What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-10 compared with 2022-11-09 · 161 added, 408 removed, 349 unchanged (62% of the section changed)

3 unchanged sentences

(unaudited and in thousands, except share and per share amounts)

September 30,

2023 December 31,

3 unchanged sentences

201,385 221,028

Other receivables, less allowance of $ 235 in 2022 and $ — in 2021

Other current assets 24,381 37,465

37 unchanged sentences

Three Months Ended

September 30,

2022 September 30,

Operating revenues $ 510,023 $ 419,625

Operating expenses:

Purchased transportation 229,326 205,474

Salaries, wages and employee benefits 90,755 84,410

Operating leases 24,965 20,536

Depreciation and amortization 12,269 9,416

Insurance and claims 12,093 9,984

Fuel expense 6,772 4,457

Other operating expenses 62,178 42,872

Total operating expenses 438,358 377,149

Income from continuing operations 71,665 42,476

Other expense:

Interest expense ( 1,544 ) ( 973 )

Total other expense ( 1,544 ) ( 973 )

Income before income taxes 70,121 41,503

Income tax expense 17,988 11,000

Net income from continuing operations 52,133 30,503

Loss from discontinued operation, net of tax — ( 6,967 )

Net income and comprehensive income $ 52,133 $ 23,536

Basic net income (loss) per share

Continuing operations $ 1.94 $ 1.12

Discontinued operation — ( 0.26 )

Net income per basic share $ 1.94 $ 0.86

Diluted net income (loss) per share

Continuing operations $ 1.93 $ 1.12

Discontinued operation — ( 0.26 )

Net income per diluted share $ 1.93 $ 0.86

Dividends per share $ 0.24 $ 0.21

The accompanying notes are an integral part of the condensed consolidated financial statements.

Forward Air Corporation

Condensed Consolidated Statements of Comprehensive Income

(unaudited and in thousands, except per share amounts)

Nine Months Ended

September 30,

2022 September 30,

2023 March 31,

Operating revenues $ 427,066 $ 466,961

8 unchanged sentences

Total operating expenses 376,557 409,610

Income from continuing operations 204,561 107,324

Income from operations 50,509 57,351

Other expense:

Interest expense ( 3,521 ) ( 3,461 )

Interest expense, net ( 2,355 ) ( 784 )

Total other expense ( 2,355 ) ( 784 )

1 unchanged sentence

Income tax expense 11,786 13,881

Net income from continuing operations 150,249 77,894

Loss from discontinued operation, net of tax — ( 12,500 )

Net income and comprehensive income $ 36,368 $ 42,686

Basic net income (loss) per share

Continuing operations $ 5.56 $ 2.84

Discontinued operation — ( 0.46 )

Net income per basic share 1

$ 5.56 $ 2.39

Diluted net income (loss) per share

Continuing operations $ 5.53 $ 2.83

Discontinued operation — ( 0.46 )

Net income per diluted share $ 5.53 $ 2.37

Net income per share

Basic $ 1.37 $ 1.57

Diluted $ 1.37 $ 1.57

Dividends per share $ 0.24 $ 0.24

1 Rounding may impact summation of amounts.

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

(unaudited and in thousands)

Nine Months Ended

September 30,

2022 September 30,

Three Months Ended

2023 March 31,

Operating activities:

Net income from continuing operations $ 150,249 $ 77,894

Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations

Net income from operations $ 36,368 $ 42,686

Adjustments to reconcile net income from operations to net cash provided by operating activities

Depreciation and amortization 13,635 11,130

2 unchanged sentences

Provision for revenue adjustments 2,157 1,304

Deferred income tax expense (benefit) 1,962 ( 1,384 )

Deferred income tax expense 1,857 1,643

Other ( 300 ) 132

3 unchanged sentences

Other current and noncurrent assets 11,422 13,818

Accounts payable, accrued expenses and other long-term liabilities 21,773 19,577

Net cash provided by operating activities of continuing operations 196,814 82,752

Accounts payable and accrued expenses ( 18,964 ) 15,975

Net cash provided by operating activities 65,993 62,486

Investing activities:

2 unchanged sentences

Purchases of a business, net of cash acquired ( 56,567 ) —

Net cash used in investing activities of continuing operations ( 64,411 ) ( 43,729 )

Net cash used in investing activities ( 61,541 ) ( 9,397 )

Financing activities:

2 unchanged sentences

Payments on credit facility — ( 375 )

Payment of debt issuance costs — ( 119 )

Payment of earn-out liability ( 91 ) ( 6,519 )

Proceeds from issuance of common stock upon stock option exercises — 206

1 unchanged sentence

Repurchases and retirement of common stock ( 50,491 ) ( 17,780 )

Proceeds from common stock issued under employee stock purchase plan 374 388

Payment of minimum tax withholdings on share-based awards ( 4,292 ) ( 3,254 )

Contributions from subsidiary held for sale — 1,118

Net cash used in financing activities from continuing operations ( 122,873 ) ( 27,347 )

Net increase in cash and cash equivalents of continuing operations 9,530 11,676

Cash from discontinued operation:

Net cash used in operating activities of discontinued operation — ( 6,902 )

Net cash provided by investing activities of discontinued operation — 8,020

Net cash used in financing activities of discontinued operation — ( 1,118 )

Net increase in cash and cash equivalents 9,530 11,676

Cash and cash equivalents at beginning of period of continuing operations 37,316 40,254

Cash at beginning of period of discontinued operation — —

Net increase in cash and cash equivalents 9,530 11,676

cash at end of period of discontinued operation — —

Cash and cash equivalents at end of period of continuing operations $ 46,846 $ 51,930

Net cash used in financing activities ( 18,246 ) ( 28,775 )

Net (decrease) increase in cash and cash equivalents ( 13,794 ) 24,314

Cash and cash equivalents at beginning of period 45,822 37,316

Cash and cash equivalents at end of period $ 32,028 $ 61,630

The accompanying notes are an integral part of the condensed consolidated financial statements.

