Exhibit 99
CNF
3240 HILLVIEW AVENUE
PALO ALTO, CA 94304-1297
(650) 494-2900 NEWS RELEASE
Contacts:
Media - James R. Allen
(650) 813-5335
Investors - Patrick Fossenier
(650) 813 -5353
CNF INC. NET INCOME FROM CONTINUING OPERATIONS
CLIMBS 96 PERCENT IN SECOND-QUARTER 2005
PALO ALTO, California - July 19, 2005 - CNF Inc. (NYSE:CNF) today
reported second-quarter 2005 after-tax income from continuing operations of
$66.1 million (after preferred stock dividends), or $1.19 per diluted share,
up 96 percent from second-quarter 2004. This compares with second-quarter
2004 after-tax income from continuing operations of $33.8 million, or 61
cents per diluted share.
Income from continuing operations includes a 12-cent-per-diluted-share
tax benefit consisting of a $7.0 million tax adjustment from settlement with
the IRS of previous tax filings. Excluding the tax adjustment, the effective
tax rate for the second quarter was 38 percent compared with 39 percent in
the same quarter of 2004.
Operating income in the second quarter was a record $103.6 million, up
45 percent from $71.3 million in the same quarter a year ago. Revenue for the
second quarter of 2005 was $1.03 billion, up 12 percent from $924.4 million
in second-quarter 2004.
Net income for common shareholders in the second quarter was $69.1
million, or $1.24 per diluted share, up 95 percent from second-quarter 2004.
This compares with net income for common shareholders of $35.5 million,
or 64 cents per diluted share in the second quarter a year ago. Net income
for common shareholders included a $3.0 million gain (5 cents per diluted
share) from discontinued operations consisting mostly of tax adjustments for
Emery Worldwide Airlines.
Commenting on the quarterly results and operations, Douglas Stotlar, CNF
president and chief executive officer, said, "The company is realizing the
benefits of operating as a single enterprise. Our growth in the second
quarter was the result of our ability to leverage the resources of all of our
companies while managing our businesses for the future. We did an excellent
job in the second quarter of balancing revenues and profit growth by
maintaining cost controls and winning new business. We are pleased with our
growth in the second quarter and continue to experience strong support from
our customers. We remain optimistic about the third quarter and the remainder
of the year."
The company said it had repurchased $42.3 million in company stock in
the second quarter as part of a previously announced $300 million stock
repurchase program to occur over two years. To date, CNF has repurchased
$74.6 million in company stock under the program. The company expects to
repurchase approximately $37.5 million in shares in the third quarter of
2005.
CON-WAY TRANSPORTATION SERVICES
For the second quarter of 2005, Con-Way Transportation Services reported:
- Operating income of $95.3 million, up 49 percent from $63.9 million
in the year-ago period.
- Revenue of $713.9 million, an increase of 11 percent from last year's
second-quarter revenue of $640.9 million.
- Regional-carrier yield increased 6 percent from the prior-year quarter.
- The regional-carrier group achieved an improved operating ratio
of 86.3 percent compared to 89.6 percent in the second quarter of 2004.
MENLO WORLDWIDE
CNF's Menlo Worldwide operations include the combined results for Menlo
Logistics and the former Con-Way Logistics, which were integrated in the
second quarter, and Vector SCM. For the second quarter of 2005, Menlo
Worldwide reported:
- Total segment operating income of $10.6 million, up 27 percent,compared
with $8.3 million in the second quarter of 2004.
- Menlo Logistics' revenue of $317 million, up 12 percent from the
prior-year quarter of $282.6 million.
- Operating income for Menlo Logistics was $5.6 million in the second
quarter, up 5 percent from $5.4 million in the second quarter of 2004.
- Operating income at Vector SCM was $4.9 million in the second quarter,
up 65 percent from $3.0 million in the prior-year quarter due to higher
income from European operations for General Motors.
OTHER
CNF's "other" operations, which includes the results of Road Systems trailer
manufacturing and corporate activities, reported an operating loss of $0.8
million compared to a loss of $0.9 million in the second quarter of 2004.
THIRD-QUARTER 2005 OUTLOOK
Third-quarter 2005 diluted earnings per share from continuing operations are
expected to be between $1.00 and $1.08 cents. This compares with 72 cents per
diluted share earned from continuing operations in the third quarter of 2004.
CNF's tax rate is expected to be 38 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. PDT) on Wednesday, July 20. 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. Related financial and operating
statistics to be discussed on the conference call are available on the
company's website at www.cnf.com/investor relations/fin hilight.asp. The call
will also be available through a live web cast at the investor relations
section of the CNF web site www.cnf.com and at www.streetevents.com. An audio
replay will be available for one week following the call at (800) 642-1687 or
(706) 645-9291 (for international callers), using access code 7127850. The
replay will also be available for two weeks on demand at the same web casting
sites providing access to the live call.
