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. DOUBLES SECOND-QUARTER NET INCOME
PALO ALTO, Calif. - July 20, 2004 -- CNF Inc. (NYSE:CNF) today
reported second-quarter net income for common shareholders of $35.5
million, or 64 cents per diluted share, more than double the $16.3
million, or 31 cents per diluted share, reported in the second
quarter of 2003.
Second-quarter operating income was $73.4 million, up 97
percent from $37.3 million for the 2003 second quarter. Revenue for
the second quarter of 2004 was $1.44 billion, an increase of 17
percent from $1.24 billion in second-quarter 2003.
For the first six months of 2004, net income for common
shareholders was $59.9 million, or $1.09 per diluted share, a gain
of 86 percent from $32.2 million, or 61 cents per diluted share, in
the first six months of 2003. The first quarter of 2003 included an
after-tax net gain of $4.4 million (8 cents per diluted share) from
a payment under the Air Transportation Safety and System
Stabilization Act.
Operating income for the first six months of 2004 was $126.1
million, up 61 percent from $78.4 million in the same period a year
ago, which included the Stabilization Act payment. Revenue for the
first six months of 2004 was $2.79 billion, an increase of 14
percent from $2.44 billion in the first half of 2003.
"The second quarter of 2004 was an outstanding quarter for CNF,
driven by one of Con-Way's strongest quarters ever, as the company
benefited from the strength of the U.S. economy and the continued
consolidation of the LTL industry," said Keith Kennedy, CNF chairman
and interim chief executive officer.
"Menlo Worldwide Forwarding made a substantial improvement
in its results, reducing its operating loss to $2.4 million, a
reduction of $11.5 million when compared to last year's second
quarter. This improvement came from higher business levels
worldwide and continued cost reductions."
CNF's effective tax rate in the second quarter of 2004 was 39
percent. During the quarter, the company issued $300 million of 30-
year debt and retired $128.9 million of convertible subordinated
debentures.
Con-Way Transportation Services
For the second quarter of 2004, Con-Way Transportation Services
reported:
- record operating income of $67.1 million, up 54 percent from
$43.6 million in the year-ago period,
- revenue of $657.5 million, an increase of 21 percent from
$541.4 million in the second quarter of 2003,
- regional-carrier tonnage per day was up 16 percent from the
prior-year period,
- the regional carrier group achieved an operating ratio of 88.8.
On July 16, a federal appeals court in Washington, D.C.
overturned the government's new, so-called "hours of service"
regulations that govern the number of hours truck drivers work in a
day. "The hours of service issue has been ongoing for several years
and this latest development will have a minimal effect on Con-Way's
operations," said Gerald L. Detter, president and chief executive
officer of Con-Way Transportation Services.
Menlo Worldwide
For the second quarter of 2004, Menlo Worldwide reported:
- operating income of $7.2 million compared with an
operating loss of $3.9 million in the year-ago period,
- revenue of $783.2 million, up 13 percent from $695.4
million in the second quarter of 2003.
For the second quarter of 2004, Menlo Worldwide Forwarding reported:
- an operating loss of $2.4 million compared with an operating
loss of $13.8 million in the year-ago period,
- revenue of $517.4 million, up 17 percent from $442.4 million a
year ago,
- international air freight revenue per day grew 23 percent from
the prior-year period on a 21 percent increase in tonnage per day,
- North American air freight revenue per day rose 7 percent on a
7 percent increase in tonnage per day.
For the second quarter of 2004, Menlo Worldwide Logistics reported:
- operating income of $6.5 million, up 4 percent from $6.3
million a year ago,
- revenue of $265.9 million, an increase of 5 percent from
$253.0 million in the prior-year period.
For the second quarter of 2004, activities at Menlo Worldwide Other,
which consists of the results of Vector SCM, generated a profit of
$3.0 million compared with $3.6 million in the second quarter of
2003. Vector's results depend on GM's volumes and cost reduction
targets.