7 unchanged sentences

Net income — — — 36,368 36,368

Stock options exercised 3 — 206 — 206

Share-based compensation expense — — 3,149 — 3,149

4 unchanged sentences

Balance at March 31, 2023 26,053 $ 261 $ 274,007 $ 411,365 $ 685,633

Net income — — — 55,430 55,430

Common stock issued under employee stock purchase plan 5 — 374 — 374

Share-based compensation expense — — 3,306 — 3,306

Payment of dividends to shareholders — — 5 ( 6,497 ) ( 6,492 )

Payment of minimum tax withholdings on share-based awards ( 1 ) — — ( 39 ) ( 39 )

Issuance of share-based awards 14 — — — —

Balance at June 30, 2022 26,880 $ 269 $ 265,129 $ 398,952 $ 664,350

Net income — — — 52,133 52,133

Share-based compensation expense — — 2,676 — 2,676

Payment of dividends to shareholders — — 4 ( 6,471 ) ( 6,467 )

Repurchases and retirement of common stock ( 290 ) ( 3 ) — ( 29,991 ) ( 29,994 )

Balance at September 30, 2022 26,590 $ 266 $ 267,809 $ 414,623 $ 682,698

Common Stock Additional Paid-in

10 unchanged sentences

Balance at March 31, 2022 26,862 $ 269 $ 261,444 $ 350,058 $ 611,771

Net income — — — 30,677 30,677

Stock options exercised 26 — 1,416 — 1,416

Common stock issued under employee stock purchase plan 5 — 388 — 388

Share-based compensation expense — — 2,981 — 2,981

Payment of dividends to shareholders — — 3 ( 5,771 ) ( 5,768 )

Payment of minimum tax withholdings on share-based awards ( 1 ) — — ( 82 ) ( 82 )

Repurchases and retirement of common stock ( 252 ) ( 2 ) — ( 23,992 ) ( 23,994 )

Issuance of share-based awards 24 — — — —

Balance at June 30, 2021 27,120 $ 271 $ 252,466 $ 297,612 $ 550,349

Net income — — — 23,536 23,536

Share-based compensation expense — — 2,601 — 2,601

Payment of dividends to shareholders — — 4 ( 5,709 ) ( 5,705 )

Payment of minimum tax withholdings on share-based awards ( 3 ) — — ( 248 ) ( 248 )

Repurchases and retirement of common stock ( 169 ) ( 1 ) — ( 14,996 ) ( 14,997 )

Issuance of share-based awards 10 — — — —

Balance at September 30, 2021 26,958 $ 270 $ 255,071 $ 300,195 $ 555,536

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

(unaudited and in thousands, except per share data)

September 30, 2022

March 31, 2023

Description of Business and Basis of Presentation

3 unchanged sentences

Expedited Freight and Intermodal.

The Company conducts business in the United States and Canada.

The Company conducts business in the United States, Canada, and Mexico.

The Expedited Freight segment provides expedited regional, inter-regional and national less-than-truckload (“LTL ” ), truckload and final mile services.

Expedited Freight also offers customers local pick-up and delivery and other services including shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.

Expedited Freight also offers customers local pick-up and delivery and other services including shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services.

The Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads.

7 unchanged sentences

Results for interim periods are not necessarily indicative of the results for the year.

On April 23, 2020, the Board of Directors (the “Board ”) of the Company approved a strategy to divest the Pool Distribution business (“Pool ” ), and the sale of Pool was completed on February 12, 2021.

Pool provided high-frequency handling and distribution of time sensitive product to numerous destinations within a specific geographic region.

As a result of the strategy to divest of Pool, the results of operations for Pool were presented as a discontinued operation in the Condensed Consolidated Statements of Comprehensive Income for the prior period.

Unless otherwise noted, amounts, percentages and discussion for the prior period reflect the results of operations, financial condition and cash flows from the Company’s continuing operations.

Refer to Note 3, Discontinued Operation , for further discussion.

Revenue Recognition

8 unchanged sentences

The determination of the transit period and how much of it has been completed as of a given reporting date may require the Company to make judgments that impact the timing of revenue recognized.

For delivery of shipments with a pick-up date in one reporting period and a delivery date in another reporting period, the Company recognizes revenue based on relative transit

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

time in each reporting period.

For delivery of shipments with a pick-up date in one reporting period and a delivery date in another reporting period, the Company recognizes revenue based on relative transit time in each reporting period.

A portion of the total revenue to be billed to the customer after completion of a delivery is recognized in each reporting period based on the percentage of total transit time that has been completed at the end of the applicable reporting period.

2 unchanged sentences

Revenue is classified based on the line of business as the Company believes that best depicts the nature, timing and amount of revenue and cash flows.

For all lines of business, the Company records revenue on a gross basis as it is the principal in the transaction as the Company has discretion to determine the amount of consideration.

Additionally, the Company has the discretion to select drivers and other vendors for the services provided to customers.

These factors, discretion in the amount of consideration and the selection of drivers and other vendors, support revenue recognized on a gross basis.

Discontinued Operation

As previously disclosed, on April 23, 2020, the Company made a decision to divest of Pool and the sale was completed on February 12, 2021.

As a result, the results of Pool were classified to “Loss from discontinued operation, net of tax” in the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021.

Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operation and were allocated to continuing operations.

These costs were classified to the eliminations column in the segment reconciliation in Note 13, Segment Reporting .

Transition Services Agreement

On February 12, 2021, the Company entered into a Transition Services Agreement (“TSA ” ) with TOG FAS Holdings LLC, the buyer of the Pool business.

Under the TSA, the Company performed certain services on an interim basis in order to facilitate the orderly transition of the Pool business.

The effective date of the TSA was February 12, 2021 and remained in effect until the date all services were completed, but no more than six months following the effective date.

