Exhibit 99
CNF NEWS RELEASE
3240 HILLVIEW AVENUE
PALO ALTO, CA 94304-1297
(650) 494-2900
Contacts:
Investors - Patrick Fossenier
(650) 813-5353
Press -- Nancy Colvert
(650) 813-5336
CNF INC. REPORTS IMPROVED FOURTH-QUARTER RESULTS
PALO ALTO, Calif. - Jan. 26, 2004 -- CNF Inc. (NYSE:CNF) today reported
fourth-quarter net income for common shareholders of $26.8 million or
49 cents per diluted share, including an 8 cents per diluted share
charge for restructuring the domestic operations of Menlo Worldwide
Forwarding.
This represents an increase of 22 percent in net income from the
fourth quarter of 2002 when CNF reported net income for common
shareholders of $22.0 million, or 41 cents per diluted share. That
prior-year period included a net loss of 4 cents per diluted share from
discontinued operations and, in continuing operations, a 6 cent per
diluted share net gain from settlement of the company's former Express
Mail contract.
Operating income for the fourth quarter of 2003 was $56.0 million,
including the $7.8 million Menlo Worldwide Forwarding restructuring
charge, compared with $54.0 million in the fourth quarter of 2002,
which included a $5.7 million net gain from settlement of the company's
former Express Mail contract. Revenue for the fourth quarter of 2003
was $1.35 billion compared with $1.28 billion in the prior year period.
CNF's effective tax rate for the fourth quarter of 2003 was 40
percent.
For the full year 2003, CNF reported net income for common
shareholders of $83.8 million, or $1.57 per diluted share, including 12
cents per share of net charges from special items. This compares with
net income for common shareholders for the full year 2002 of $93.6
million, $1.74 per diluted share, which included a net loss of 22 cents
per diluted share from discontinued operations. In continuing
operations, it also included a tax benefit of 44 cents per diluted
share and a net gain of 27 cents per diluted share from special items.
Operating income for the full year 2003 was $191.4 million, up 5
percent, and included $7.1 million in net charges from special items.
This compares with $181.8 million in operating income for the full year
2002, which included $24.9 million in net gains from special items.
Revenue for the full year 2003 was $5.1 billion, up 7 percent from $4.8
billion in 2002.
PAGE 1 OF 6
"CNF's results in the fourth quarter were improved from 2002,
driven by a recovering economy and continued tight cost controls,"
said CNF President and Chief Executive Officer Gregory L. Quesnel.
"Con-Way reported a strong quarter. Menlo Worldwide Forwarding
continued its rapid international growth. While its domestic unit
still reported significant and unacceptable losses for the quarter and
the year, our restructuring actions to streamline operations will continue
to reduce costs and should over time bring Forwarding's North American
infrastructure into line with its revenue levels. These actions will
continue in 2004.
"Menlo Worldwide Logistics and Vector SCM each made significant
contributions to earnings for the quarter and the year," Quesnel said.
CNF ended the year with a strong balance sheet including $321.5
million in cash.
Con-Way Transportation Services
- -------------------------------
For the fourth quarter of 2003, Con-Way Transportation Services
reported:
- operating income of $58 million, up 58 percent from $36.7
million in the year-ago period
- revenue of $577.5 million, up 10 percent from $525.1 million
in last year's fourth quarter
- Regional carrier operating income was $59.7 million compared
with $39.9 million a year ago.
- regional carrier weight per day rose 9.4 percent from the
prior year.
Menlo Worldwide
- ---------------
For the fourth quarter of 2003, Menlo Worldwide reported:
- an operating loss of $2.6 million, which included the $7.8
million restructuring charge for Menlo Worldwide Forwarding,
compared with operating income of $18.2 million in the fourth
quarter of 2002, which included the $5.7 million net gain
from settlement of the Express Mail contract.
- revenue of $777.2 million compared with $753.3 million in the
prior year's fourth quarter.
For the fourth quarter, Menlo Worldwide Forwarding reported:
- an operating loss of $14.0 million, which included the $7.8
million restructuring charge. This compares with operating
income of $4.6 million in the fourth quarter of 2002, which
included the $5.7 million pre-tax gain from the Express Mail
contract settlement.
- revenue of $524.4 million, up 5 percent from $497.4 million
in the fourth quarter of 2002
- international revenue per day grew 12 percent compared with
the prior-year period on a weight-per-day increase of 20.4
percent.
- North American revenue per day fell by 6.8 percent on a 3.4
percent increase in weight per day and a 9.9 percent decline
in yield that was due primarily to a product mix change to
more second-day and deferred freight.