Other
CNF's "Other" operations, which include the results of Road Systems
and corporate activities, reported an operating loss of $0.9 million
compared with an operating loss of $2.3 million in the second
quarter of 2003, which included a $1.1 million loss on the sale of a
property.
Outlook
Third-quarter diluted earnings per share from continuing operations
are expected to be between 71 cents and 81 cents.
CNF's tax rate is expected to be 39 percent in the third quarter.
Conference Call
CNF will host a conference call for shareholders and the investment
community to discuss second-quarter results at 11:00 a.m. Eastern
Daylight Time (8:00 a.m. Pacific Daylight Time) on Wednesday, July
21. 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 or (320) 365-3844 (for international callers) using
access code 734087. 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 (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.
# # #
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 Six Months Ended
June 30, June 30,
------------------------ ------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
REVENUES $1,441,726 $1,236,905 $2,790,131 $2,443,146
Costs and Expenses
Operating expenses 1,207,450 1,042,036 2,345,954 2,055,707
Selling, general and
administrative
expenses 128,853 124,053 253,927 242,343
Depreciation 32,031 33,496 64,116 66,728
----------- ----------- ----------- -----------
1,368,334 1,199,585 2,663,997 2,364,778
----------- ----------- ----------- -----------
OPERATING INCOME 73,392 37,320 126,134 78,368[b]
Other expense, net (11,908) (7,207) (21,324) (18,820)
----------- ----------- ----------- -----------
Income before Taxes 61,484 30,113 104,810 59,548
Income Tax Provision 23,979 11,744 40,876 23,224
----------- ----------- ----------- -----------
Net Income 37,505 18,369 63,934 36,324
Preferred Stock
Dividends 2,022 2,069 4,044 4,095
----------- ----------- ----------- -----------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $35,483 $16,300 $59,890 $32,229
=========== =========== =========== ===========
Weighted-Average Common
Shares Outstanding
Basic 50,319,659 49,494,145 50,075,246 49,445,348
Diluted [a] 56,883,738 57,127,187 56,981,429 54,004,772
Earnings Per Common Share
Basic $0.71 $0.33 $1.20 $0.65
=========== =========== =========== ===========
Diluted [a] $0.64 $0.31 $1.09 $0.61
=========== =========== =========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation
Services $657,541 $541,446 $1,251,385 $1,060,554
Menlo Worldwide
Forwarding 517,376 442,421 1,018,893 888,043
Logistics 265,857 253,012 518,647 494,514
----------- ----------- ----------- -----------
783,233 695,433 1,537,540 1,382,557
CNF Other 952 26 1,206 35
----------- ----------- ----------- -----------
$1,441,726 $1,236,905 $2,790,131 2,443,146
=========== =========== =========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation
Services $67,136 $43,575 $118,241 $80,767
Menlo Worldwide
Forwarding (2,355) (13,818) (8,764) (19,249)[b]
Logistics 6,549 6,303 13,055 12,339
Other 2,988 3,572 5,380 6,548
----------- ----------- ----------- -----------
7,182 (3,943) 9,671 (362)
CNF Other (926) (2,312) (1,778) (2,037)
----------- ----------- ----------- -----------
$73,392 $37,320 $126,134 $78,368
=========== =========== =========== ===========
[a] The six months ended June 30, 2003 include the dilutive effect of stock
options and Series B preferred stock. All other periods presented include
the dilutive effect of stock options, Series B preferred stock,and
convertible subordinated debentures, which were redeemed on June 1, 2004.
[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)
June 30, December 31,
2004 2003
----------- -----------
ASSETS
Current assets $1,683,659 $1,316,695
Property, plant and equipment, net 981,828 997,455
Other assets 375,456 439,584
----------- -----------
Total Assets $3,040,943 $2,753,734
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $875,446 $809,611
Long-term debt, guarantees
and capital leases 813,793 665,180
Other long-term liabilities
and deferred credits 453,312 460,135
Shareholders' equity 898,392 818,808
----------- -----------
Total Liabilities and
Shareholders' Equity $3,040,943 $2,753,734
=========== ===========