Forward Air Corporation · NASDAQ:FWRD
Forward Air — Investor Presentation (June 2019)
41 slides from Forward Air's investor presentation, Jun 25, 2019
Slide 1: Think Forward Investor Presentation June 2019
When it’s bigger than a box and it really matters, “Think Forward” Investor Presentation June 2019 NASDAQ:FWRD www.ForwardAirCorp.com
Slide 2: Forward Looking Statements Disclosure
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 identif
Slide 3: History
History Origins: Expedited Ground Alternative to Airline Linehaul 1981 – Landair Services “Time definite Truckload services for the air cargo industry” Asset-based Truckload 1990 – Forward Air Operations “Scheduled LTL services to air freight forwarders, air cargo carriers & airlines” of Landair Ser
Slide 4: Grounding Air Freight
Grounding Air Freight Simple Concept: Grounding an Airline Freight Move Benefits Cheaper On Time Less Carbon Emissions 4
Slide 5: Precision Execution
Precision Execution 38 Years of A2A Experience Trained Our Precision Execution “Muscle” Expedited Services Scheduled Network Tight Time Windows A2A Premium Handling Precision Execution Asset Light 5
Slide 6: Muscle Development
Muscle Development Training, Developing and Building Customer Trust in Our Precision Execution “The 10,000 hours rule says that if you look Trained our precision execution muscle for over 30 years at any kind of cognitively complex field, doing what we do best over a million times from playing chess
Slide 7: Forward Air Portfolio
Forward Air Portfolio Stretching this Muscle to Other Modes LTL Pickup & Delivery Final Mile Intermodal Drayage A2A Expedited Truckload Precision Execution Pool Distribution 7
Slide 8: LTL Footprint
LTL Footprint 2 “f Montreal, QC, Canada P 7 ’ i) 9 9 O99 8 CC) °° @ oe Se ° B g g %e 9 e9 ° . e 6 rf % @ % @ @%@% 6% ole |? ~es : ¢ o ¢@ 9 ¢ ° C) . °°
Slide 9: LTL Footprint with Pickup and Delivery
LTL Footprint with Pickup and Delivery 9
Slide 10: Final Mile Footprint
Final Mile Footprint 7 8 % 9 9 ° OF. ° 9 e Bw . @ oo : Ko) %@ 9 9 We ied 9 gy a? 9 oY 9 % 2. 10
Slide 11: Intermodal Footprint
Intermodal Footprint OQ. "1
Slide 12: TLS Footprint
TLS Footprint 2. 12
Slide 13: Pool Distribution Footprint
Pool Distribution Footprint 13
Slide 14: New Forward Air
New Forward Air When it is bigger than a box and it really matters, “Think Forward” 14
Slide 15: Forward Air Footprint
Forward Air Footprint 2 F 8 @ ® 9 9 es 1S) LTL 8 1S) LTL with PUD S ® @ Final Mile v 9 @ Intermodal @ TLS @ POOL @® 5 15
Slide 16: Mega Trends
Mega Trends Supply Chain Trends Increasingly Demand Precision Execution E-Commerce Final Mile Precision Omni Growth Execution Channel Regional Supply Chain 16
Slide 17: Addressable Market
Addressable Market Significant Opportunity for Future Growth Source: Studies performed by Tompkins International and SJ Consulting LTM Business Unit Revenue TAM TAM Comments $M at 3/31/19 $M Expedited LTL 756 5,500 $1,500 traditional A2A + $4,000 3PL Intermodal 207 7,100 Midwest + SE region Truckloa
Slide 18: Operating Model
