[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This part presents the company's unaudited financial statements, management's analysis, and disclosures on market risk and internal controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2021 - The financial statements are unaudited and prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and SEC rules[24](index=24&type=chunk) - The results for interim periods are not necessarily indicative of the results for the full year[24](index=24&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's assets, liabilities, and shareholders' equity as of March 31, 2021, compared to December 31, 2020 Condensed Consolidated Balance Sheets (March 31, 2021 vs. December 31, 2020) | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | Change (vs. Dec 31, 2020) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------------------- | | Total Assets | $1,015,901 | $1,047,393 | -$31,492 (-3.01%) | | Total Current Assets | $247,986 | $245,896 | +$2,090 (+0.85%) | | Cash and cash equivalents | $24,396 | $40,254 | -$15,858 (-39.39%) | | Accounts receivable, net | $186,504 | $156,490 | +$30,014 (+19.18%) | | Total Liabilities | $464,170 | $505,064 | -$40,894 (-8.09%) | | Total Current Liabilities | $169,133 | $171,620 | -$2,487 (-1.45%) | | Total Shareholders' Equity | $544,731 | $547,329 | -$2,598 (-0.47%) | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Summarizes revenues, expenses, and net income for the three months ended March 31, 2021, compared to the prior year period Condensed Consolidated Statements of Comprehensive Income (Three Months Ended March 31, 2021 vs. 2020) | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------- | | Operating revenue | $362,202 | $305,557 | +$56,645 (+18.5%) | | Total operating expenses | $339,478 | $289,785 | +$49,693 (+17.1%) | | Income from continuing operations | $22,724 | $15,772 | +$6,952 (+44.1%) | | Net income and comprehensive income | $11,181 | $8,375 | +$2,806 (+33.5%) | | Basic Net income per share | $0.40 | $0.30 | +$0.10 (+33.3%) | | Diluted Net income per share | $0.40 | $0.30 | +$0.10 (+33.3%) | | Dividends per share | $0.21 | $0.18 | +$0.03 (+16.7%) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines the cash inflows and outflows from operating, investing, and financing activities for the first quarter of 2021 and 2020 Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2021 vs. 2020) | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (YoY) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------- | | Net cash provided by operating activities of continuing operations | $16,913 | $30,828 | -$13,915 (-45.1%) | | Net cash used in investing activities of continuing operations | $(17,030) | $(57,862) | +$40,832 (+70.6%) | | Net cash (used in) provided by financing activities from continuing operations | $(15,741) | $39,530 | -$55,271 (-139.8%) | | Net (decrease) increase in cash and cash equivalents of continuing operations | $(15,858) | $12,496 | -$28,354 (-226.9%) | | Cash and cash equivalents at end of period of continuing operations | $24,396 | $77,245 | -$52,849 (-68.4%) | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shows the changes in the company's equity accounts between December 31, 2020, and March 31, 2021 Condensed Consolidated Statements of Shareholders' Equity (March 31, 2021 vs. December 31, 2020) | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | Change (vs. Dec 31, 2020) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------------------- | | Total Shareholders' Equity | $544,731 | $547,329 | -$2,598 (-0.47%) | | Retained Earnings | $296,780 | $304,140 | -$7,360 (-2.42%) | | Common Stock Shares Outstanding | 27,318 | 27,316 | +2 (+0.01%) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%E2%80%93%20March%2031%2C%202021) Provides detailed explanations of the company's accounting policies and specific financial statement items - **Note 1. Description of Business and Basis of Presentation:** Forward Air Corporation is an asset-light freight and logistics company with two reportable segments: Expedited Freight and Intermodal[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[25](index=25&type=chunk) - **Note 2. Revenue Recognition:** Revenue is recognized when performance obligations are satisfied, typically upon shipment delivery or completion of related services[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - **Note 3. Discontinued Operation and Held for Sale:** The Pool business was sold on February 12, 2021, for **$8,000 thousand in cash** and a potential **$12,000 thousand earn-out**[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[37](index=37&type=chunk) Summarized Discontinued Operation Financial Information (Three Months Ended March 31, 2021 vs. 2020) | Metric | March 31, 2021 (in thousands) | March 31, 2020 (in thousands) | Change (YoY) | | :------------------------------------ | :----------------------------- | :----------------------------- | :-------------------------------- | | Operating revenue | $17,087 | $36,952 | -$19,865 (-53.8%) | | Total operating expenses | $20,531 | $41,022 | -$20,491 (-49.9%) | | Loss from discontinued operation, net of tax | $(5,533) | $(3,040) | -$2,493 (-82.0%) | | Loss on sale of business | $(2,860) | $0 | -$2,860 (N/A) | - **Note 4. Acquisitions:** In February 2021, the Company acquired Proficient Transport for **$15,000 thousand** and a potential **$2,000 thousand earn-out**, expanding its Intermodal footprint[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) Proficient Transport Acquisition: Fair Value of Assets Acquired and Liabilities Assumed (February 28, 2021) | Asset/Liability Type | Amount (in thousands) | | :---------------------- | :-------------------- | | Tangible assets | $4,015 | | Intangible assets | $11,832 | | Goodwill | $5,754 | | Total assets acquired | $15,847 | | Liabilities assumed | $32 | | Net assets acquired | $15,815 | - **Note 5. Goodwill and Other Intangible Assets:** Goodwill increased by **$5,754 thousand** to **$250,736 thousand** as of March 31, 2021, primarily due to the Proficient Transport acquisition[47](index=47&type=chunk)[48](index=48&type=chunk) - **Note 6. Stock Incentive Plans:** Total share-based compensation expense for Q1 2021 was **$2,285 