The TSA provided the right to extend the term of the TSA with no limit on the number of the mutually agreed upon extensions.

In exchange for the services performed by the Company under the TSA, the Company received a monthly service charge.

For the three and nine months ended September 30, 2021, the Company recognized $ 229 and $ 641 , respectively, in “Other operating expenses ” in the Condensed Consolidated Statements of Comprehensive Income, for the services performed under the TSA.

The TSA ended in October 2021 when all services were completed.

Additionally, under the TSA, the Company remitted payments to outside vendors on behalf of TOG FAS Holdings LLC for expenses incurred by the Pool business up to a limit of $ 18,000 .

The Company was reimbursed by TOG FAS Holdings LLC within 60 days from the end of the month in which the payment was remitted.

As of September 30, 2022 and December 31, 2021, the Company recorded a net receivable in the amount of zero and $ 8,097 respectively, in “Other receivables ” in the Condensed Consolidated Balance Sheets for the reimbursement due to the Company.

The Company evaluates the collectability of the receivable at least quarterly and if the Company is aware of the inability of TOG FAS Holdings LLC to meet its financial obligations to the Company, the Company will record a specific reserve in order to reduce the receivable to the amount the Company reasonably believes will be collected.

As of September 30, 2022, the Company recorded a specific reserve in the amount of $ 235 in order to reduce the receivable to an amount the Company reasonably believes will be collected.

For all lines of business, the Company records revenue on a gross basis as it is the principal

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

September 30, 2022

Summarized Discontinued Operation Financial Information

A summary of the results of operations classified as a discontinued operation, net of tax, in the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 is as follows:

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021

Operating revenue $ — $ 17,087

Operating expenses:

Purchased transportation — 4,290

Salaries, wages and employee benefits — 9,674

Operating leases — 2,907

Depreciation and amortization — —

Insurance and claims — 929

Fuel expense — 644

Other operating expenses — 2,087

Impairment charge 6,967 6,967

Total operating expenses 6,967 27,498

Loss from discontinued operation ( 6,967 ) ( 10,411 )

Loss on sale of business — ( 2,860 )

Loss from discontinued operation before income taxes ( 6,967 ) ( 13,271 )

Income tax benefit — ( 771 )

Loss from discontinued operation, net of tax $ ( 6,967 ) $ ( 12,500 )

March 31, 2023

in the transaction as the Company has discretion to determine the amount of consideration.

Additionally, the Company has the discretion to select drivers and other vendors for the services provided to customers.

These factors, discretion in the amount of consideration and the selection of drivers and other vendors, support revenue recognized on a gross basis.

Expedited Freight Acquisitions

In January 2023, the Company acquired certain assets of Land Air Express, Inc.

(“Land Air”) for $ 56,567 .

Land Air, headquartered in Bowling Green, Kentucky, offers a variety of less-than-truckload services including guaranteed, standard, exclusive, same day, hot shot and pickup and delivery, and operates in over 25 terminals across the United States.

The acquisition of Land Air will accelerate the expansion of the Company's national terminal footprint, particularly in the middle part of the United States, and is expected to strategically position the Company to better meet the current and future needs of customers.

The acquisition was funded using cash flow from operations and proceeds from the Company's credit facility.

The results of Land Air have been included in the Company ’ s Condensed Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company's Expedited Freight reportable segment.

Intermodal Acquisitions

In February 2021, the Company acquired certain assets and liabilities of Proficient Transport Incorporated and Proficient Trucking, Inc.

(together “Proficient Transport ” ) for $ 16,339 and a potential earn-out of up to $ 2,000 .

The purchase agreement for Proficient Transport included an earn-out up to $ 2,000 based on the achievement of certain revenue milestones over a one-year period, beginning March 1, 2021.

The estimated fair value of the earn-out liability on the date of acquisition was $ 829 .

The fair value was based on the estimated one-year performance of the acquired customer revenue and was calculated using the option pricing method.

The fair value of the earn-out liability was adjusted at each reporting period based on changes in the expected cash flows and related assumptions used in the option pricing method.

During the three and nine months ended September 30, 2022, the fair value of the earn-out changed by zero and ($ 294 ) respectively, and the change in fair value was recorded in “Other operating expenses” in the Condensed Consolidated Statements of Comprehensive Income.

During the three and nine months ended September 30, 2021, the fair value of the earn-out changed by zero and ($ 333 ) respectively, and the change in fair value was recorded in “Other operating expenses” in the Condensed Consolidated Statements of Comprehensive Income .

The one-year period ended in the first quarter of 2022 and the Company paid $ 91 in the second quarter of 2022 based on the terms of the purchase agreement.

As of December 31, 2021, the fair value of the earn-out liability was $ 385 , which was reflected in “Other cur rent liabilities” in the Condensed Consolidated Balance Sheets.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

In November 2021, the Company acquired certain assets and liabilities of BarOle Trucking, Inc.

( “BarOle”) for $ 35,436 .

BarOle is an intermodal drayage company headquartered in Roseville, Minnesota.

The acquisition of BarOle provides additional capacity and resources to meet customer demands in the intermodal market, and extends the service footprint to the Minneapolis-Saint Paul, Minnesota area.

In addition, BarOle has a larger terminal location, which allows for further expansion in the future.

The acquisition was financed by cash flows from operations.

The results of BarOle have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s Intermodal reportable segment.

In May 2022, the Company acquired certain assets and liabilities of Edgmon Trucking, LLC (“Edgmon”) for $ 40,993 and a potential earn-out of up to $ 5,000 , based on the achievement of certain profit contribution milestones over a nineteen month period, beginning May 31, 2022.

The estimated fair value of the earn-out liability on the date of acquisition was immaterial.

The fair value was based on the estimated certain profit contribution during the nineteen month period and was calculated using the option pricing method.

Edgmon, headquartered in Kent, Washington, operates a terminal in Kent and a yard in Seattle, servicing both the Port of Seattle and the Port of Tacoma.