Operating Model Driven By Teams that Focus on What They Do Best Growth Management Compete Sales Pricing Business Development Collectively Marketing Customer Service Expedited LTL Intermodal Truckload Pool Focused LTL Operations Operations Operations Operations Factories Final Mile Operations Shared
Slide 19: Management Team
Management Team Seasoned Leadership Team Tom Schmitt As of September 1, 2018 Chairman, President and CEO Previous: Schenker AG, Purolator, FedEx Matt Casey 1 year with Forward Air SVP, Safety Previous: Forest City Technologies, Panther Premium Logistics Michael Hance 12 years with Forward Air Chief
Slide 20: Social Responsibility
Social Responsibility SAFETY SUSTAINABILITY COMMUNITY/SOCIAL Applying innovation and Implementing new practices and Donating time, materials and enhanced safety practices to technologies to incorporate financial resources to support drive safer operating sustainability objectives in our the communit
Slide 21: Financial Overview
Financial Overview
Slide 22: 2018 Results
2018 Results Record Year Across Every Major Financial Metric ($M except per share) 2017 2018 % Change Revenue 1,169.3 1,320.9 13.0% Operating Income 108.8 122.0 12.1% Net Income 87.3 92.1 5.5% EPS $2.89 $3.12 8.0% EBITDA 149.9 164.2 9.5% Free Cash Flow 67.6 117.3 73.5% Note: EBITDA and Free Cash Flo
Slide 23: 1Q19 Results
1Q19 Results Record First Quarter Across Every Major Financial Metric ($M except per share) 1Q18 1Q19 % Change Revenue 302.6 321.5 6.2% Operating Income 24.2 24.7 2.1% Net Income 17.7 18.4 4.0% EPS $0.60 $0.64 6.7% EBITDA 34.9 35.5 1.7% Free Cash Flow 35.2 37.8 7.4% Note: EBITDA and Free Cash Flow a
Slide 24: LTM Results
LTM Results ($M except per share) LTM 2018 2017 Revenue 1,339.8 1,320.9 1,169.3 Operating Income 122.5 122.0 108.8 Net Income 92.6 92.1 87.3 EPS $3.17 $3.12 $2.89 EBITDA 164.9 164.2 149.9 Free Cash Flow 119.9 117.3 67.6 Debt / EBITDA 0.3 x 0.3 x 0.3 x ROIC 16.3% 16.2% 13.4% Note:EBITDA and Free Cash
Slide 25: Summary Financials
Summary Financials Double Digit Growth Rates This Decade 1 1 Revenue EBIT (CAGR = 13%) (CAGR = 11%) 1,400 125 1,200 1,000 100 GAAP) 800 GAAP) - 75 - 600 50 400 $M $M (non 200 $M (non 25 - 3 - 3,4 5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018 1,2 EBITDA E
Slide 26: Cash Flow
Cash Flow Strong Free Cash Flow and Conversion 125 160% High cash flow business 140% model 100 . Operating leverage without 120% capital expenditure intensity 100% 75 5-year average free cash 80% flow conversion of 102% GAAP) - 50 60% . Swings driven primarily by working capital from Conversion ($M
Slide 27: Capital Returned to Shareholders
Capital Returned to Shareholders Commitment to Return Capital to Shareholders Shareholder Returns Dividends Share Repurchase 90 80 70 60 50 $M 40 30 20 10 - 2014 2015 2016 2017 2018 27
Slide 28: Appendix
Appendix
Slide 29: LTL: Operations Overview
LTL: Operations Overview 2018 OPERATIONS Terminals 92 PUD Zip Codes 92% Tractors ~1,350 Trailers ~4,200 Employees ~2,700 Owner-Operators ~900 Daily Lbs. 10M Daily Lanes Served ~8,200 Daily Shipments ~16,400 Lbs. per Shipment 614 Warehouse Space (sq. ft.) 3.4M 29
Slide 30: LTL: Final Mile
LTL: Final Mile Entered market with 2015 Towne acquisition . Small final mile operation, serving 4 markets and generating $13M in annualized revenue Grew organically to 8 markets generating $39M in revenue in 2018 Operated at LTL-like margins Significantly expanded footprint with FSA Logistix acquis
