EXHIBIT 99
CNF
3240 HILLVIEW AVENUE, PALO ALTO, CA 94304-1297
(650) 494-2900
NEWS RELEASE
Contacts:
Investors - Patrick Fossenier
(650) 813-5353
Media -- Nancy Colvert
(650) 813-5336
CNF INC. REPORTS 53 PERCENT INCREASE IN NET INCOME FOR COMMON
SHAREHOLDERS IN FIRST QUARTER OF 2004
PALO ALTO, Calif. - April 19, 2004 -- CNF Inc. (NYSE:CNF)
today reported first-quarter net income for common shareholders
of $24.4 million, or 45 cents per diluted share, up 53 percent
from the first quarter of 2003. Net income for common
shareholders in the first quarter of 2003 was $15.9 million, or
30 cents per diluted share, and included a $4.4 million after-tax
net gain (8 cents per diluted share) from a payment under the Air
Transportation Safety and System Stabilization Act.
Operating income for the first quarter of 2004 was $52.7
million, up 28 percent from $41.0 million in the same quarter a
year ago, which included the payment noted above. Revenue for
the first quarter of 2004 was $1.35 billion, an increase of 12
percent from $1.21 billion in first-quarter 2003.
CNF's effective tax rate was 39 percent in both periods.
"With the operating leverage and strong productivity of our
operating units, the improving U.S. economy is evident in our
bottom line," said CNF President and Chief Executive Officer
Gregory L. Quesnel. "Con-Way's operating income rose 37 percent
from the first quarter of 2003 on revenue growth of 14 percent.
Menlo Worldwide's forwarding and logistics units also produced
improved operating results. We're pleased that the forwarding
unit continued its double-digit international revenue growth and
that North American air freight revenue increased slightly for
the first time in more than three years."
Con-Way Transportation Services
For the first quarter, Con-Way Transportation Services reported:
- operating income of $51.1 million, up 37 percent from $37.2
million in the year-ago period.
- revenue of $593.8 million, an increase of 14 percent from
last year's first-quarter revenue of $519.1 million,
- regional carrier weight per day that was 11 percent higher
than the prior-year period.
Menlo Worldwide
For the first quarter of 2004, Menlo Worldwide reported:
- operating income of $2.5 million compared with
operating income of $3.6 million in the year-ago
period, which included the $7.2 million (pre-tax) net
gain from the payment under the Air Transportation
Safety and System Stabilization Act,
- revenue of $754.3 million, up 10 percent from $687.1
million in the first quarter of 2003.
For the first quarter of 2004, Menlo Worldwide Forwarding reported:
- an operating loss of $6.4 million compared with an operating
loss of $5.4 million in the year-ago period, which included the
$7.2 million (pre-tax) net gain from the payment noted above,
- revenue of $501.5 million, up 13 percent from $445.6 million
a year ago,
- North American air freight revenue per day rose 1 percent on
a 7 percent increase in weight per day,
- international air freight revenue per day grew 15 percent on
a weight-per-day increase of 20 percent.
For the first quarter of 2004, Menlo Worldwide Logistics reported:
- operating income of $6.5 million, up 8 percent from
operating income of $6.0 million a year ago,
- revenue of $252.8 million, up 5 percent from $241.5 million
in the prior-year period.
For the first quarter of 2004, activities at Menlo Worldwide
Other, which consists of the results of Vector SCM, reported
operating income of $2.4 million compared with operating income
of $3.0 million in the first quarter of 2003. Vector's new
contract with General Motors provides for a management fee with
any additional amounts dependent on Vector's ability to help GM
attain its annual cost reduction targets. Any additional amounts
will therefore not be recognized until earned later in the year.
Other
CNF's "Other" operations, which include the results of Road
Systems and corporate activities, reported an operating loss of
$852,000 in the first quarter due to a property sale.
Outlook
Second-quarter diluted earnings per share from continuing
operations are expected to be between 52 cents and 60 cents.
Conference Call
CNF will host a conference call for shareholders and the
investment community to discuss first-quarter results at 10:00
a.m. Eastern time (7:00 a.m. Pacific) on Tuesday, April 20. The
call can be accessed by dialing (888) 423-3281 or (612) 332-0228
(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. Related
financial and operating statistics to be discussed on the
conference call are available on the company's web site at
www.cnf.com/investor_relations/fin_hilight.asp. The call will
also be available through a live webcast 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 723137.
The replay will also be available for one week on demand at the
web sites providing access to the live call.
CNF (NYSE:CNF) 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. The company is
headquartered in Palo Alto, Calif.
# # #
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 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 repay certain 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, 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
2003 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.
CNF INC.
STATEMENTS OF CONSOLIDATED INCOME
(Dollars in thousands except per share amounts)
Three Months Ended
March 31,
----------------------------
2004 2003
----------- -----------
REVENUES $1,348,405 $1,206,241
Costs and Expenses
Operating expenses 1,138,504 1,013,671
Selling, general and
administrative expenses 125,074 118,290
Depreciation 32,085 33,232
----------- -----------
1,295,663 1,165,193
----------- -----------
OPERATING INCOME 52,742 41,048 [b]
Other expense, net (9,416) (11,613)
----------- -----------
Income before Taxes 43,326 29,435
Income Tax Provision 16,897 11,480
----------- -----------
Net Income 26,429 17,955
Preferred Stock Dividends 2,022 2,026
----------- -----------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $24,407 $15,929
=========== ===========
Weighted-Average Common Shares Outstanding
Basic 49,835,663 49,396,071
Diluted [a] 57,125,185 53,652,665
Earnings Per Common Share
Basic $0.49 $0.32
=========== ===========
Diluted $0.45 $0.30
=========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation Services $593,844 $519,108
Menlo Worldwide
Forwarding 501,517 445,622
Logistics 252,790 241,502
----------- -----------
754,307 687,124
CNF Other 254 9
----------- -----------
$1,348,405 $1,206,241
=========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation Services $51,105 $37,192
Menlo Worldwide
Forwarding (6,409) (5,431) [b]
Logistics 6,506 6,036
Other 2,392 2,976
----------- -----------
2,489 3,581
CNF Other (852) 275
----------- -----------
$52,742 $41,048
=========== ===========
[a] 2004 includes the dilutive effect of stock options, Series B ("TASP")
preferred stock, and convertible debentures. 2003 includes the dilutive
effect of stock options and Series B ("TASP") preferred stock.
[b] Includes a $7.2 million net gain ($0.08 per diluted share) from a
payment under the Air Transportation Safety and System Stabilization Act.
CNF INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
2004 2003
----------- -----------
ASSETS
Current assets $1,404,193 $1,316,695
Property, plant and equipment, net 975,586 997,455
Other assets 435,156 439,584
----------- -----------
Total Assets $2,814,935 $2,753,734
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $844,802 $809,611
Long-term debt, guarantees and
capital leases 651,272 665,180
Other long-term liabilities and
deferred credits 467,378 460,135
Shareholders' equity 851,483 818,808
----------- -----------
Total Liabilities and
Shareholders' Equity $2,814,935 $2,753,734
=========== ===========
Reflects adoption of FASB Interpretation No. 46 ("FIN 46R") effective in the
first quarter of 2004, under which CNF deconsolidated a subsidiary trust
holding Term Convertible Securities ("TECONS"). As a result, CNF's TECONS
are no longer reported as a mezzanine security while CNF's convertible
subordinated debentures held by the subsidiary trust are reported as
long-term debt. The prior period was restated.