Forward Air Corporation Reports Fourth Quarter and Fiscal 2008 Results

Forward Air Corporation (NASDAQ:FWRD) today reported results for the fourth quarter and year ended December 31, 2008.

Operating revenue for the quarter ended December 31, 2008 increased 7.8% to $123.4 million from $114.5 million for the same quarter in 2007. Income from operations was $14.0 million, compared with $20.0 million for the fourth quarter of 2007, a decrease of 30.0%. As a percent of operating revenue, income from operations decreased to 11.3% from 17.5% for the same quarter last year. Net income during the period decreased by $4.1 million, or 32.8%, to $8.3 million from $12.4 million in the fourth quarter of 2007. Net income per diluted share for the fourth quarter of 2008 was $0.29 compared with $0.43 in the same quarter in 2007, a decrease of 32.6%.

Operating revenue for the year ended December 31, 2008 increased 20.8% to $474.4 million from $392.7 million for the same period in 2007. Income from operations was $70.3 million, compared with $71.0 million in the prior-year period, a decrease of 1.0%. As a percent of operating revenue, income from operations decreased to 14.8% for the year ended 2008 from 18.1% in 2007. Net income during the period decreased 5.3% to $42.5 million from $44.9 million in the prior-year period. Net income per diluted share from operations for the year ended 2008 was $1.47 compared with $1.50 for the year ended December 31, 2007, a decrease of 2.0%.

Bruce A. Campbell, Chairman, President, and CEO, said, “As noted in last month's update we experienced an unprecedented decline in demand for our core airport-to-airport freight services during the fourth quarter 2008. This negative trend accelerated throughout the quarter with December volumes declining in excess of 20% from December of 2007. Thus far this year, volumes appear to have stabilized around negative 20% in our core business.”

Commenting further, Mr. Campbell said, “In response to this dramatic decline in volume we have made further reductions in our work force, initiated an across the board salary and wage freeze, curtailed 2009 planned capital spending and continued to attack every expense line item in order to drive meaningful cost reductions. It is important to note that we have taken all of these measures without sacrificing the superior level of service that has differentiated Forward Air from our competitors. This is truly a testament to the dedication of our employees and independent owner operators and they have our sincerest appreciation.”

In commenting on the fourth quarter, Rodney L. Bell, Senior Vice President and CFO, said “In the fourth quarter cash flow from operations was $21.1 million as compared to $18.6 million in the same quarter of 2007 further illustrating the strength of our non-asset model even in the most challenging of economic environments. As mentioned in our update, we ended the year with just over $22 million in cash and $42.2 million available on our $100 million line of credit.”

Commenting further, Mr. Bell said, “We anticipate first quarter year-over-year revenue in our Forward Air, Inc segment to decline between 10 and 15% while we expect revenue in our Forward Air Solutions segment to approximately double primarily on the strength of our two 2008 acquisitions. We anticipate income per diluted share to be between $0.10 and $0.15 per share.”

Review of Financial Results

Forward Air will hold a conference call to discuss fourth quarter 2008 results on Tuesday, February 10, 2009 at 9:00 a.m. EDT. The Company’s conference call will be available online at www.forwardair.com or by dialing 800-841-9385. A replay of the conference call will be available at www.forwardair.com beginning shortly after the completion of the live call.

About Forward Air Corporation

Forward Air Corporation operates two business segments, Forward Air, Inc. and Forward Air Solutions, Inc.

Forward Air, Inc. is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of 82 terminals located on or near major airports in the United States and Canada. It provides these services as a cost-effective alternative to air transportation of cargo that must be delivered at a specific time but is relatively less time-sensitive than traditional air freight or when air transportation is not economical.

Forward Air Solutions, Inc. is a provider of pool distribution services. Pool distribution involves the consolidation and shipment of several smaller less-than-truckload shipments to a common area or region. Once at the regional destination, the loads are deconsolidated, then grouped with other shipments with common delivery points, and delivered in a very precise, time-sensitive manner. Our pool distribution network consists of 20 terminals within the Mid-Atlantic, Southeast, Midwest and Southwestern United States.

Important Information

This press release contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or our future financial performance. Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, our inability to maintain our historical growth rate because of a decreased volume of freight moving through our network or decreased average revenue per pound of freight moving through our network, increasing competition and pricing pressure, surplus inventories, loss of a major customer, the creditworthiness of our customers and their ability to pay for services rendered, our ability to secure terminal facilities in desirable locations at reasonable rates, the inability of our information systems to handle an increased volume of freight moving through our network, changes in fuel prices, claims for property damage, personal injuries or workers’ compensation, employment matters including rising health care costs, enforcement of and changes in governmental regulations, environmental and tax matters, the handling of hazardous materials, the availability and compensation of qualified independent owner-operators and freight handlers needed to serve our transportation needs and our inability to successfully integrate acquisitions. As a result of the foregoing, no assurance can be given as to future financial condition, cash flows or results of operations. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.