The acquisition of Edgmon marks the Company’s first Intermodal location on the West Coast, a key area of expansion in the Intermodal strategic growth plan.

The acquisition was financed by cash flows from operations.

The acquisition was funded using cash flows from operations.

The results of Edgmon have been included in the Company’s Condensed Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s Intermodal reportable segment.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

March 31, 2023

Fair Value of Assets Acquired and Liabilities Assumed

Assets acquired and liabilities assumed as of the acquisition date are presented in the following table:

BarOle Edgmon

November 30, 2021 May 30, 2022

Edgmon Land Air

May 31, 2022 January 31, 2023

Tangible assets:

12 unchanged sentences

Net assets acquired $ 40,993 $ 56,567

The preliminary purchase price for BarOle and Edgmon has been allocated to assets acquired and liabilities assumed based on the Company’s best estimates and assumptions using the information available as of the acquisition date through the date of this filing.

The provisional measurements of identifiable assets and liabilities, and the resulting goodwill related to these acquisitions, are subject to adjustments in subsequent periods as the Company finalizes its purchase price allocations, including the third-party valuations.

During the nine months ended September 30, 2022, the Company recorded measurement period adjustments to the provisional amounts initially recorded for acquired property and equipment and acquired customer relationships and non-compete agreements related to the BarOle acquisition.

The measurement period adjustments resulted in a $ 1,113 increase to acquired property and equipment and a combined $ 5,854 decrease to acquired customer relationships and non-compete agreements, with a corresponding net increase to goodwill.

The Company expects to finalize the valuations as soon as practicable, but no later than one year from the respective acquisition dates.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

The estimated useful lives of acquired intangible assets as of the acquisition date are summarized in the following table:

The preliminary purchase price for Edgmon and Land Air have been allocated to assets acquired and liabilities assumed based on the the Company’s best estimates and assumptions using the information available as of the acquisition date through the date of this filing.

The provisional measurements of identifiable assets and liabilities, and the resulting goodwill related to these acquisitions are subject to adjustments in subsequent periods as the Company finalizes its purchase price allocation, including the third-party valuations.

The Company expects to finalize the valuations as soon as practicable, but no later than one year from the acquisition date.

The estimated useful life of acquired intangible assets as of the acquisition date are summarized in the following table:

Estimated Useful Lives

BarOle Edgmon

Edgmon Land Air

Customer relationships 9 years 12 years

Non-compete agreements 5 years 5 years

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

March 31, 2023

Goodwill and Intangible Assets

Changes in the carrying amount of goodwill during the nine months ended September 30, 2022 are summarized as follows:

Changes in the carrying amount of goodwill during the three months ended March 31, 2023 are summarized as follows:

Expedited Freight Intermodal Consolidated

1 unchanged sentence

Acquisition 50,443 — 50,443

Acquisition adjustment — 4,741 4,741

Balance as of September 30, 2022 $ 169,288 $ 119,208 $ 288,496

Balance as of March 31, 2023 $ 219,731 $ 136,896 $ 356,627

The Company ’ s accumulated goodwill impairment is $ 25,686 related to impairment charges the Company recorded during 2016 pertaining to its Truckload Services reporting unit.

The Truckload Services reporting unit operates within the Expedited Freight reportable segment.

As of September 30, 2022, approximately $ 209,353 of goodwill is deductible for tax purposes.

As of March 31, 2023, approximately $ 277,484 of goodwill is deductible for tax purposes.

Goodwill is tested for impairment on an annual basis and more often if indications of impairment exist.

The Company conducts its annual impairment analyses as of June 30 each year.

There have been no indicators of impairment during the three months ended September 30, 2022.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

There have been no indicators of impairment during the three months ended March 31, 2023.

Other Intangible Assets

Changes in the carrying amount of acquired intangible assets during the nine months ended September 30, 2022 are summarized as follows:

Changes in the carrying amount of acquired intangible assets during the three months ended March 31, 2023 are summarized as follows:

Gross Carrying Amount

3 unchanged sentences

Acquisition 4,513 873 — 5,386

Acquisition adjustment ( 5,162 ) ( 692 ) — ( 5,854 )

Balance as of September 30, 2022 $ 264,165 $ 8,949 $ 1,500 $ 274,614

Balance as of March 31, 2023 $ 272,383 $ 9,629 $ 1,500 $ 283,512

Accumulated Amortization

3 unchanged sentences

Amortization expense 4,306 155 — 4,461

Balance as of September 30, 2022 $ 110,600 $ 7,353 $ 1,500 $ 119,453

1 Carrying value as of September 30, 2022 and December 31, 2021 is inclusive of $ 16,501 of accumulated impairment.

Balance as of March 31, 2023 $ 118,686 $ 7,600 $ 1,500 $ 127,786

1 Carrying value as of March 31, 2023 and December 31, 2022 is inclusive of $ 16,501 of accumulated impairment.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

March 31, 2023

Stock Incentive Plans

Stock Incentive Plan

The Company recorded share-based compensation expense as follows for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended Nine Months Ended

September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Salaries, wages and employee benefits - continuing operations $ 2,355 $ 2,283 $ 7,661 $ 7,015

Salaries, wages and employee benefits - discontinued operation — — — 16

The Company recorded share-based compensation expense as follows for the three months ended March 31, 2023 and 2022:

Three Months Ended

2023 March 31,

Total share-based compensation expense $ 2,810 $ 2,422

In May 2016, the Company adopted the 2016 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) for the issuance of up to 2,000 common shares to employees.

As of September 30, 2022, appro ximately 693 s hares remain available for grant under the Omnibus Plan.

As of March 31, 2023, appro ximately 564 shares remain available for grant under the Omnibus Plan.

