SAN MATEO, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Con-way Inc.
(NYSE: CNW) today reported net income available to common
shareholders for the third quarter of 2009 of $13.5 million, or 27
cents per diluted share. The results compare to third-quarter 2008
net income available to common shareholders of $38.8 million, or 81
cents per diluted share. (Logo:
http://www.newscom.com/cgi-bin/prnh/20060418/SFTU007LOGO) The 2009
third quarter included the effect of a change in accounting
estimate related to revenue adjustments at Con-way Freight and a
charge for certain discrete tax items, which reduced net income by
7 cents and 5 cents per diluted share, respectively. Excluding
these items, 2009 third-quarter earnings per diluted share were 39
cents. The 2008 third quarter results reflected the effect of
preferred stock dividends. The company subsequently converted its
preferred stock to common stock on June 30 this year. Operating
income in the 2009 third quarter was $41.1 million compared to
$78.9 million earned in the third quarter a year ago. Revenue in
the 2009 third quarter was $1.13 billion, down from last year's
third-quarter revenue of $1.37 billion as the recessionary economy
curtailed demand for services. Commenting on the quarter, Con-way
President and CEO Douglas W. Stotlar said, "Our operating companies
have adjusted to the resetting economy. Overall, the business
environment continues to present formidable challenges,
characterized by weak demand, excess capacity and pricing pressure.
We expect these conditions to persist in the near term, diminishing
the prospects for earnings growth." Con-way Freight continued to
post sequential quarter-to-quarter 2009 tonnage growth while yield
and profits declined due to several factors. "We made a strategic
decision, implemented over the past two quarters, to improve
network utilization and we met this objective," noted Stotlar.
"Profits were constrained due to pricing levels, higher variable
operating costs associated with the tonnage growth and lower fuel
surcharge revenues. While pricing is likely to remain under
pressure, we believe the increased network volumes put us in a
better position competitively; we are now instituting specific
measures to improve operating efficiency." Menlo Worldwide
Logistics produced a second consecutive quarter of solid operating
results. "Menlo did a superb job managing its costs," Stotlar said.
"These results speak to the consistent, successful execution of its
business model, particularly in the 4PL segment and with its
multi-client warehousing operations. Menlo continues to enjoy a
strong sales pipeline and an excellent win rate on new projects,
which has helped offset business declines from existing clients."
Con-way Truckload performed well in the quarter, effectively
managing near-term market challenges while expanding its service
portfolio. "Profits were reduced by an asset disposition loss.
Excluding this, Con-way Truckload turned in a commendable operating
profit in a soft market," Stotlar noted. "Costs remain
well-controlled, asset utilization is improving and our new
regional truckload operation is gaining traction. Con-way Truckload
continues to be recognized for its premium service value, which is
an excellent foundation for growth," he concluded. The effective
tax rate for the 2009 third quarter was 46.1 percent compared to
36.5 percent in the same period of 2008. The 2009 tax rate was
affected by discrete tax items that increased the effective tax
rate, while the 2008 tax rate also included discrete tax items,
which reduced the effective tax rate. FREIGHT For the 2009 third
quarter, Con-way Freight, the company's less-than-truckload
operation, reported: -- Operating income of $22.8 million, a
decrease of 62.7 percent from the $61.1 million earned in the
year-ago period. Profitability was diminished from lower pricing
driven by overcapacity in the LTL market, and higher variable
operating costs due to increased tonnage levels. The 2009 third
quarter also was affected by a change in accounting estimate
related to revenue adjustments, which decreased income by $5.4
million. The current-quarter comparison to prior year also was
affected by employee cost reductions implemented in April 2009. --
Revenue of $692.8 million, a 14.3 percent decline from last year's
third-quarter revenue of $808.3 million. -- Tonnage per day
increased 5.1 percent over the previous-year third quarter. --
Yield declined 19.4 percent from the previous-year third quarter,
primarily reflecting the weak pricing environment from industry
overcapacity. Excluding the fuel surcharge, yield declined 10.5
percent. -- Con-way Freight recorded an operating ratio of 96.8 in
the 2009 third quarter, including the earlier-mentioned charge for
the accounting estimate change. LOGISTICS For the third quarter of
2009, Menlo Worldwide Logistics, the company's global logistics and
supply chain management operations, reported: -- Operating income
of $9.5 million, a 159 percent increase from $3.7 million earned in
the third quarter of 2008. The results reflected effective cost
controls, ongoing improvements in operating efficiency, and
gain-share income. -- Revenue of $344.4 million, down 18.0 percent
from the previous-year third-quarter revenue of $419.9 million. The
decrease reflects a decline in fuel-surcharge revenue from previous
levels, and significantly lower costs for purchased transportation
sourced by Menlo's transportation-management group as the company
continued to leverage pricing opportunities with third-party
trucking service providers. -- Net revenue of $129.3 million, a
slight increase from $127.9 million in the previous-year third
quarter, reflecting higher gain-share revenues. TRUCKLOAD For the
third quarter of 2009, Con-way Truckload, the company's
full-truckload transportation operation, reported: -- Operating
income of $10.6 million, a decrease of 30.1 percent compared to
$15.2 million in the previous-year period. Results included a $2.3
million charge related to the disposition of 150 tractors that will
be replaced during the fourth quarter. Excluding the charge,
operating income in the 2009 third quarter was $13.0 million. --
Revenue of $95.7 million, after the elimination of $50.6 million in
inter-company revenues. This compares to 2008 third-quarter revenue
of $140.9 million (after elimination of $42.7 million in
inter-company revenues). -- Operating ratio before inter-company
eliminations and exclusive of fuel surcharges was 91.7, compared to
88.6 in the third quarter of 2008. CON-WAY OTHER Con-way Other
includes the company's Road Systems, Inc. trailer manufacturing
unit as well as other corporate activities. These activities
produced losses of $1.8 million and $1.1 million, respectively, in
the 2009 and 2008 third quarters. INVESTOR CONFERENCE CALL Con-way
will host a conference call for the investment community tomorrow,
Wednesday, November 4 at 8:30 a.m. Eastern Standard Time (5:30 a.m.
