CON-WAY INC 
By (Logo: http://www.newscom.com/cgi-bin/prnh/20060418/SFTU007LOGO)
Both the 2008 and 2007 fourth-quarter results from continuing operations
included special charges. Without the charges, on a non-GAAP basis (See
Footnote a) Con-way net income from continuing operations was
2008
--
--
--
2007
--
The net loss to common shareholders in the 2008 fourth quarter was
Net income to common shareholders for both the 2008 and 2007 fourth quarters included the above mentioned special charges. Net income for both periods also included the effect of discontinued operations, described below:
-- 2008 fourth quarter: A net gain of
-- 2007 fourth quarter: A charge of
Revenue in the 2008 fourth quarter was
The 2008 fourth-quarter income tax benefit rate of 3.3 percent primarily reflects no tax deduction for the impairment charge and the write-down of the acquisition-related receivable, as well as tax expense from other discrete tax items. The effective tax rate for the same period of 2007 was 35.3 percent.
FULL YEAR 2008 RESULTS
For the full-year 2008, Con-way reported net income from continuing
operations (after preferred dividends) of
Excluding special charges in both years, on a non-GAAP basis (See Footnote
a) full-year 2008 net income from continuing operations was
Including the effect of discontinued operations and special charges, net
income to common shareholders for the full-year 2008 was
Revenues for full-year 2008 rose to
Commenting on the results, Con-way President and CEO
In response, Stotlar noted that the company has taken a number of steps to reduce costs and conserve cash, including workforce reductions, aggressive expense controls, lower capital expenditures and a freeze on pay levels for management and administrative employees for 2009. "These were difficult decisions, necessary to align our costs for the current environment, and to help position us to weather what looks to be an extremely tough recessionary economy."
Stotlar emphasized however that while Con-way is actively pursuing continuous cost reduction and efficiency improvement measures throughout the enterprise, the company is not compromising on service. "Even more so in challenging economic times, customers want secure, financially stable service providers who they can trust to provide consistent, reliable everyday performance," he said.
"We have excellent franchises with reputations for superior service. Our employees are putting in tremendous effort to take care of our customers, delivering some of the highest productivity and service levels in our history. All of our business units are operating from positions of strength in their markets and remain focused on delivering the premium value for which we are known."
For the full-year 2008, the effective tax rate was 51.5 percent compared to 36.6 percent in the prior year. The higher 2008 tax rate primarily reflects the effect of the previously mentioned impairment charges in the fourth-quarter.
Segment results in the 2008 fourth quarter for Con-way's principal operations were as follows:
FREIGHT
For the 2008 fourth quarter, Con-way Freight, the company's regional less-than-truckload operations, reported:
-- An operating loss of
-- Revenues of
-- Tonnage per day decreased 7.7 percent from the previous-year fourth quarter.
-- Yield, defined as revenue per hundredweight, declined 2.2 percent from the previous-year fourth quarter. Excluding the fuel surcharge, yield declined 1.4 percent.
-- An operating ratio of 101.4 in the 2008 fourth quarter compared to 92.6
in fourth-quarter 2007. Excluding the restructuring charge mentioned earlier,
the 2008 fourth-quarter operating ratio was 98.2. The 2007 fourth quarter
operating ratio included the
LOGISTICS
For the fourth quarter of 2008, Menlo Worldwide Logistics, the company's global logistics and supply chain management operations, reported:
-- An operating loss of
-- Revenue of
-- Net revenue of
While Menlo recorded an increase in net revenue, operating income declined
due to the special charges and other costs incurred for remediation of
operating issues in
TRUCKLOAD
For the fourth quarter of 2008, Con-way Truckload, the company's full-truckload transportation operations, reported:
-- Operating income of
-- Revenue of
-- Operating ratio on total revenues excluding fuel surcharges (before elimination of inter-company revenues) of 88.1, compared to 92.7 in the previous-year period. The operating ratio on total revenues, including fuel surcharges, was 90.3 compared to 94.1 in the 2007 fourth quarter, including the previously mentioned integration expense.
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 a loss during the 2008 fourth quarter, primarily due to activities from the company's captive insurance program.
2009 OUTLOOK
Due to the uncertainty of the global economy and lack of visibility into future business volumes and market trends, the company is suspending its practice of providing annual earnings guidance.
INVESTOR CONFERENCE CALL
Con-way will hold a conference call for the investment community to
discuss its fourth-quarter and full-year 2008 financial results tomorrow,
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 web cast at http://www.con-way.com, in the Investor Relations section. Related financial and operating statistics to be discussed on the conference call will also be available on the company's web site 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 79978707. The replay will also be available at the same web-casting site providing access to the live call.
About Con-way Inc. -- Con-way Inc. (NYSE:CNW) is a
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 and the effect of ongoing litigation
alleging that Con-way engaged in price fixing of fuel surcharges in violation
of Federal antitrust laws, the effects of the cessation of the air carrier
operations of Emery Worldwide Airlines, 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
Con-way Inc.