Stock Options

3 unchanged sentences

The Company estimates the fair value of the grants using the Black-Scholes option-pricing model.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

Stock option transactions during the nine months ended September 30, 2022 on a continuing operations basis were as follows:

Stock option transactions during the three months ended March 31, 2023 were as follows:

Stock Options Weighted-Average Exercise Price

3 unchanged sentences

Forfeited ( 61 ) 44.97

Outstanding as of September 30 397 $ 65.32

As of September 30, 2022, the total share-based compensation expense related to unvested stock options not yet recognized was $ 1,687 , and the weighted-average period over which it is expected to be recognized is approximately two years .

Outstanding as of March 31 370 $ 76.91

As of March 31, 2023, the total share-based compensation expense related to unvested stock options not yet recognized was $ 3,316 , and the weighted-average period over which it is expected to be recognized is approximately two years .

Restricted Shares

3 unchanged sentences

Share-based compensation expense associated with these awards is amortized ratably over the requisite service period.

Restricted share transactions during the nine months ended September 30, 2022 on a continuing operations basis were as follows:

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

March 31, 2023

Restricted share transactions during the three months ended March 31, 2023 were as follows:

Restricted Shares Weighted-Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 2 ) 103.36

Outstanding as of September 30 155 $ 87.42

As of September 30, 2022, the total share-based compensation expense related to restricted shares not yet recognized was $ 9,402 , and the weighted-average period over which it is expected to be recognized is approximately two years .

Outstanding as of March 31 151 $ 104.74

As of March 31, 2023, the total share-based compensation expense related to restricted shares not yet recognized was $ 14,613 , and the weighted-average period over which it is expected to be recognized is approximately two years .

Performance Awards

4 unchanged sentences

The Company estimates the fair value of the grants with a financial target based on the Company’s total shareholder return using a Monte Carlo simulation model.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

Performance award transactions during the nine months ended September 30, 2022 on a continuing operations basis were as follows assuming target levels of performance:

Performance award transactions during the three months ended March 31, 2023 were as follows assuming target levels of performance:

Performance Awards Weighted-Average Grant Date Fair Value

1 unchanged sentence

Granted 18 120.27

Additional shares awarded based on performance 4 68.75

Earned ( 31 ) 69.10

Forfeited or unearned — —

Outstanding as of September 30 70 $ 87.74

As of September 30, 2022, the total share-based compensation expense related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was $ 3,448 , and the weighted-average period over which it is expected to be recognized is approximately two years .

Outstanding as of March 31 61 $ 105.95

As of March 31, 2023, the total share-based compensation expense related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was $ 4,345 , and the weighted-average period over which it is expected to be recognized is approximately two years .

Employee Stock Purchase Plan

2 unchanged sentences

Common stock purchases are paid for through periodic payroll deductions and/or up to two large lump sum contributions.

Employee stock purchase plan activity and related information was as follows on a continuing operations basis:

Nine Months Ended

September 30,

2022 September 30,

Shares purchased by participants under the ESPP 5 5

Average purchase price $ 82.76 $ 68.76

Weighted-average fair value of each purchase right under the ESPP granted¹ $ 9.20 $ 20.99

Share-based compensation expense for ESPP $ 42 $ 118

¹ Equal to the discount from the market value of the common stock at the end of each six month purchase period.

Director Restricted Shares

Under the Amended and Restated Non-Employee Director Stock Plan (the “Amended Plan”), approved in May 2007 and further amended in February 2013 and January 2016, up to 360 of common shares may be issued.

As of September 30, 2022, approxim ately 60 shares re main available for grant under the Amended Plan.

Under the Amended Plan, each non-employee director receives an annual grant of restricted shares of the Company’s common stock.

The restricted shares vest on the either of (a) the day immediately prior to the first annual shareholder meeting that occurs after the grant date or (b) one year after the grant date.

No shares were issued during the three months ended March 31, 2023.

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

September 30, 2022

Director restricted share transactions during the nine months ended September 30, 2022 were as follows:

March 31, 2023

Director Restricted Shares

As of March 31, 2023, approxim ately 60 shares re main available for grant under the Amended Plan.

Under the Amended Plan, each non-employee director receives an annual grant of restricted shares of the Company’s common stock.

The restricted shares vest on the earlier of (a) the day immediately prior to the first annual shareholder meeting that occurs after the grant date or (b) one year after the grant date.

Director restricted share transactions during the three months ended March 31, 2023 were as follows:

Director Restricted Shares Weighted-Average Grant Date Fair Value

Outstanding as of January 1 15 $ 93.70

Granted 15 93.70

Vested ( 15 ) 93.46

Forfeited — —

Outstanding as of September 30 15 $ 93.70

For the three and nine months ended September 30, 2022, the Company recorded $ 321 and $ 1,040 , respectively, of share-based compensation expense associated with these grants.

For the three and nine months ended September 30, 2021, the Company recorded $ 318 and $ 1,046 , respectively, of share-based compensation expense associated with these grants.

As of September 30, 2022, the total share-based compensation expense related to the restricted shares not yet recognized was $ 841 , and the weighted-average period over which it is expected to be recognized is approximately less than one year .

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

Long-term debt consisted of the following as of September 30, 2022 and December 31, 2021:

September 30,

2022 December 31,

Outstanding as of March 31 15 $ 93.70

For both the three months ended March 31, 2023 and 2022, the Company recorded $ 339 of share-based compensation expense associated with these grants.

As of March 31, 2023, the total share-based compensation expense related to the restricted shares not yet recognized was $ 154 , and the weighted-average period over which it is expected to be recognized is approximately less than one year .

Long-term debt consisted of the following as of March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

Credit facility, expires 2026 $ 153,500 $ 108,500

3 unchanged sentences

Total long-term debt, less current portion $ 150,681 $ 106,588

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

March 31, 2023

In September 2017, the Company entered into a five-year senior unsecured revolving credit facility (the “Facility”) with a maximum aggregate principal amount of $ 150,000 , with a sublimit of $ 30,000 for letters of credit and a sublimit of $ 30,000 for swing line loans.