Pacific). The call can be accessed by dialing (866) 264-3634 or
(706) 643-3632 (for international callers) and is expected to last
approximately one hour. Callers are requested to dial in at least
five minutes before the start of the call. The call will also be
available through a live internet webcast at
http://www.con-way.com/, in the investor relations section. An
audio replay will be available for two weeks following the call by
dialing (800) 642-1687 or (706) 645-9291 (for international
callers) and using access code 32526465. An Internet replay of the
presentation will also be available at the Con-way site. About
Con-way -- Con-way Inc. (NYSE:CNW) is a $4.3 billion freight
transportation and logistics services company headquartered in San
Mateo, Calif. A diversified transportation company, Con-way
delivers industry-leading services through three primary operating
companies: Con-way Freight, Con-way Truckload and Menlo Worldwide
Logistics. These operating units provide high-performance,
day-definite less-than-truckload and full truckload and multimodal
freight transportation, as well as logistics, warehousing and
supply chain management services, and trailer manufacturing.
Con-way Inc. and its subsidiaries operate from more than 500
locations across North America and in 20 countries. For more
information about Con-way, visit us on the Web at
http://www.con-way.com/. FORWARD-LOOKING STATEMENTS Certain
statements in this press release constitute "forward-looking
statements" and are subject to a number of risks and uncertainties
and should not be relied upon as predictions of future events. All
statements other than statements of historical fact are
forward-looking statements, including: any projections of earnings,
revenues, weight, yield, volumes, income or other financial or
operating items, all statements of the plans, strategies,
expectations or objectives of Con-way's management for future
operations or other future items, any statements concerning
proposed new products or services, any statements regarding
Con-way's estimated future contributions to pension plans, any
statements as to the adequacy of reserves, any statements regarding
the outcome of any legal and other claims and proceedings that may
be brought against Con-way, any statements regarding future
economic conditions or performance, any statements regarding
strategic acquisitions, any statements of estimates or belief, and
any statements or assumptions underlying the foregoing. Specific
factors that could cause actual results and other matters to differ
materially from those discussed in such forward-looking statements
include: changes in general business and economic conditions,
increasing competition and pricing pressure, the creditworthiness
of Con-way's customers and their ability to pay for services
rendered, changes in fuel prices or fuel surcharges, the
possibility that Con-way may, from time to time, be required to
record impairment charges for goodwill, in tangible assets and
other long-lived assets, the possibility of defaults under
Con-way's $400 million credit agreement and other debt instruments
(including without limitation defaults resulting from unusual
charges), uncertainty in the credit markets, including the effect
on Con-way's ability to refinance indebtedness as and when it
becomes due, labor matters, enforcement of and changes in
governmental regulations or legislation which potentially could
result in an adverse impact on the company, environmental and tax
matters, matters relating to the 1996 spin-off of Consolidated
Freightways Corporation ("CFC"), and matters relating to Con-way's
defined benefit pension plans, including the effect on the plans of
changes in discount rates and in the value of plan assets. The
factors included herein and in Item 7 of Con-way's 2008 Annual
Report on Form 10-K as well as other filings with the Securities
and Exchange Commission could cause actual results and other
matters to differ materially from those in such forward-looking
statements. As a result, no assurance can be given as to future
financial condition, cash flows, or results of operations. Con-way
Inc. Statements of Operating Results (Dollars in thousands except
per share amounts) Three Months Nine Months Ended Ended September