Slide 31: LTL: Financial Overview
LTL: Financial Overview Revenue1 EBIT 1 (CAGR = 11%) (CAGR = 5%) 800 120 700 100 600 80 500 GAAP) GAAP) - 400 - 60 300 $M $M (non $M $M (non 40 200 20 100 - - 3 3,4 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2018 Results 2 2 2 Revenue EBIT EBIT Margin EBITDA EBITDA Margin $747.6 M $
Slide 32: Intermodal: Operations Overview
Intermodal: Operations Overview 2018 OPERATIONS Terminals 22 Tractors ~220 Trailers ~175 Chassis ~370 Employees ~670 Owner-Operators ~725 Daily Shipments ~1,200 CFS Space (sq. ft.) 184k Yards 25 32
Slide 33: Intermodal: Financial Overview
Intermodal: Financial Overview Revenue1 EBIT 1 (CAGR = 24%) (CAGR = 34%) 225 25 200 175 20 150 15 125 100 (GAAP) 10 $M $M (GAAP) 75 $M 50 5 25 - - 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2018 Results 2 2 Revenue EBIT EBIT Margin EBITDA EBITDA Margin $201.0 M $23.3 M 11.6% $29.6 M 14.7% 1 I
Slide 34: Truckload: Operations Overview
Truckload: Operations Overview 2018 OPERATIONS Tractors ~300 Trailers: Dry Van ~1,100 Trailers: Reefer ~50 Employees ~200 Owner-Operators ~225 Broker Carriers ~5,150 Weekly Loads ~1,900 34
Slide 35: Truckload: Financial Overview
Truckload: Financial Overview Revenue 1 EBIT 1 (CAGR = 10%) (CAGR = -13%) 225 14 200 12 175 10 150 ) 8 125 GAAP) - (GAAP 100 6 $M $M 75 $M $M (non 4 50 25 2 - - 5 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2018 Results 2 Revenue EBIT EBIT Margin EBITDA 2 EBITDA Margin $192.6 M $5.1
Slide 36: Pool: Operations Overview
Pool: Operations Overview 2018 OPERATIONS Terminals / Locations 36 Power Units ~700 Trailers ~650 Employees ~1,450 Owner-Operators ~350 Daily Deliveries ~3,500 Daily Carton Sorts ~600k Warehouse Space (sq. ft.) 1.7M 36
Slide 37: Pool: Solutions Overview
Pool: Solutions Overview 6 Separate LTL or Parcel Shipments Weekly Delivery to Stores Parcel Service P Center / Hub LTL Terminal Store 1 T LTL Terminal T T T T LTL Terminal Store 2 T T LTL Terminal Store 3 P P Parcel Store 4 Origin DC P P Parcel Store 5 P P Parcel Store 6 37
Slide 38: Pool: Solutions Overview
Pool: Solutions Overview Daily Delivery to Stores Store 1 Store 2 Single TL Shipment Store 3 TL Store 4 Origin DC Pool Facility Store 5 Store 6 38
Slide 39: Pool: Financial Overview
Pool: Financial Overview Revenue1 EBIT 1 (CAGR = 11%) (CAGR = 23%) 225 7 200 6 175 5 150 125 4 100 3 $M $M (GAAP) 75 $M (GAAP) 2 50 25 1 - - 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2018 Results 2 2 Revenue EBIT EBIT Margin EBITDA EBITDA Margin $194.1 M $5.9 M 3.0% $12.8 M 6.6% 1
Slide 40: GAAP vs Non-GAAP Reconciliation
GAAP vs Non-GAAP Reconciliation $ in millions, shares in 000s GAAP Revenue Reconciliation Q1 2019 Q1 2018 2018 2017 2016 2015 2014 2013 2012 2011 2010 Segment EBITDA GAAP Revenue 321.5 302.6 1,320.9 1,169.3 1,030.2 987.9 824.7 672.2 603.9 557.4 494.0 Reconciliation Towne Integration - - - - - 0.6 -
Slide 41: Thank You For Your Time
Thank You For Your Time Investor Relations Contact: Mike Morris, CFO & Treasurer mmorris@forwardair.com (404) 362-8933