7 unchanged sentences

Such increases to the Facility may be in the form of additional revolving credit loans, term loans or a combination thereof, and are contingent upon there being no events of default under the Facility.

As of September 30, 2022 and December 31, 2021, the Company had $ 279,966 and $ 272,466 respectively, of available borrowing capacity under the Facility.

As of March 31, 2023 and December 31, 2022, the Company had $ 234,966 and $ 279,966 , respectively, of available borrowing capacity under the Facility.

The Facility contains covenants that, among other things, restrict the ability of the Company, without the approval of the required lenders, to engage in certain mergers, consolidations, asset sales, dividends and stock repurchases, investments, and other transactions or to incur liens or indebtedness in excess of agreed thresholds, as set forth in the credit agreement.

The Company also has to fulfill financial covenants with respect to a leverage ratio and an interest coverage ratio.

As of September 30, 2022, the Company was in compliance with the aforementioned covenants.

Under the amended Facility, interest accrues on the amounts outstanding under the Facility at the Company ’s option, at either (1) Bloomberg Short-Term Bank Yield Index rate (the “BSBY Ra te”), which cannot be less than zero , plus a margin ranging from 1.25 % to 1.75 % based on the Company’s leverage ratio, or (2) the base rate, which cannot be less than 2.00 %.

As of March 31, 2023, the Company was in compliance with the aforementioned covenants.

Under the amended Facility, interest accrues on the amounts outstanding under the Facility at the Company ’s option, at either (1) Bloomberg Short-Term Bank Yield Index rate (the “BSBY Rate ”), which cannot be less than zero , plus a margin ranging from 1.25 % to 1.75 % based on the Company ’s leverage ratio, or (2) the base rate, which cannot be less than 2.00 %.

The base rate is the highest of (i) the federal funds rate, which cannot be less than zero , plus 0.50 %, (ii) the administrative agent ’s prime rate and (iii) the BSBY Rate, which cannot be less than zero , plus 1.00 %, plus a margin ranging from 0.00 % to 0.50 % based on the Company ’s leverage ratio.

Interest is payable in arrears for each loan that is based on the BSBY rate on the last day o f the interest period applicable to each loan, and interest is payable in arrears on loans not based on the BSBY rate on the last day of each quarter.

The interest rate on the outstanding borrowings under the Facility was 3.33 % as of September 30, 2022 and 1.35 % as of September 30, 2021.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

The weighted average interest rate on the outstanding borrowings under the revolving credit facility was 5.96 % and 1.44 % for the three months ended March 31, 2023, and 2022, respectively.

Letters of Credit

The Company has an arrangement under the Facility to issue letters of credit, which guarantee the Company’s obligations for potential claims exposure for insurance coverage.

As of both September 30, 2022 and December 31, 2021, outstanding letters of credit totaled $ 20,034 .

Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during each period.

Restricted shares have non-forfeitable rights to dividends and as a result, are considered participating securities for purposes of computing net income (loss) per common share pursuant to the two-class method.

Diluted net income (loss) per common share assumes the exercise of outstanding stock options and the vesting of performance share awards using the treasury stock method when the effects of such assumptions are dilutive.

As of both March 31, 2023 and December 31, 2022, outstanding letters of credit totaled $ 20,034 .

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

September 30, 2022

A reconciliation of net income (loss) attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share during the three and nine months ended September 30, 2022 and 2021 is as follows:

Three Months Ended Nine Months Ended

September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Net income and comprehensive income from continuing operations $ 52,133 $ 30,503 $ 150,249 $ 77,894

Net loss and comprehensive loss from discontinued operation — ( 6,967 ) — ( 12,500 )

March 31, 2023

Net Income Per Share

Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during each period.

Restricted shares have non-forfeitable rights to dividends and as a result, are considered participating securities for purposes of computing net income per common share pursuant to the two-class method.

Diluted net income per common share assumes the exercise of outstanding stock options and the vesting of performance share awards using the treasury stock method when the effects of such assumptions are dilutive.

A reconciliation of net income attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income per share during the three months ended March 31, 2023 and 2022 is as follows:

Three Months Ended

2023 March 31,

Net income attributable to Forward Air $ 36,368 $ 42,686

Income allocated to participating securities from continuing operations ( 325 ) ( 235 ) ( 838 ) ( 541 )

Loss allocated to participating securities from discontinued operation — — — —

Income allocated to participating securities ( 185 ) ( 248 )

Numerator for basic and diluted net income per share for continuing operations $ 51,808 $ 30,268 $ 149,411 $ 77,353

Numerator for basic and diluted net loss per share for discontinued operation $ — $ ( 6,967 ) $ — $ ( 12,500 )

Numerator for basic and diluted net income per share $ 36,183 $ 42,438

Denominator for basic net income per share - weighted-average number of common shares outstanding 26,350 26,947

1 unchanged sentence

Denominator for diluted net income per share - weighted-average number of common shares and common share equivalents outstanding 26,479 27,100

Basic net income (loss) per share:

Continuing operations $ 1.94 $ 1.12 $ 5.56 $ 2.84

Discontinued operation — ( 0.26 ) — ( 0.46 )

Net income per basic share 1

$ 1.94 $ 0.86 $ 5.56 $ 2.39

Diluted net income (loss) per share:

Continuing operations $ 1.93 $ 1.12 $ 5.53 $ 2.83

Discontinued operation — ( 0.26 ) — ( 0.46 )

Net income per diluted share $ 1.93 $ 0.86 $ 5.53 $ 2.37

1 Rounding may impact summation of amounts.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

The number of shares that were not included in the calculation of net income (loss) per diluted share because to do so would have been anti-dilutive for the three and nine months ended September 30, 2022 and 2021 are as follows:

Three Months Ended Nine Months Ended

September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Net income per share:

Basic $ 1.37 $ 1.57

Diluted $ 1.37 $ 1.57

The number of shares that were not included in the calculation of net income per diluted share because to do so would have been anti-dilutive for the three months ended March 31, 2023 and 2022 are as follows:

Three Months Ended

2023 March 31,

Anti-dilutive stock options 112 64

2 unchanged sentences

Total anti-dilutive shares 204 78

For the nine months ended September 30, 2022 and 2021, the Company recorded income tax expense of $ 50,791 and $ 25,969 , respectively, for continuing operations.