Statements of Operating Results
(Dollars in thousands except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
REVENUES
Freight $640,305 $739,162 $3,015,959 $2,904,543
Logistics [b] 373,117 340,094 1,511,611 1,297,056
Truckload [c] 110,937 118,446 505,201 172,674
Other 1,023 2,460 4,046 13,090
$1,125,382 $1,200,162 $5,036,817 $4,387,363
OPERATING INCOME (LOSS)
Freight $(9,390) $55,201 $165,169 $235,060
Logistics (38,578) 5,940 (23,683) 25,599
Truckload [c] 14,488 8,797 52,395 8,803
Vector - - - (2,699)
Other (1,683) 92 (1,259) (2,310)
(35,163) 70,030 192,622 264,453
Other Expense, net 14,458 10,222 57,705 21,807
Income (Loss) before
Income Tax Provision
(Benefit) (49,621) 59,808 134,917 242,646
Income Tax Provision
(Benefit) (1,642) 21,084 69,494 88,871
Income (Loss) from
Continuing Operations (47,979) 38,724 65,423 153,775
Discontinued Operations,
net of tax Gain (Loss)
from Disposal 6,717 (2,472) 8,326 (863)
Net Income (Loss) (41,262) 36,252 73,749 152,912
Preferred Stock Dividends 1,760 1,788 6,788 6,960
NET INCOME (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS $(43,022) $34,464 $66,961 $145,952
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS
APPLICABLE TO COMMON
SHAREHOLDERS $(49,739) $36,936 $58,635 $146,815
Weighted-Average Common
Shares Outstanding
Basic 45,605,592 45,035,610 45,427,317 45,318,740
Diluted 45,605,592 47,956,613 48,619,292 48,327,784
Earnings (Loss) Per
Common Share
Basic
Net Income (Loss)
from Continuing
Operations $(1.09) $0.82 $1.29 $3.24
Gain (Loss) from
Disposal 0.15 (0.05) 0.18 (0.02)
$(0.94) $0.77 $1.47 $3.22
Diluted [a]
Net Income (Loss)
from Continuing
Operations $(1.09) $0.78 $1.23 $3.06
Gain (Loss) from
Disposal 0.15 (0.05) 0.17 (0.02)
$(0.94) $0.73 $1.40 $3.04
[a] Diluted earnings
per share excluding
special charges
Net income (loss)
from continuing
operations, as
reported $(1.09) $0.78 $1.23 $3.06
Con-way Freight
business-
transformation
initiatives 0.28 0.10 0.33 0.17
Menlo Worldwide
Logistics
impairment charges 0.80 - 0.75 -
Menlo Worldwide
Logistics
write-down of an
acquisition- related
receivable 0.11 - 0.10 -
$0.10 $0.88 $2.41 $3.23
Diluted earnings per share excluding special charges is a non-GAAP
measure. Con-way includes this measure because it believes that
investors are interested in the consolidated comparative results
excluding significant special charges. Non-GAAP measures should be
viewed in addition to, and not as an alternative for, Con-way's
reported results. Con-way's updated annual earnings guidance of
$2.20 to $2.35 provided in December 2008 included $5.2 million
($0.07 per diluted share) of first-quarter expense associated with
restructuring charges and other business-transformation
initiatives at Con-way Freight.
[b] Menlo Logistics'
net revenues
Revenues $373,117 $340,094 $1,511,611 $1,297,056
Purchased
transportation
expense (243,852) (213,995) (1,001,775) (851,366)
Net revenues $129,265 $126,099 $509,836 $445,690
[c] Effective August 23, 2007, Con-way acquired Contract Freighters,
Inc. and affiliated companies (collectively, "CFI"). Under
purchase-method accounting, CFI's operating results are included
in Con-way's statements of operating income only for periods
subsequent to the acquisition.
Con-way Inc.
Condensed Balance Sheets
(Dollars in thousands)
December 31, December 31,
2008 2007
ASSETS
Current assets $920,692 $847,106
Property, plant and equipment, net 1,471,956 1,458,788
Other assets 648,669 703,414
Total Assets $3,041,317 $3,009,308
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $637,697 $673,120
Long-term debt and guarantees 926,224 955,722
Other long-term liabilities and
deferred credits [d] 851,804 471,370
Shareholders' equity [d] 625,592 909,096
Total Liabilities and
Shareholders' Equity $3,041,317 $3,009,308
[d] In December 2008, Con-way recorded a $363.2 million reduction in
shareholders' equity to recognize the underfunded status of
defined benefit pension plans. The adjustment to equity reflects
a $595.4 million increase in employee benefits liabilities, net of
$232.2 million of deferred tax benefits.
SOURCE Con-way Inc.
