Forward Air Q1 disrupted by the Towne Air acquisition but underlying results are strong

Forward Air Corporation has reported its financial results for the three months ended March 31, 2015. It reported that operating revenue increased by 20.0% year-on-year to $205.9m. The company also recorded income from operations of $8.3m, a decline of 49.08% year-on-year. Accordingly Forward Air’s margin stood at 4.03%.

The decline in operating income was largely attributable to approximately $11.8m in one-time deal and integration costs associated with the acquisition of Towne Air. What’s more the company’s prior year results include approximately $0.9m of deal costs associated with the purchase of Central States Trucking. Adjusted for these factors income from operations was $20.1m, an increase of 14.43% on the prior-year quarter. Adjusted net income for the period was $12.1m, an increase of 12.03% year-on-year.

Bruce Campbell, Chairman, President, and Chief Executive Officer of Forward Air said, “It’s been an extremely busy six weeks since our March 9th closing of the Towne Air acquisition. I’m pleased to report that our team has made great progress with the integration. Going into this process we recognized that retention of revenue as well as owner operators would be the key elements to our success. Both are proceeding as planned.”

He went on, “Forward Air Solutions, Central States and Total Quality all had respectable first quarter results that positively impacted our bottom line. Solutions turned a profit in a quarter that has historically been break-even at best.”

Rodney Bell, the company’s Senior Vice President and Chief Financial Officer said, “With just over three weeks of Towne revenues represented in the quarter, our revenues increased approximately 20% as compared to the first quarter of 2014. We estimate that approximately $10m of the $34.4m increase in year-over-year revenue is attributable to Towne. We anticipate an additional $3m of integration costs will impact the second quarter.”