The effective tax rate of 25.3 % for the nine months ended September 30, 2022 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards.

The effective tax rate of 25.0 % for the nine months ended September 30, 2021 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

March 31, 2023

For the three months ended March 31, 2023 and 2022, the Company recorded income tax expense of $ 11,786 and $ 13,881 , respectively.

The effective tax rate of 24.5 % for the three months ended March 31, 2023 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards.

The effective tax rate of 24.5 % for the three months ended March 31, 2022 varied from the statutory United States federal income tax rate of 21.0% primarily due to the effect of state income taxes, net of the federal benefit, and non-deductible executive compensation, partially offset by excess tax benefits realized on share-based awards.

The Company recognizes income tax benefits from uncertain tax positions where the realization of the ultimate benefit is uncertain.

As of both September 30, 2022 and December 31, 2021, the Company had $ 241 of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

As of both September 30, 2022 and December 31, 2021, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 88 .

As of both March 31, 2023 and December 31, 2022, the Company had $ 198 of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

As of both March 31, 2023 and December 31, 2022, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 85 .

With a few exceptions, the Company is no longer subject to U.S.

federal, state and local, or Canadian examinations by tax authorities for years before 2015.

The sale of Pool resulted in a capital loss in the amount of $ 4,230 , which expires in 2026.

The Company concluded that it was more likely than not the capital loss carryforward will not be realized and therefore, established a valuation allowance of $ 4,230 to reserve against its capital loss carryforward.

The sale of the Pool Distribution business in February 2021 resulted in a capital loss in the amount of $ 4,253 , which expires in 2026.

The Company concluded that it was more likely than not that the capital loss carryforward will not be realized and therefore, established a valuation allowance of $ 4,253 to reserve against its capital loss carryforward.

The Company also maintains a valuation allowance to reserve against its state net operating loss carryforwards of $ 395 .

3 unchanged sentences

The Company believes it is more likely than not that it will realize its remaining net deferred tax assets, net of the valuation allowance, in future years.

Fair Value of Financial Instruments

The Company categorizes its assets and liabilities into one of three levels based on the assumptions used in valuing the asset or liability.

Estimates of fair value financial assets and liabilities are based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions.

In accordance with this guidance, fair value measurements are classified under the following hierarchy:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in markets that are not active;

and model-derived valuations in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Forward Air Corporation

1 unchanged sentence

(unaudited and in thousands, except per share data)

September 30, 2022

• Level 3 - Model-derived valuations in which one or more significant inputs are unobservable.

As previously discussed in Note 4, Acquisitions, the estimated fair value of the earn-out liability was determined using the option pricing method.

The significant inputs used to calculate the estimated fair value are derived from a combination of observable and unobservable market data.

Observable inputs used in the option pricing method include the risk-free rate and the revenue volatility while unobservable inputs include the revenue discount rate and the estimated revenue projections.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 are summarized below:

As of September 30, 2022

Level 1 Level 2 Level 3 Total

Earn-out liability $ — $ — $ — $ —

As of December 31, 2021

Level 1 Level 2 Level 3 Total

Earn-out liability $ — $ — $ 385 $ 385

Cash and cash equivalents, accounts receivable, other receivables, and accounts payable are valued at their carrying amounts in the Company’s Condensed Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial instruments.

March 31, 2023

Fair Value of Financial Instruments

Cash and cash equivalents, accounts receivable, and accounts payable are valued at their carrying amounts in the Company’s Condensed Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial instruments.

The carrying amount of long-term debt under the Company’s credit facility approximates fair value based on the borrowing rates currently available to the Company for a loan with similar terms and average maturity.

As of September 30, 2022, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 16,923 , compared to its carrying value of $ 17,531 .

As of March 31, 2023, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 27,215 , compared to its carrying value of $ 27,517 .

As of December 31, 2022, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 23,210 , compared to its carrying value of $ 23,794 .

1 unchanged sentence

Cash Dividends

During the first, second and third quarters of 2022, the Board declared and the Company has paid a quarterly cash dividend of $ 0.24 per common share.

During the first quarter of 2023, the Board declared and the Company has paid a quarterly cash dividend of $ 0.24 per common share.

During each quarter of 2022, the Company’s Board of Directors declared and the Company has paid a quarterly cash dividend of $ 0.24 per common share

On October 25, 2022, the Board declared a quarterly cash dividend of $ 0.24 per common share that will be paid in the fourth quarter of 2022.

On April 28, 2023, the Board declared a quarterly cash dividend of $ 0.24 per common share that will be paid in the second quarter of 2023.

Share Repurchase Program

On February 5, 2019, the Board approved a stock repurchase plan authorizing the repurchase of up to 5,000 shares of the Company’s common stock (the “2019 Repurchase Plan”).

On February 5, 2019, the Board of Directors approved a stock repurchase plan authorizing the repurchase of up to 5,000 shares of the Company’s common stock (the “2019 Repurchase Plan”).

The 2019 Repurchase Plan expires when the shares authorized for repurchase are exhausted or the 2019 Repurchase Plan is canceled.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

During the nine months ended September 30, 2022, the Company repurchased through open market transactions 466 shares of common stock for $ 47,774 , or an average of $ 102.44 per share, and during the nine months ended September 30, 2021, the Company repurchased through open market transactions 535 shares of common stock for $ 48,989 , or an average of $ 91.46 per share.