CNF is a $4.0 billion transportation and logistics company with businesses in
less-than-truckload motor carriage, truckload carriage, air freight,
logistics, warehousing, supply chain 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 concerning proposed new products or services, any statements
regarding CNF's estimated future contributions to pension plans, any
statements as to the adequacy of reserves, any statements regarding the
outcome of any claims that may be 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 defaults under CNF's $400 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, 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, matters
relating to the sale of Menlo Worldwide Forwarding, Inc., including CNF's
obligation to indemnify the buyer for certain losses in connection the sale,
and matters relating to CNF's defined benefit pension plans. The factors
included herein and in Item 7 of CNF's 2004 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 OPERATIONS
(Dollars in thousands except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES $1,033,875 $ 924,382 $1,981,558 $1,771,302
Costs and Expenses
Operating expenses 818,567 748,028 1,587,300 1,439,845
Selling, general and
administrative
expenses 84,498 79,783 163,724 154,228
Depreciation 27,250 25,292 53,718 50,502
----------- ----------- ----------- -----------
930,315 853,103 1,804,742 1,644,575
----------- ----------- ----------- -----------
OPERATING INCOME 103,560 71,279 176,816 126,727
----------- ----------- ----------- -----------
Other Expense, net (6,165) (12,560) (13,608) (19,737)
----------- ----------- ----------- -----------
Income Before Taxes 97,395 58,719 163,208 106,990
Income Tax Provision 29,239[b] 22,900 54,201[b] 41,726
----------- ----------- ----------- -----------
Income from Continuing
Operations 68,156 35,819 109,007 65,264
----------- ----------- ----------- -----------
Discontinued Operations,
net of tax
Gain (Loss)from
Disposal 2,951 - (6,825) -
Income (Loss)from
Discontinued
Operations - 1,686 - (1,330)
----------- ----------- ----------- -----------
2,951 1,686 (6,825) (1,330)
Net Income 71,107 37,505 102,182 63,934
Preferred Stock
Dividends 2,036 2,022 4,025 4,044
----------- ----------- ----------- -----------
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS $ 69,071 $ 35,483 $ 98,157 $ 59,890
=========== =========== =========== ===========
Weighted-Average Common
Shares Outstanding
Basic 52,166,814 50,319,659 52,257,396 50,075,246
Diluted [a] 56,016,513 56,883,738 56,333,732 56,981,429
Earnings (Loss) Per
Common Share
Basic
Net income from
Continuing
Operations $ 1.27 $ 0.67 $ 2.01 $ 1.22
Gain (Loss)from
Disposal, net
of tax 0.05 - (0.13) -
Income (Loss) from
Discontinued
Operations, net
of tax - 0.04 - (0.02)
----------- ----------- ----------- -----------
$ 1.32 $ 0.71 $ 1.88 $ 1.20
=========== =========== =========== ===========
Diluted [a]
Net income from
Continuing
Operations $ 1.19 $ 0.61 $ 1.87 $ 1.11
Gain (Loss) from
Disposal, net
of tax 0.05 - (0.12) -
Income (Loss) from
Discontinued
Operations, net
of tax - 0.03 - (0.02)
----------- ----------- ----------- -----------
$ 1.24 $ 0.64 $ 1.75 $ 1.09
=========== =========== =========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation
Services $ 713,939 $ 640,861 $1,354,264 $1,219,341
Menlo Worldwide
Logistics 317,036 282,569 618,985 550,755
CNF Other 2,900 952 8,309 1,206
----------- ----------- ----------- -----------
$1,033,875 $ 924,382 $1,981,558 $1,771,302
=========== =========== =========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation
Services $ 95,329 $ 63,859 $ 158,885 $ 112,790
Menlo Worldwide
Logistics 5,634 5,358 10,664 10,335
Vector 4,941 2,988 8,976 5,380
----------- ----------- ----------- -----------
10,575 8,346 19,640 15,715
----------- ----------- ----------- -----------
CNF Other (822) (926) (187) (1,778)
----------- ----------- ----------- -----------
105,082 71,279 178,338 126,727
----------- ----------- ----------- -----------
Reconciliation of
segments to
consolidated amount:
Income tax related
to Vector, an
equity-method
investment (1,522) - (1,522) -
----------- ----------- ----------- -----------
$ 103,560 $ 71,279 $ 176,816 $ 126,727
=========== =========== =========== ===========
[a] The periods ended June 30, 2005 include the dilutive effect of restricted
stock, stock options and Series B preferred stock. The periods ended June
30, 2004 also include the dilutive effect of convertible subordinated
debentures, which were redeemed on June 1, 2004.
[b] Includes a $7.0 million second-quarter tax benefit ($0.12 per diluted share)
from the reversal of accrued taxes related to the settlement with the IRS
of previous tax filings.
CNF INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2005 2004
----------- -----------
ASSETS
Current assets $1,344,501 $1,509,767
Current assets of discontinued
operations 6,411 5,128
Property, plant and equipment, net 894,830 859,321
Other assets 86,767 106,965
Non-current assets of discontinued
operations 15,958 15,220
----------- -----------
Total Assets $2,348,467 $2,496,401
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 562,095 $ 678,126
Current liabilities of discontinued
operations 25,644 34,705
Long-term debt and guarantees 583,939 601,344
Other long-term liabilities and
deferred credits 353,572 397,997
Long-term liabilities of discontinued
operations 729 6,862
Shareholders' equity 822,488 777,367
----------- -----------
Total Liabilities and Shareholders'
Equity $2,348,467 $2,496,401
=========== ===========