thousand**[51](index=51&type=chunk)[53](index=53&type=chunk)[56](index=56&type=chunk)[61](index=61&type=chunk) - **Note 7. Indebtedness:** As of March 31, 2021, the Company had **$112,500 thousand** in outstanding borrowings under its revolving credit facility, with an interest rate of **3.25%**[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - **Note 8. Net Income (Loss) Per Share:** Basic and diluted net income per share from continuing operations were **$0.61** and **$0.60**, respectively, for Q1 2021[72](index=72&type=chunk) - **Note 9. Income Taxes:** The effective tax rate for continuing operations was **22.5%** for Q1 2021, down from **23.5%** in Q1 2020[75](index=75&type=chunk)[77](index=77&type=chunk) - **Note 10. Fair Value of Financial Instruments:** The earn-out liability, classified as Level 3, increased to **$7,632 thousand** as of March 31, 2021, from **$6,865 thousand** at December 31, 2020[80](index=80&type=chunk)[81](index=81&type=chunk) - **Note 11. Shareholders' Equity:** The Company declared a quarterly cash dividend of **$0.21 per common share** for Q1 2021 and Q2 2021[84](index=84&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - **Note 12. Commitments and Contingencies:** The Company is party to routine legal claims not deemed material and retains risk on vehicle liability and workers' compensation insurance[89](index=89&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk) - **Note 13. Segment Reporting:** The Company operates two reportable segments: Expedited Freight and Intermodal, with external revenues for Q1 2021 of **$303,531 thousand** and **$58,502 thousand**, respectively[95](index=95&type=chunk)[97](index=97&type=chunk) Expedited Freight Revenue Breakdown (Three Months Ended March 31, 2021 vs. 2020) | Revenue Type (in thousands) | March 31, 2021 | March 31, 2020 | Change (YoY) | | :-------------------------- | :------------- | :------------- | :----------- | | Network | $178,627 | $152,009 | +17.5% | | Truckload | $52,380 | $47,529 | +10.2% | | Final Mile | $62,256 | $47,802 | +30.2% | | Other | $10,923 | $6,285 | +73.8% | | **Total** | **$304,186** | **$253,625** | **+19.9%** | - **Note 14. Subsequent Event:** On April 28, 2021, the Company agreed to acquire J&P Hall Express Delivery for **$7,400 thousand**[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for Q1 2021 - Forward Air Corporation is a leading asset-light freight and logistics company providing LTL, final mile, truckload, and intermodal drayage services[102](index=102&type=chunk) - The Company's strategy focuses on increasing freight volume, growing LTL and final mile solutions, and executing synergies across services[106](index=106&type=chunk) - The Pool Distribution business was divested on February 12, 2021, and its results are presented as a discontinued operation[107](index=107&type=chunk) [Overview](index=24&type=section&id=Overview) Describes the company's two reportable segments, Expedited Freight and Intermodal, and their respective service offerings and growth plans - The Company operates two reportable segments: **Expedited Freight** and **Intermodal**[103](index=103&type=chunk) - Expedited Freight provides LTL, final mile, truckload, warehousing, and customs brokerage services, with plans for geographic expansion[104](index=104&type=chunk) - Intermodal offers first- and last-mile drayage services, with plans to grow its geographic footprint through acquisitions and greenfield start-ups[105](index=105&type=chunk) [Trends and Developments](index=24&type=section&id=Trends%20and%20Developments) Discusses the impact of COVID-19, recent acquisitions and divestitures, and the company's ESG initiatives - Business operations have returned to **pre-COVID levels**, but the future impact of the pandemic remains uncertain[109](index=109&type=chunk) - In February 2021, the Company acquired Proficient Transport for **$15,000 thousand** and a potential earn-out, expanding its intermodal footprint[112](index=112&type=chunk) - The sale of the Pool business on February 12, 2021, generated an **$8,000 thousand cash payment** and resulted in a **$2,860 thousand loss on sale**[113](index=113&type=chunk) - The Company initiated ESG market analysis in 2020 and published its **first ESG report in Q1 2021**[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Results from Operations (Consolidated)](index=27&type=section&id=Results%20from%20Operations) Provides a consolidated overview of the company's financial performance for Q1 2021 compared to Q1 2020 Consolidated Financial Data from Operations (Three Months Ended March 31, 2021 vs. 2020) | Metric (in thousands) | March 31, 2021 | March 31, 2020 | Change | Percent Change | | :------------------------------------ | :------------- | :------------- | :----- | :------------- | | Operating revenue | $362,202 | $305,557 | $56,645 | 18.5% | | Total operating expenses | $339,478 | $289,785 | $49,693 | 17.1% | | Income from continuing operations | $22,724 | $15,772 | $6,952 | 44.1% | | Net income and comprehensive income | $11,181 | $8,375 | $2,806 | 33.5% | - Operating revenue increased by **18.5%**, primarily driven by a **$50,561 thousand** increase in the Expedited Freight segment[120](index=120&type=chunk) - Total operating expenses increased by **17.1%**, mainly due to a **$34,010 thousand** increase in purchased transportation[121](index=121&type=chunk) - Interest expense increased by **36.6%** to **$1,165 thousand**, attributable to a higher interest rate on outstanding borrowings[123](index=123&type=chunk) - Loss from discontinued operations, net of tax, increased by **82.0%** to **$5,533 thousand**, including a **$2,860 thousand loss** on the sale of the Pool business[125](index=125&type=chunk) [Expedited Freight Segment Analysis](index=29&type=section&id=Expedited%20Freight%20-%20Three%20Months%20Ended%20March%2031%2C%202021%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202020) Details the financial and operational performance of the Expedited Freight segment for Q1 2021 versus Q1 2020 Expedited Freight Segment Information (Three Months Ended March 31, 2021 vs. 2020) | Metric (in thousands) | March 31, 2021 | March 31, 2020 | Change | Percent Change | | :-------------------- | :------------- | :------------- | :----- | :------------- | | Operating revenue | $304,186 | $253,625 | $50,561 | 19.9% | | Total operating expenses | $279,656 | $238,446 | $41,210 | 17.3% | | Income from operations | $24,530 | $15,179 | $9,351 | 61.6% | - Operating revenue increased by **19.9%**, driven by a **17.5%** increase in Network revenue and a **30.2%** increase in Final Mile revenue[134](index=134&type=chunk) - Purchased transportation increased by **23.8%** to **$164,364 thousand**, representing **54.0%** of operating revenue[135](index=135&type=chunk) - Income from operations increased by **61.6%**, reaching **8.1%** of operating revenue, up from **6.0%**[142](index=142&type=chunk) Expedited Freight Operating Statistics (Three Months Ended March 31, 2021 vs. 2020) | Metric | March 31, 2021 | March 31, 2020 | Percent Change | | :-------------------------- | :------------- | :------------- | :------------- | | Total pounds (in thousands) | 651,339 | 569,956 | 14.3% | | Total shipments (in thousands) | 1,026 | 885 | 15.9% | | Revenue per hundredweight | $27.56 | $27.16 | 1.5% | | Network gross margin | 51.9% | 53.4% | (2.8)% | [Intermodal Segment Analysis](index=33&type=section&id=Intermodal%20-%20Three%20Months%20Ended%20March%2031%2C%202021%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202020) Details the financial and operational performance of the Intermodal segment for Q1 2021 versus Q1 2020 Intermodal Segment Information (Three Months Ended March 31, 2021 vs. 2020) | Metric (in thousands) | March 31, 2021 | March 31, 2020 | Change | Percent Change | | :-------------------- | :------------- | :------------- | :----- | :------------- | | Operating revenue | $58,514 | $52,460 | $6,054 | 11.5% | | Total operating expenses | $54,005 | $48,747 | $5,258 | 10.8% | | Income from operations | $4,509 | $3,713 | $796 | 21.4% | - Operating revenue increased by **11.5%**, primarily due to a **9.0%** increase in drayage shipments[146](index=146&type=chunk) - Purchased transportation increased by **13.4%** to **$20,603 thousand**, representing **35.2%** of operating revenue[147](index=147&type=chunk) - Income from operations increased by **21.4%**, reaching **7.7%** of operating revenue, up from **7.1%**[154](index=154&type=chunk) Intermodal Operating Statistics (Three Months Ended March 31, 2021 vs. 2020) | Metric | March 31, 2021 | March 31, 2020 | Percent Change | | :-------------------------- | :------------- | :------------- | :------------- | | Drayage shipments | 89,909 | 82,474 | 9.0% | | Drayage revenue per shipment | $553 | $551 | 0.4% | | Number of locations | 27 | 24 | 12.5% | [Other Operations Analysis](index=36&type=section&id=Other%20Operations%20-%20Three%20Months%20Ended%20March%2031%2C%202021%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202020) Explains the results of other operating activities, which resulted in an increased operating loss compared to the prior year - Other operating activity resulted in a **$6,315 thousand operating loss** for Q1 2021, compared to a **$3,120 thousand loss** in Q1 2020[155](index=155&type=chunk) - The increased loss was primarily due to **$6,955 thousand** in increased professional fees related to cybersecurity and shareholder engagement activities[155](index=155&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) Highlights the key accounting estimates and assumptions management uses in preparing the financial statements - The Company's financial statements rely on management's estimates and assumptions, including those for goodwill and self-insurance loss reserves[156](index=156&type=chunk) - These estimates are based on historical experience and various other assumptions, and actual results may differ[156](index=156&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's sources of liquidity, capital expenditures, and ability to meet its financial obligations - The Company historically finances working capital needs with cash flows from operations and borrowings under its revolving credit facility[157](index=157&type=chunk) - Management believes current liquidity sources are sufficient to support working capital, capital expenditures, and debt service requirements[157](index=157&type=chunk) - The Company was in compliance with all financial covenants of its revolving credit facility as of March 31, 2021[159](index=159&type=chunk) [Cash Flows Analysis](index=36&type=section&id=Cash%20Flows) Analyzes the changes in cash flows from operating, investing, and financing activities for both continuing and discontinued operations Cash Flows from Continuing Operations (Three Months Ended March 31, 2021 vs. 2020) | Metric (in thousands) | March 31, 2021 | March 31, 2020 | Change (YoY) | | :------------------------------------------------- | :------------- | :------------- | :----------- | | Net cash provided by operating activities | $16,913 | $30,828 | -$13,915 | | Net cash used in investing activities | $(17,030) | $(57,862) | +$40,832 | | Net cash (used in) provided by financing activities | $(15,741) | $39,530 | -$55,271 | - The decrease in net cash from continuing operating activities was primarily due to an increase in other receivables related to the Pool business sale[160](index=160&type=chunk) - Net cash used in continuing investing activities decreased due to **lower acquisition spending** in 2021 versus 2020[161](index=161&type=chunk) - Net cash from continuing financing activities shifted to a net outflow, primarily due to **no proceeds from the revolving credit facility** in 2021[162](index=162&type=chunk) Cash Flows from Discontinued Operation (Three Months Ended March 31, 2021 vs. 2020) | Metric (in thousands) | March 31, 2021 | March 31, 2020 | Change (YoY) | | :------------------------------------------------- | :------------- | :------------- | :----------- | | Net cash used in operating activities | $(6,902) | $(1,662) | -$5,240 | | Net cash provided by (used in) investing activities | $8,020 | $(491) | +$8,511 | | Net cash used in financing activities | $(1,118) | $2,153 | -$3,271 | - Net cash provided by discontinued investing activities increased significantly due to **$8,000 thousand in proceeds** from the sale of the Pool business[164](index=164&type=chunk) [Share Repurchase Program](index=38&type=section&id=Share%20Repurchase%20Program) Provides details on the company's common stock repurchases during the first quarter of 2021 Common Stock Repurchases (Three Months Ended March 31, 2021 vs. 2020) | Metric | Q1 2021 | Q1 2020 | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | | Shares Repurchased | 113,756 | 268,027 | -154,271 | | Total Cost (in thousands) | $9,998 | $15,259 | -$5,261 | | Average Price Per Share | $87.89 | $56.93 | +$30.96 | - The repurchases were made under the 2019 Repurchase Plan, which authorizes up to **5,000,000 shares**[175](index=175&type=chunk) [Forward-Looking Statements](index=38&type=section&id=Forward-Looking%20Statements) Cautions readers that the report contains statements about future performance that are subject to risks and uncertainties - This section highlights that the report contains forward-looking statements regarding future events and financial performance[167](index=167&type=chunk) - Actual results may differ materially due to various factors, including economic conditions, the COVID-19 pandemic, and competition[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company refers to its Annual Report on Form 10-K for detailed disclosures about market risks, with no material changes in Q1 2021 - Detailed disclosures about market risks are provided in Item 7A of Part II of the Annual Report on Form 10-K for the year ended December 31, 2020[170](index=170&type=chunk) - As of the first quarter 2021, there have been **no material changes** in the Company's exposures to market risk[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the Company's disclosure controls and procedures and concluded they are effective as of March 31, 2021 [Disclosure Controls and Procedures](index=40&type=section&id=Disclosure%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures as of the end of the reporting period - Management, with the participation of the Chief Executive Officer, concluded that the disclosure controls and procedures were **effective** as of March 31, 2021[171](index=171&type=chunk) [Changes in Internal Control](index=40&type=section&id=Changes%20in%20Internal%20Control) States that no material changes occurred in the company's internal control over financial reporting during the quarter - There were **no changes** in internal control over financial reporting during the three months ended March 31, 2021, that materially affected internal controls[172](index=172&type=chunk) [Part II. Other Information](index=40&type=section&id=Part%20II.%20Other%20Information) Contains information on legal proceedings, risk factors, share repurchases, and other corporate matters [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The Company is routinely involved in ordinary litigation that is not expected to be material to its business or financial condition - The Company is a party to ordinary, routine litigation incidental to its business, mostly involving claims for personal injury and property damage[173](index=173&type=chunk) - Management does not believe that any of these pending actions will have a **material adverse effect** on the Company's business or financial condition[173](index=173&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the detailed discussion of risk factors in the Company's Annual Report on Form 10-K - For quantitative and qualitative disclosures about market risks, refer to the Annual Report on Form 10-K for the year-ended December 31, 2020[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company repurchased 113,756 shares for $9,998 thousand during Q1 2021 under its 2019 Repurchase Plan Issuer Purchases of Equity Securities (Three Months Ended March 31, 2021) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------------------- | :----------------------------- | :--------------------------- | | January 1, 2021 through January 31, 2021 | — | $— | | February 1, 2021 through February 28, 2021 | 13,000 | $87.00 | | March 1, 2021 through March 31, 2021 | 100,756 | $88.00 | | **Total** | **113,756** | **$87.89** | - As of March 31, 2021, approximately **3,254,695 shares remained authorized** for repurchase under the 2019 Repurchase Plan[175](index=175&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - Not applicable[176](index=176&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - Not applicable[176](index=176&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) The Company entered into an Advisory Agreement with a former executive officer to provide transition services - An Advisory Agreement was entered into with Michael J. Morris, effective April 5, 2021, to provide advisory services during the CFO transition[177](index=177&type=chunk) - Mr. Morris will receive a fixed monthly fee of **$10,000**, which will be reduced to **$5,000** per month after the new CFO commences employment[177](index=177&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including charters, bylaws, and certifications - Key exhibits include the Restated Charter, Amended and Restated Bylaws, Advisory Agreement, and various officer certifications[180](index=180&type=chunk) [Signatures](index=43&type=section&id=Signatures) Confirms the report's authorization by the company's President & CEO and Chief Accounting Officer on May 3, 2021 [Signatures](index=43&type=section&id=Signatures) The report is duly signed on behalf of the company by its President & CEO and its Chief Accounting Officer on May 3, 2021 - The report was signed by **Thomas Schmitt**, President and Chief Executive Officer, and **Rebecca J. Garbrick**, Vice President, Chief Accounting Officer and Controller[182](index=182&type=chunk)[183](index=183&type=chunk) - The signing date was **May 3, 2021**[182](index=182&type=chunk)[183](index=183&type=chunk)

Forward Air Corporation (NASDAQ:FWRD) Q1 2021 Earnings Conference Call April 30, 2021 9:00 AM ET Company Participants Thomas Schmitt - Chairman, President and Chief Executive Officer Conference Call Participants Jack Atkins - Stephens Tyler Brown - Raymond James Todd Fowler - KeyBanc Capital Markets Scott Group - Wolfe Research Bruce Chan - Stifel Operator Thank you for joining Forward Air Corporation's First Quarter 2021 Earnings Release Conference Call. Before we begin, I'd like to point out that both the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 Commission file number: 000-22490 OR ☐ 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 ...

Forward Air Corporation (NASDAQ:FWRD) Q4 2020 Earnings Conference Call February 12, 2021 9:00 AM ET Company Participants Tom Schmitt - Chief Executive Officer Mike Morris - Chief Financial Officer Conference Call Participants Bruce Chan - Stifel Wade Schaller - Stephens Scott Group - Wolfe Research Tyler Brown - Raymond James Todd Fowler - KeyBanc Capital Markets Operator Thank you for joining Forward Air Corporation's Fourth Quarter 2020 Earnings Release Conference Call. Before we begin, I'd like to point ...

Financial Data and Key Metrics Changes - In Q3 2020, the overall tonnage increased by 3.6% compared to the previous year, with July, August, and September showing increases of 1.7%, 4.5%, and 4.6% respectively [7] - The company reported a margin improvement in its Expedited Freight segment, with margins rising from 5% in Q2 to 10% in September [11] - The EPS guidance for Q4 2020 is projected to be between $0.71 and $0.75, compared to $0.79 in Q4 2019 [17] Business Line Data and Key Metrics Changes - The essential freight segment saw an 8% year-over-year increase, indicating a shift towards more essential services [9] - The company implemented various pricing actions, including a California surcharge and modifications to fuel surcharges, to enhance margins [10] - The intermodal segment experienced a decline in trade volumes by 12% in the quarter, attributed to delays in inventory replenishment [74] Market Data and Key Metrics Changes - Daily tonnage in LTL for October was up around 6%, indicating robust demand despite potential trade-offs between volume growth and yield [30] - The company noted that outside miles were around 7.5% of total miles, excluding California, which increased to 14.5% when including California due to congestion [55] Company Strategy and Development Direction - The company is focused on organic expansion, with new LTL terminals opened in Columbia, Missouri, and Roanoke, Virginia, and plans for more in the near future [12] - There is a strong commitment to M&A activity, with recent acquisitions in the final mile and intermodal segments, and a focus on maintaining operational precision [13][14] - The company aims for double-digit annual revenue growth and is committed to enhancing service levels and operational efficiency [11][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong liquidity and cash flow, having repaid $20 million on their credit line and increased the quarterly dividend by 16.7% [19][20] - The management acknowledged the challenges posed by COVID-19 but emphasized the importance of adapting to changing market conditions and customer needs [3][4] - There is an expectation for continued recovery in the intermodal segment as inventory levels normalize [75] Other Important Information - The company has returned over $350 million to shareholders over the past five years through dividends and share repurchases [20] - The management highlighted the importance of driver retention and satisfaction in maintaining service levels and operational efficiency [58] Q&A Session Summary Question: Can you elaborate on the pricing actions being taken? - Management indicated that pricing actions include temporary surcharges due to congestion, with a mix of permanent and temporary measures to enhance revenue capture [26][28] Question: What is the mix of freight in the network currently? - The current mix includes a significant focus on organic growth and new verticals, with a shift towards essential freight categories [32][33] Question: How is the company approaching M&A in the LTL segment? - Management stated that they are open to opportunities in LTL and are looking at both tuck-in acquisitions and larger deals that fit their operational model [103] Question: What is the outlook for the intermodal segment? - Management expects a recovery in intermodal volumes as inventory levels normalize, with recent weeks showing positive trends [75] Question: How is the company positioning for potential vaccine distribution? - The company is actively engaging with customers in the pharma and life sciences sectors to support supply chains related to vaccine distribution [104][105]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-22490 FORWARD AIR CORPORATION (Exact name of registrant as specified in its charter) | Tennessee | | | 62-1120025 | | --- | --- | --- | --- | | (State or other jurisdiction ...

Forward Air Corporation (NASDAQ:FWRD) Q2 2020 Earnings Conference Call July 31, 2020 9:00 AM ET Company Participants Tom Schmitt - Chief Executive Officer Mike Morris - Chief Financial Officer Conference Call Participants Jack Atkins - Stephens Zachary Haggerty - KeyBanc Capital Markets Ben Hartford - Baird Scott Group - Wolfe Research Jizong Chan - Stifel Nicolaus Operator Thank you for joining Forward Air Corporation's Second Quarter 2020 Earnings Release Conference Call. Before we begin, I'd like to poi ...

Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q2 2020 financials show significant net income decline, driven by COVID-19 and Pool Distribution reclassification [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) By June 30, 2020, total assets increased to $1.07 billion, liabilities grew, and shareholders' equity slightly decreased Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$1,072,499** | **$990,878** | | Total current assets | $247,291 | $236,318 | | Goodwill and other acquired intangibles, net | $389,385 | $340,556 | | Assets held for sale (Current & Noncurrent) | $86,464 | $91,656 | | **Total Liabilities** | **$506,207** | **$413,696** | | Total current liabilities | $146,852 | $137,164 | | Debt and finance lease obligations, less current portion | $136,549 | $72,249 | | Liabilities held for sale (Current & Noncurrent) | $60,117 | $61,917 | | **Total Shareholders' Equity** | **$566,292** | **$577,182** | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Q2 2020 operating revenue decreased 7.0% to $281.7 million, with net income plummeting to $3.2 million due to discontinued operations Q2 Financial Performance (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | $281,678 | $302,887 | -7.0% | | Income from Continuing Operations | $13,914 | $29,070 | -52.1% | | Net Income from Continuing Operations | $9,225 | $21,244 | -56.6% | | (Loss) from Discontinued Operations | $(6,071) | $1,086 | N/A | | **Net Income** | **$3,154** | **$22,330** | **-85.9%** | | Diluted EPS | $0.11 | $0.78 | -85.9% | Six-Month Financial Performance (in thousands, except per share data) | Metric | H1 2020 | H1 2019 | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | $587,235 | $581,848 | +0.9% | | Income from Continuing Operations | $29,687 | $52,772 | -43.7% | | Net Income from Continuing Operations | $20,641 | $38,931 | -47.0% | | (Loss) from Discontinued Operations | $(9,112) | $1,806 | N/A | | **Net Income** | **$11,529** | **$40,737** | **-71.7%** | | Diluted EPS | $0.40 | $1.41 | -71.6% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2020 operating cash flow was $59.9 million, investing activities used $69.2 million for acquisitions, and financing provided $25.4 million Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | **Continuing Operations** | | | | Net cash provided by operating activities | $59,929 | $64,270 | | Net cash used in investing activities | $(69,157) | $(40,206) | | Net cash provided by (used in) financing activities | $25,395 | $(34,944) | | **Discontinued Operations** | | | | Cash (used in) provided by operating activities | $(4,672) | $7,494 | | **Net Increase (Decrease) in Cash** | **$16,167** | **$(10,880)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail Pool Distribution divestiture, Linn Star acquisition, no goodwill impairment, and $132.5 million outstanding on the credit facility - On April **23, 2020**, the Board approved a strategy to divest the Pool Distribution business, which is now classified as a discontinued operation and held for sale[21](index=21&type=chunk)[27](index=27&type=chunk)[36](index=36&type=chunk) - In January **2020**, the company acquired Linn Star for **$57.2 million** to expand its Final Mile services within the Expedited Freight segment[44](index=44&type=chunk) - Annual goodwill impairment testing as of June **30, 2020**, indicated no impairment, with the fair value of each reporting unit exceeding its carrying value by at least **49.4%**[54](index=54&type=chunk) - As of June **30, 2020**, the company had **$132.5 million** in borrowings outstanding under its revolving credit facility, with **$77.1 million** of available capacity[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses COVID-19's impact on volumes, strategic LTL and Final Mile growth, operating income decline, and liquidity enhancement measures [Trends and Developments](index=34&type=section&id=Trends%20and%20Developments) COVID-19 significantly impacted the business, leading to strategic LTL and Final Mile investments, Pool business divestiture, and increased ESG focus - The COVID-19 pandemic presents a meaningful challenge due to the company's exposure to air freight, ocean freight, and physical retail, impacting volumes in both Expedited Freight and Intermodal segments[139](index=139&type=chunk) - The company is making key investments to emerge as a stronger LTL competitor, integrating Final Mile operations, and growing its truckload brokerage[142](index=142&type=chunk) - To improve financial flexibility during the pandemic, the company increased its revolving credit facility by **$75 million** and deferred approximately **$12 million** in **2020** tax payments under the CARES Act[147](index=147&type=chunk) - The company is enhancing its ESG focus, appointing a head of Corporate ESG in Q1 **2020** and partnering with programs like EPA SmartWay and Hope for the Warriors[151](index=151&type=chunk)[153](index=153&type=chunk)[156](index=156&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q2 2020 consolidated revenue fell 7.0% to $281.7 million, with operating income down 52.2%, impacted by declines in Expedited Freight Network and Intermodal Q2 2020 vs Q2 2019 Segment Performance (in millions) | Segment | Revenue Q2 2020 | Revenue Q2 2019 | % Change | Income from Ops Q2 2020 | Income from Ops Q2 2019 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expedited Freight | $235.7 | $253.3 | -6.9% | $11.8 | $28.2 | -58.2% | | Intermodal | $46.4 | $50.5 | -8.1% | $4.4 | $5.2 | -15.4% | | **Total Continuing Ops** | **$281.7** | **$302.9** | **-7.0%** | **$13.9** | **$29.1** | **-52.2%** | H1 2020 vs H1 2019 Segment Performance (in millions) | Segment | Revenue H1 2020 | Revenue H1 2019 | % Change | Income from Ops H1 2020 | Income from Ops H1 2019 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expedited Freight | $489.3 | $478.9 | +2.2% | $26.9 | $49.1 | -45.2% | | Intermodal | $98.9 | $104.6 | -5.4% | $8.1 | $11.4 | -28.9% | | **Total Continuing Ops** | **$587.2** | **$581.8** | **+0.9%** | **$29.7** | **$52.8** | **-43.8%** | - In Q2 **2020**, Expedited Freight's Network revenue fell **$38.3 million** (**-22.2%**) due to a **16.7%** decrease in tonnage, while Final Mile revenue grew **$28.4 million** (**+113.6%**) driven by acquisitions[168](index=168&type=chunk)[173](index=173&type=chunk) - Intermodal drayage shipments decreased **9.3%** in Q2 **2020** compared to the prior year, contributing to the segment's revenue decline[186](index=186&type=chunk)[187](index=187&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $80.9 