During the three months ended March 31, 2023, the Company repurchased through open market transactions 474 shares of common stock for $ 50,491 , or an average of $ 105.38 per share, and during the three months ended March 31, 2022, the Company repurchased through open market transactions 176 shares of common stock for $ 17,780 , or an average of $ 100.86 per share.

All shares received were retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained Earnings ” in the Condensed Consolidated Balance Sheets.

As of September 30, 2022, the remaining shares permitted to be repurchased under the 2019 Repurchase Plan were approximately 2,366 shares.

As of March 31, 2023, the remaining shares permitted to be repurchased under the 2019 Repurchase Plan were approximately 1,759 shares.

Commitments and Contingencies

2 unchanged sentences

The Company accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Based on the knowledge of the facts, the Company believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on its Condensed Consolidated Financial Statements.

Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and related events unfold.

Insurance coverage provides the Company with primary and excess coverage for claims related to vehicle liability, workers’ compensation, property damage and employee medical benefits.

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

March 31, 2023

For vehicle liability, the Company retains a portion of the risk.

Below is a summary of the Company’s risk retention on vehicle liability insurance coverage maintained by the Company through $ 10,000 :

Below is a summary of the Company’s risk retention on vehicle liability insurance coverage maintained by the Company up to $ 10,000 (in thousands):

Risk Retention Frequency Layer Policy Term

4 unchanged sentences

10/1/2022 to 10/1/2023

LTL business $ 6,000 Policy Term Aggregate³ $ 3,000 to $ 5,000

10/1/2021 to 10/1/2022

LTL, Truckload and Intermodal businesses $ 5,000 Policy Term Aggregate³ $ 5,000 to $ 10,000

3 unchanged sentences

¹ Excluding the Final Mile business, which is primarily a brokered service.

² For each and every accident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident.

³ During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will respond.

² For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident.

³ During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Risk Retention before insurance will continue.

Also, from time to time, when brokering freight, the Company may face claims for the “negligent selection” of outside, contracted carriers that are involved in accidents, and the Company maintains third-party liability insurance coverage with a $ 100 deductible per occurrence for most of its brokered services.

2 unchanged sentences

The Company accrues for the costs of the uninsured portion of pending claims within the self-insured retention based on the nature and severity of individual claims and historical claims development trends.

The Company believes the recorded

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

reserves are sufficient for all incurred claims up to the self-insured retention limits, including an estimate for claims incurred but not reported.

The Company believes the recorded reserves are sufficient for all incurred claims up to the self-insured retention limits, including an estimate for claims incurred but not reported.

However, estimating the number and severity of claims, as well as related judgment or settlement amounts is inherently difficult, and the Company may fail to establish sufficient insurance reserves and adequately estimate for future insurance claims.

15 unchanged sentences

(unaudited and in thousands, except per share data)

September 30, 2022

Segment results from operations for the three and nine months ended September 30, 2022 and 2021 are as follows:

Three Months Ended September 30, 2022

Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations

External revenues $ 395,607 $ 114,416 $ — $ — $ 510,023

Intersegment revenues 28 5 — ( 33 ) —

Depreciation 6,331 1,782 — — 8,113

Amortization 1,809 2,347 — — 4,156

Income (loss) from continuing operations 56,304 16,610 ( 1,249 ) — 71,665

Purchases of property and equipment 6,434 294 — — 6,728

Three Months Ended September 30, 2021

Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations

External revenues $ 341,461 $ 78,164 $ — $ — $ 419,625

Intersegment revenues 96 9 — ( 105 ) —

Depreciation 4,942 841 16 — 5,799

Amortization 1,842 1,775 — — 3,617

Income (loss) from continuing operations 34,636 8,712 ( 872 ) — 42,476

Purchases of property and equipment 13,769 671 — — 14,440

Nine Months Ended September 30, 2022

Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations

March 31, 2023

Segment results from operations for the three months ended March 31, 2023 and 2022 are as follows:

Three Months Ended March 31, 2023

Expedited Freight Intermodal Corporate Eliminations Consolidated

External revenues $ 338,904 $ 88,162 $ — $ — $ 427,066

2 unchanged sentences

Amortization 1,901 2,560 — — 4,461

Income (loss) from continuing operations 167,091 43,005 ( 5,535 ) — 204,561

Income from operations 32,998 11,203 6,308 — 50,509

Purchases of property and equipment 6,613 176 — — 6,789

Nine Months Ended September 30, 2021

Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations

Three Months Ended March 31, 2022

Expedited Freight Intermodal Corporate Eliminations Consolidated

External revenues $ 376,526 $ 90,435 $ — $ — $ 466,961

2 unchanged sentences

Amortization 1,808 2,270 — — 4,078

Income (loss) from continuing operations 93,854 21,607 ( 8,137 ) — 107,324

Income (loss) from operations 47,680 11,146 ( 1,475 ) — 57,351

Purchases of property and equipment 8,956 952 — — 9,908

Forward Air Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited and in thousands, except per share data)

September 30, 2022

As of September 30, 2022 $ 698,313 $ 304,378 $ 183,409 $ ( 41 ) $ 1,186,059

As of March 31, 2023 $ 750,838 $ 296,624 $ 179,178 $ ( 74 ) $ 1,226,566

As of December 31, 2022 683,386 322,001 202,756 ( 67 ) 1,208,076

A reconciliation from the segment information to the consolidated balances for revenues is set forth below:

Three Months Ended Nine Months Ended

September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Intersegment revenues - continuing operations $ — $ — $ — $ ( 57 )

Intersegment revenues - discontinued operation — — — 57

Consolidated intersegment revenues $ — $ — $ — $ —

Revenue from the individual services within the Expedited Freight segment for the three and nine months ended September 30, 2022 and 2021 are as follows:

Three Months Ended Nine Months Ended

September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Revenue from the individual services within the Expedited Freight segment for the three months ended March 31, 2023 and 2022 are as follows:

Three Months Ended

2023 March 31,

Expedited Freight revenues:

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements