2019, and notes the implementation of changes in internal control specifically related to the adoption of the new lease accounting standard (ASU 2016-02) - Disclosure controls and procedures were evaluated and deemed effective as of **March 31, 2019**[167](index=167&type=chunk)[168](index=168&type=chunk) - Changes in internal control over financial reporting were implemented to meet the reporting and disclosure requirements of ASU 2016-02, Leases, and were effective as of **March 31, 2019**[169](index=169&type=chunk) Part II. Other Information This part covers legal proceedings, risk factors, equity security sales, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is routinely involved in litigation incidental to its business, primarily concerning personal injury, property damage, and workers' compensation claims, but does not anticipate any material adverse effect on its financial condition or operations - The Company is a party to ordinary, routine litigation, mainly involving claims for personal injury, property damage, and workers' compensation[170](index=170&type=chunk) - Management does not believe these pending actions will have a material adverse effect on the Company's business, financial condition, or results of operations[170](index=170&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive list of risk factors detailed in the company's 2018 Annual Report on Form 10-K and confirms that there have been no changes in the nature of these factors since December 31, 2018 - A summary of factors that could affect results and cause them to differ materially from forward-looking statements is described in the **2018 Annual Report on Form 10-K**[171](index=171&type=chunk) - There have been no changes in the nature of these risk factors since **December 31, 2018**[171](index=171&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides details on the company's common stock repurchase activities during the first quarter of 2019, including the cancellation of the previous repurchase plan and the authorization of a new one Issuer Purchases of Equity Securities (Q1 2019) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----------------- | :----------------------------- | :--------------------------- | | January 1-31, 2019 | 58,716 | $56.73 | | February 1-28, 2019 | 39,756 | $64.84 | | March 1-31, 2019 | 131,400 | $62.96 | | **Total** | **229,872** | **$61.69** | - On **February 5, 2019**, the 2016 Repurchase Plan was canceled, and a new 2019 Repurchase Plan authorizing up to **five million shares** was approved[173](index=173&type=chunk) - As of **March 31, 2019**, **4,837,700 shares** remained available for purchase under the 2019 Plan[172](index=172&type=chunk)[173](index=173&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[174](index=174&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[175](index=175&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the company for the reporting period - This item is not applicable[176](index=176&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, executive agreements, share-based compensation forms, and certifications - Exhibits include the Restated Charter, Amended and Restated Bylaws, Executive Severance and Change in Control Plan, Consulting Agreement, Performance Share Agreements, and CEO/CFO certifications[179](index=179&type=chunk) - XBRL Instance Document and Taxonomy Extensions are also included as exhibits[179](index=179&type=chunk) Signatures This section provides the official signatures certifying the accuracy and completeness of the report - The report was signed on **April 25, 2019**, by Michael J. Morris, Chief Financial Officer, Senior Vice President and Treasurer[182](index=182&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 Commission file number: 001-16853 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 000-22490 FORWARD AIR CORPORATION (Exact name of Registrant as specified in its charter) Tennessee (State or other ju ...