PAGE 2 OF 6
For the fourth quarter of 2003, Menlo Worldwide Logistics reported:
- operating income of $6.1 million compared to $8.6 million a
year ago
- revenue of $252.8 million compared to $255.9 million in the
prior-year period.
For the fourth quarter of 2003, activities at Menlo Worldwide Other,
which consists of the results of Vector SCM, reported operating income
of $5.4 million, up 9 percent from $4.9 million in the fourth quarter
of 2002.
Other
- -----
CNF's "Other" operations reported operating income of $565,000 in the
fourth quarter.
First-Quarter Outlook
- ---------------------
First-quarter diluted earnings per share are expected to be between 29
cents and 37 cents compared to first-quarter 2003 diluted earnings per
share of 30 cents, which included an 8 cent benefit. CNF's tax rate is
expected to be 39 percent.
Conference Call
- ---------------
CNF will host a conference call for shareholders and the investment
community to discuss fourth-quarter results at 12:00 p.m. Eastern time
(9:00 a.m. Pacific) tomorrow. The call can be accessed by dialing
(888) 428-4480 or (651) 291-5254 (for international callers only) 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 web cast at the investor
relations section of the CNF web site at www.cnf.com and at
www.streetevents.com. An audio replay will be available for one week
following the call at (800) 475-6701, access code 712336. The replay
will also be available for one week on demand at the web sites
providing access to the live call.
Investors may obtain additional operating data from CNF's
Consolidated Financial Summaries, which will be posted on the investor
relations section of the CNF web site at www.cnf.com later today.
CNF Inc. is a $5.1 billion management company of global supply
chain services with businesses in regional trucking, air freight, ocean
freight, customs brokerage, global logistics management and trailer
manufacturing.
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
PAGE 3 OF 6
statements, including any projections and objectives of management for
future operations, any statements regarding contributions to pension
plans, any statements as to the adequacy of reserves, any statements
regarding the possible outcome of claims brought against CNF, any
statements regarding future economic conditions or performance, 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, the creditworthiness of CNF's customers and
their ability to pay for services rendered, increasing competition and
pricing pressure, changes in fuel prices, the effects of the cessation
of the air carrier operations of Emery Worldwide Airlines, the
possibility of additional unusual charges and other costs and expenses
related to Menlo Worldwide's forwarding operations, the possibility
that CNF may, from time to time, be required to record impairment
charges for goodwill and other long-lived assets, the possibility of
defaults under CNF's $385 million credit agreement and other debt
instruments (including defaults resulting from additional unusual
charges), and the possibility that CNF may be required to pledge
collateral to secure some of its indebtedness or to repay other
indebtedness in the event that the ratings assigned to its long-term
senior debt by credit rating agencies are reduced, labor matters,
enforcement of and changes in governmental regulations, environmental
and tax matters, the February 2000 crash of an EWA aircraft and related
litigation, and matters relating to CNF's 1996 spin-off of Consolidated
Freightways Corporation (CFC), including the possibility that CFC's
multi-employer pension plans may assert claims against CNF, and matters
relating to CNF's defined benefit pension plans. The factors included
herein and in Item 7 of CNF's 2002 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.
PAGE 4 OF 6
CNF INC.
STATEMENTS OF CONSOLIDATED INCOME
(Dollars in thousands except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------- ----------- ----------- -----------
2003 2002 2003 2002
----------- ----------- ----------- -----------
REVENUES $1,354,814 $1,278,625 $5,104,332 $4,762,119
Costs and Expenses
Operating expenses 1,136,486 1,075,529 4,283,489 3,979,137
Selling, general and
administrative
expenses 129,873 115,974 496,784 461,807
Depreciation 32,444 33,100 132,622 139,355
----------- ----------- ----------- -----------
1,298,803 1,224,603 4,912,895 4,580,299
----------- ----------- ----------- -----------
OPERATING INCOME 56,011 54,022 191,437 181,820
Other expense, net (7,668) (10,727) (35,421) (35,576)
----------- ----------- ----------- -----------
Income before Taxes 48,343 43,295 156,016 146,244
Income Tax Provision 19,464 16,885 63,992[c] 32,035[d]
----------- ----------- ----------- -----------
Income from Continuing
Operations 28,879 26,410 92,024 114,209
Loss from Discontinuance,
net of tax - (2,259)[b] - (12,398)
----------- ----------- ----------- -----------
Net Income 28,879 24,151 92,024 101,811
Preferred Stock Dividends 2,114 2,200 8,239 8,250
----------- ----------- ----------- -----------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $26,765 $21,951 $83,785 $93,561
=========== =========== =========== ===========
Weighted-Average Common
Shares Outstanding
Basic 49,709,146 49,327,589 49,537,945 49,139,134
Diluted [a] 57,109,665 56,741,862 56,725,667 56,655,570
Earnings per Common Share
Basic
Net income from
continuing
operations $0.54 $0.49 $1.69 $2.16
Loss from
discontinuance,
net of tax - (0.04) - (0.26)
----------- ----------- ----------- -----------
Net Income Available
to Common Shareholders $0.54 $0.45 $1.69 $1.90
=========== =========== =========== ===========
Diluted [a]
Net income from
continuing
operations $0.49 $0.45 $1.57 $1.96
Loss from
discontinuance,
net of tax - (0.04) - (0.22)
----------- ----------- ----------- -----------
Net Income Available
to Common Shareholders $0.49 $0.41 $1.57 $1.74
=========== =========== =========== ===========
[a] Includes the dilutive effect of stock options, Series B (TASP) preferred
stock, and Series A "TECONs" convertible preferred stock of subsidiary
trust.