million cash, H1 2020 operating cash flow of $59.9 million, $69.2 million used in investing, and $25.4 million from financing - As of June **30, 2020**, the company had **$80.9 million** in cash and was in compliance with all debt covenants[242](index=242&type=chunk) - Net cash from continuing operating activities was **$59.9 million** for H1 **2020**, a decrease of **$4.3 million** from H1 **2019**[243](index=243&type=chunk) - Net cash used in continuing investing activities was **$69.2 million** in H1 **2020**, including **$55.9 million** for the Linn Star acquisition and **$9.8 million** for the Columbus, OH hub expansion[244](index=244&type=chunk) - Net cash provided by continuing financing activities was **$25.4 million** in H1 **2020**, reflecting a **$55.0 million** increase in borrowings and a **$23.4 million** decrease in share repurchases compared to H1 **2019**[245](index=245&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure from outstanding debt is not significant and remains unchanged from its 2019 Form 10-K disclosures - Exposure to market risk from outstanding debt is not significant and has not materially changed since the **2019** year-end report[253](index=253&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2020, with internal control changes for discontinued operations reporting - The CEO and CFO concluded that disclosure controls and procedures are effective[254](index=254&type=chunk) - Changes to internal controls were made during Q2 **2020** to address the reporting requirements for discontinued operations and held-for-sale assets[255](index=255&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, but no pending actions are expected to materially affect its financial condition or operations - The company is not involved in any legal proceedings that are expected to have a material adverse effect on its business[256](index=256&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight COVID-19's material adverse effects, including reduced demand, operational disruptions, and financial market volatility - The COVID-19 pandemic is highlighted as a significant risk factor that has adversely impacted economic activity, disrupted supply chains, and reduced demand for the company's services[259](index=259&type=chunk) - A key vulnerability is that much of the freight moved by the company is not considered "essential," leading to volume deterioration during stay-at-home orders and business closures[260](index=260&type=chunk) - The long-term impact of the pandemic on results, financial condition, and liquidity remains highly uncertain and depends on future developments[261](index=261&type=chunk)[262](index=262&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No equity securities were repurchased in Q2 2020, with approximately 3.9 million shares remaining available under the repurchase program - No shares were repurchased during the three months ended June **30, 2020**[265](index=265&type=chunk) - As of the end of Q2 **2020**, **3,886,950** shares were available for purchase under the existing share repurchase program[265](index=265&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) The company entered an amended consulting agreement with former executive Matthew J. Jewell, effective July 1, 2020, for a monthly fee of $20,000 - The company entered into an amended consulting agreement with former executive officer Matthew J. Jewell, effective July **1, 2020**[268](index=268&type=chunk)

Forward Air Corporation (NASDAQ:FWRD) Q1 2020 Earnings Conference Call May 1, 2020 9:00 AM ET Company Participants Thomas Schmitt - CEO Michael Morris - CFO Conference Call Participants Jack Atkins - Stephens Ben Hartford - Robert W. Baird & Co. Todd Fowler - KeyBanc Capital Markets Scott Group - Wolfe Research Operator Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter Earnings Call 2020. [Operator Instructions] As a reminder, this conference is being recorded. Thank you for ...

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited statements show a 6.5% revenue increase but a 54.3% net income drop due to COVID-19 impacts [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $1.07 billion, driven by acquisitions, while shareholders' equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $241,189 | $236,318 | | **Total assets** | $1,066,236 | $990,878 | | **Total current liabilities** | $143,328 | $137,164 | | **Total liabilities** | $500,395 | $413,696 | | **Total shareholders' equity** | $565,841 | $577,182 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q1 2020 revenue grew to $342.5 million, but net income fell sharply to $8.4 million year-over-year Q1 2020 vs Q1 2019 Income Statement (in thousands, except per share data) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | **Operating revenue** | $342,509 | $321,471 | | **Income from operations** | $11,702 | $24,734 | | **Net income** | $8,375 | $18,407 | | **Diluted EPS** | $0.30 | $0.64 | | **Dividends per share** | $0.18 | $0.18 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased while investing cash use surged due to a major business acquisition Q1 2020 vs Q1 2019 Cash Flows (in thousands) | Cash Flow Activity | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $29,166 | $41,526 | | **Net cash used in investing activities** | ($58,353) | ($3,689) | | **Net cash provided by (used in) financing activities** | $41,683 | ($21,329) | | **Net increase in cash** | $12,496 | $16,508 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the impact of COVID-19, a key acquisition, and the subsequent decision to divest a business segment - The company operates in three principal reportable segments: Expedited Freight, Intermodal, and Pool Distribution[19](index=19&type=chunk) - In January 2020, the company acquired Linn Star for **$57.2 million** to expand its Final Mile capabilities within the Expedited Freight segment[33](index=33&type=chunk) - On April 23, 2020, the Board of Directors approved a strategy to **divest the Pool Distribution business**, which will be reported as a Discontinued Operation starting in Q2 2020[113](index=113&type=chunk) - On April 16, 2020, the company amended its credit facility, **increasing the revolving credit line from $150 million to $225 million**[109](index=109&type=chunk)[110](index=110&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the pandemic's negative impact, which drove an operating income decline despite revenue growth - The COVID-19 pandemic presented a **'meaningful challenge'** due to exposure to air freight, ocean freight, and physical retail, with much freight not classified as 'essential goods'[121](index=121&type=chunk)[122](index=122&type=chunk) - In response to a significant revenue reduction in the Pool Distribution segment, the company **furloughed roughly 90% of the segment's workforce** in April 2020[127](index=127&type=chunk) - The company improved its financial flexibility by **fully drawing down its $150 million revolving credit facility** and executing a $75 million amendment to increase the line[129](index=129&type=chunk) - The company projects a downturn in Q2 2020 with a slow sequential recovery and a **consolidated Q2 operating loss**, but anticipates profitability on a continuing operations basis[128](index=128&type=chunk) [Results from Operations](index=27&type=section&id=Results%20from%20Operations) Consolidated revenue increased 6.5% due to acquisitions, but operating income fell 52.6% from COVID-19 impacts Consolidated Results from Operations (in millions) | Metric | Q1 2020 | Q1 2019 | % Change | | :--- | :--- | :--- | :--- | | **Operating revenue** | $342.5 | $321.5 | 6.5% | | **Income from operations** | $11.7 | $24.7 | (52.6)% | | **Net income** | $8.4 | $18.4 | (54.3)% | Operating Income by Segment (in millions) | Segment | Q1 2020 | Q1 2019 | % Change | | :--- | :--- | :--- | :--- | | Expedited Freight | $14.7 | $20.4 | (27.9)% | | Intermodal | $3.7 | $6.2 | (40.3)% | | Pool Distribution | ($3.6) | $1.3 | (376.9)% | [Expedited Freight Segment Analysis](index=29&type=section&id=Expedited%20Freight%20Segment%20Analysis) Segment revenue grew 12.6% from acquisitions, but operating income fell 27.9% due to lower core network volume Expedited Freight Revenue Breakdown (in millions) | Revenue Stream | Q1 2020 | Q1 2019 | % Change | | :--- | :--- | :--- | :--- | | Network | $152.0 | $161.4 | (5.8)% | | Truckload | $45.1 | $45.0 | 0.2% | | Final Mile | $47.8 | $9.8 | 387.8% | | **Total Operating Revenue** | **$251.2** | **$223.0** | **12.6%** | - Network tonnage per day **decreased by 6.0%** year-over-year, with the decline accelerating in March 2020 to 11.3% due to the impact of COVID-19[152](index=152&type=chunk)[154](index=154&type=chunk) [Intermodal Segment Analysis](index=33&type=section&id=Intermodal%20Segment%20Analysis) Intermodal revenue decreased 3.1% and operating income fell 40.3% due to lower storage revenue and volumes - Drayage shipments **increased 9.1%** to 82,474, but this was tempered by a 7.9% decline in March 2020 compared to March 2019 due to COVID-19[166](index=166&type=chunk)[167](index=167&type=chunk) - The decrease in operating revenue was primarily attributable to a **$2.8 million decrease in storage revenue**[167](index=167&type=chunk) [Pool Distribution Segment Analysis](index=36&type=section&id=Pool%20Distribution%20Segment%20Analysis) The segment was severely impacted by COVID-19, with revenue falling 12.8% and swinging to a $3.6 million operating loss - Cartons handled **decreased 16.2%** year-over-year, with a severe 38.6% drop in March 2020 due to retail closures[178](index=178&type=chunk)[179](index=179&type=chunk) - The segment's operating margin **deteriorated from 2.9% in Q1 2019 to -9.1% in Q1 2020**[178](index=178&type=chunk)[187](index=187&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company bolstered liquidity by drawing on and increasing its credit facility amid declining operating cash flow - To improve financial flexibility, the company **fully drew its $150 million revolving credit facility** and executed a $75 million amendment to increase this line[193](index=193&type=chunk) - The company deferred payroll and tax payments under the CARES Act, expecting an **approximate $12 million cash flow benefit** for 2020[193](index=193&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk exposure related to debt has not materially changed from the prior year-end disclosure - Exposure to market risk **has not changed materially** from the 2019 Form 10-K[203](index=203&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The Chief Executive Officer and Chief Financial Officer believe that **disclosure controls and procedures are effective**[204](index=204&type=chunk) - **No changes in internal control over financial reporting** occurred during Q1 2020 that have materially affected, or are reasonably likely to materially affect, internal controls[205](index=205&type=chunk) [Part II. Other Information](index=42&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation not expected to have a material adverse effect on its business - The company is party to ordinary, routine litigation which is **not expected to have a material adverse effect** on its business, financial condition, or results of operations[206](index=206&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Risk factors are updated to focus on the significant and uncertain impacts of the COVID-19 pandemic - The COVID-19 pandemic is identified as a major risk factor that could continue to have a **material adverse effect** on business, results of operations, and financial condition[209](index=209&type=chunk) - A key vulnerability is that the company's freight is typically **not considered 'essential'**, making it susceptible to slowdowns from stay-at-home orders[211](index=211&type=chunk) - The company acknowledges the negative impact of COVID-19 may require it to record **charges for asset impairments**, including goodwill, in the future[215](index=215&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 268,027 shares for approximately $15.3 million during the first quarter of 2020 Q1 2020 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2020 | 3,791 | $69.65 | | February 2020 | 85,000 | $63.58 | | March 2020 | 179,236 | $54.60 | | **Total** | **268,027** | **$56.93** | - As of March 31, 2020, **3,886,950 shares remained available for repurchase** under the 2019 Repurchase Plan[217](index=217&type=chunk)[95](index=95&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including an amendment to the Credit Agreement and required CEO/CFO certifications - A key exhibit filed is the **First Amendment dated April 16, 2020**, to the Credit Agreement dated September 29, 2017[224](index=224&type=chunk) [Signatures](index=46&type=section&id=Signatures) The report was duly signed by the Chief Financial Officer and Chief Accounting Officer on May 1, 2020 - The report was signed by **Michael J. Morris (Chief Financial Officer)** and **Christina W. Bottomley (Chief Accounting Officer)** on behalf of the registrant[227](index=227&type=chunk)