30, September 30, ------------- ------------- 2009 2008 2009 2008
---- ---- ---- ---- REVENUES Freight $692,750 (b) $808,326
$1,890,434 (b) $2,375,654 Logistics (a) 344,361 419,896 987,793
1,138,494 Truckload 95,681 140,932 271,490 394,264 Other 649 1,015
2,989 3,023 --- ----- ----- ----- $1,133,441 $1,370,169 $3,152,706
$3,911,435 ========== ========== ========== ========== OPERATING
INCOME (LOSS) Freight $22,816 (b) $61,107 $48,423 (b) $174,559 (d)
Logistics 9,532 3,678 22,305 14,895 Truckload 10,620 15,195
(115,179)( c ) 37,907 Other (1,834) (1,063) 1,239 424 ------ ------
----- --- 41,134 78,917 (43,212) 227,785 Other Expense, net 16,110
15,169 48,204 43,247 ------ ------ ------ ------ Income (Loss)
before Income Tax Provision 25,024 63,748 (91,416) 184,538 Income
Tax Provision 11,532 23,264 14,402 71,136 ------ ------ ------
------ Income (Loss) from Continuing Operations 13,492 40,484
(105,818) 113,402 ------ ------ -------- ------- Discontinued
Operations, net of tax Gain from Disposal - - - 1,609 --- --- ---
----- - - - 1,609 Net Income (Loss) 13,492 40,484 (105,818) 115,011
Preferred Stock Dividends - 1,655 3,189 5,028 --- ----- ----- -----
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS $13,492 $38,829
$(109,007) $109,983 ======= ======= ========= ======== NET INCOME
(LOSS) FROM CONTINUING OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS
$13,492 $38,829 $(109,007) $108,374 ======= ======= =========
======== Weighted-Average Common Shares Outstanding Basic
48,862,692 45,499,208 47,009,642 45,367,459 Diluted 49,497,740
48,336,200 47,009,642 48,256,429 Earnings (Loss) Per Common Share
Basic Net Income (Loss) from Continuing Operations $0.28 $0.85
$(2.32) $2.39 Gain from Disposal - - - 0.03 --- --- --- --- $0.28
$0.85 $(2.32) $2.42 ===== ===== ====== ===== Diluted Net Income
(Loss) from Continuing Operations $0.27 $0.81 $(2.32) $2.26 Gain
from Disposal - - - 0.04 --- --- --- ---- $0.27 $0.81 $(2.32) $2.30
===== ===== ====== ===== (a)Logistics' net revenues Revenues
$344,361 $419,896 $987,793 $1,138,494 Purchased Transpor- tation
expense (215,048) (291,964) (606,544) (757,923) -------- --------
-------- -------- Net revenues $129,313 $127,932 $381,249 $380,571
(b) The three and nine months ended September 30, 2009 include a
change in accounting estimate at the Freight segment, which
increased the allowance for revenue adjustments and decreased both
revenue and operating income by $5.4 million ($0.07 per diluted
share). ( c )The nine months ended September 30, 2009 include a
goodwill impairment charge of $134.8 million ($2.86 per share) in
the first quarter of 2009. (d) The nine months ended September 30,
2008 include $5.2 million ($0.07 per diluted share) of
first-quarter expense associated with restructuring activities at
Freight. Con-way Inc. Condensed Balance Sheets (Dollars in
thousands) September 30, December 31, 2009 2008 ------------
---------- ASSETS Current assets $1,097,468 $951,082 Property,
plant and equipment, net 1,365,572 1,471,956 Other assets 447,451
648,669 ------- ------- Total Assets $2,910,491 $3,071,707
========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities $829,717 $658,077 Long-term debt and guarantees 718,074
926,224 Other long-term liabilities and deferred credits (a)
628,359 861,814 Shareholders' equity (a) 734,341 625,592 -------
------- Total Liabilities and Shareholders' Equity $2,910,491
$3,071,707 ========== ========== (a) Effective April 30, 2009,
Con-way amended its primary defined benefit pension plan to
permanently curtail benefits associated with future increases in
employee compensation. In connection with the curtailment, Con-way
re-measured its plan-related assets and liabilities as of April 30,
2009. Accordingly, as of the re-measurement date, Con-way recorded
a $299.9 million decrease to the plan obligation, a $116.9 million
decrease in long-term deferred tax assets, and a $182.9 million net
increase to shareholders' equity (to reflect a reduction in the
accumulated other comprehensive loss).
http://www.newscom.com/cgi-bin/prnh/20060418/SFTU007LOGO
http://photoarchive.ap.org/ DATASOURCE: Con-way Inc. CONTACT:
Investors, Patrick Fossenier, +1-650-378-5353, or News Media, Gary
Frantz, +1-650-378-5335, both of Con-way Web Site:
http://www.con-way.com/
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