[b] Includes a $2.9 million net-of-tax gain on final Priority Mail settlement
and a $13.0 million net-of-tax loss related to the business failure of CFC.
Includes a $2.9 million net-of-tax third-quarter gain on final Priority
Mail settlement and third-quarter and fourth-quarter net-of-tax losses of
$13.0 million and $2.3 million, respectively, related to the business
failure of CFC.
[c] Excludes tax impact on a third-quarter non-deductible loss for the
resolution of a hazardous materials violation case with the U.S.
government.
[d] Includes tax provision of $57.0 million for the twelve months ended
December 31, 2002, partially offset by a $25.0 million third-quarter
reversal of accrued taxes related to the settlement with the IRS of
aircraft maintenance issues.
OPERATING SEGMENTS
REVENUES
Con-Way Transportation
Services $577,472 $525,089 $2,212,597 $2,011,477
Menlo Worldwide
Forwarding 524,405 497,367 1,881,496 1,778,712
Logistics 252,775 255,947 1,009,952 969,089
----------- ----------- ----------- -----------
777,180 753,314 2,891,448 2,747,801
----------- ----------- ----------- -----------
CNF Other 162 222 287 2,841
----------- ----------- ----------- -----------
$1,354,814 $1,278,625 $5,104,332 $4,762,119
=========== =========== =========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation
Services $58,011 $36,700 $195,343 $147,154
Menlo Worldwide
Forwarding (14,026) 4,620 (47,579) (11,980)
Logistics 6,101 8,644 25,312 31,827
Other 5,360 4,921 20,718 18,188
----------- ----------- ----------- -----------
(2,565) 18,185 (1,549) 38,035
----------- ----------- ----------- -----------
CNF Other 565 (863) (2,357) (3,369)
----------- ----------- ----------- -----------
$56,011 $54,022 $191,437 $181,820
=========== =========== =========== ===========
ITEMS AFFECTING COMPARABILITY OF OPERATING INCOME (LOSS) FOR THE PERIODS
PRESENTED:
Con-Way Transportation
Services -
Net gain from the
sale of a property $ - $ - $ - $ 8,675
Menlo Worldwide -
Forwarding -
Restructuring charge (7,800) - (7,800) -
Net gains from payments
under the Air
Transportation Safety
and System Stabilization
Act - - 7,230 9,895
Loss for the resolution
of a hazardous materials
violation case - - (6,500) -
Express Mail settlement - 5,715 - 5,715
Logistics -
Net gain from a contract
termination - - - 1,850
CNF Other -
Loss from uncollectible
non-trade receivables - - - (3,595)
Net gain from the sale
of a property - - - 2,367
----------- ----------- ----------- -----------
Total $(7,800) $5,715 $(7,070) $24,907
=========== =========== =========== ===========
CNF INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31,
2003 2002
ASSETS ----------- -----------
Current assets $1,318,022 $1,268,488
Property, plant and
equipment, net 997,455 1,015,354
Other assets 435,718 455,919
----------- -----------
Total Assets $2,751,195 $2,739,761
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $804,425 $873,054
Long-term debt, guarantees
and capital leases 536,314 557,610
Other long-term liabilities
and deferred credits 466,649 466,099
Preferred stock -
subsidiary trust 125,000 125,000
Shareholders' equity 818,807 717,998
----------- -----------
Total Liabilities and
Shareholders' Equity $2,751,195 $2,739,761
=========== ===========