Exhibit 99
CNF
2855 CAMPUS DRIVE, SUITE 300
SAN MATEO, CA 94403
(650) 378-5200 NEWS RELEASE
Contact: Patrick Fossenier
(650) 378-5353
CNF INC. NET INCOME FROM CONTINUING OPERATIONS CLIMBS 57
PERCENT IN THIRD-QUARTER 2005
SAN MATEO, Calif-October 19, 2005-CNF Inc. (NYSE:CNF) today reported record
third-quarter 2005 after-tax income from continuing operations of $62.7
million (after preferred stock dividends), or $1.12 per diluted share, up 57
percent from the third quarter of 2004. This compared with third-quarter
2004 after-tax income from continuing operations of $39.8 million, or 72
cents per diluted share.
Operating income in the third quarter was $103.0 million, up 31 percent from
$78.4 million in the same quarter a year ago. Revenue for the third quarter
of 2005 was $1.10 billion, up 13 percent from $973.6 million in third-quarter
2004. The effective tax rate in the third quarter was 35 percent compared
with 39 percent in the third quarter of 2004. Higher tax-exempt income,
increased foreign tax credits, and the classification of higher foreign
income tax from Vector SCM in operating income contributed to a lower
effective tax rate in the third quarter of 2005 compared to 2004.
Net income for common shareholders in the third quarter of 2005 was $66.0
million, or $1.18 per diluted share. Net income for common shareholders in
the third quarter included a 6-cents-per-diluted-share net gain related to
discontinued operations. This compares with a net loss for common
shareholders of $216.2 million, or $3.90 per diluted share, in the third
quarter of 2004, due to impairment charges from the company's forwarding unit
sold in December 2004.
For the first nine months of 2005, the company reported after-tax net income
from continuing operations of $167.6 million, or $2.99 per diluted share
(after preferred stock dividends). Net income for common shareholders
through September 30, 2005 was $164.1 million, or $2.93 per diluted share,
and includes a net loss from discontinued operations of 6 cents per share.
Discontinued operations in the third quarter and first nine months of 2005
reflect the net effect of tax benefits and estimates for litigation and other
losses related to discontinued businesses.
Total revenue for the first nine months of 2005 was $3.08 billion and
operating income in the same period was $279.8 million.
Commenting on the quarterly results and operations, Douglas Stotlar, CNF
president and chief executive officer, said, "We achieved solid growth in
both our trucking and supply chain management operations at a faster rate of
growth than the overall economy. We have good cost controls in place with
leverage for continued improvement. We are an efficient yet flexible company
and that served us well during the recent Katrina and Rita hurricanes, where
the financial impact was negligible because of our ability to quickly reroute
our services and limit disruption of operations. The company and its
employees responded to the crisis by donating more than $550,000 to the
American Red Cross for hurricane relief."
The company repurchased $37.0 million in company stock in the third quarter
as part of a previously announced $300 million stock repurchase program to
occur over two years. To date, CNF has repurchased $111.6 million in company
stock under the program. The company expects to repurchase approximately $38
million in shares in the fourth quarter of 2005.
CON-WAY TRANSPORTATION SERVICES
For the third quarter of 2005, Con-Way Transportation Services reported:
* Operating income of $94.4 million, up 34 percent from $70.7 million in
the year-ago period.
* Revenue of $741.4 million, an increase of 11 percent from last year's
third-quarter revenue of $666.1 million.
* Regional-carrier yield increased 4 percent from the prior-year quarter.
Without fuel surcharges, yield declined 1 percent.
* The regional-carrier group achieved an improved operating ratio of 87.3
percent compared to 89.0 in the third 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 third quarter of 2005, Menlo
Worldwide reported:
* Total segment operating income of $12.1 million, up 44 percent, compared
with $8.4 million in the third quarter of 2004.
* Menlo Logistics' revenue of $354.8 million, up 16 percent from the
prior-year quarter of $305.5 million.
* Operating income for Menlo Logistics was $7.9 million in the third
quarter, up 38 percent from $5.7 million in the third quarter of 2004
due primarily from increased revenue from technology customers.
* Operating income at Vector SCM was $4.2 million in the third quarter, up
56 percent from $2.7 million in the prior-year quarter from higher
European operating income.
OTHER
CNF's "other" operations, which includes the results of Road Systems trailer
manufacturing and corporate activities, reported an operating loss of $2.6
million, mostly due to an insurance settlement, compared to an operating loss
of $635,000 in the third quarter of 2004.
FOURTH-QUARTER OUTLOOK
Fourth-quarter 2005 diluted earnings per share from continuing operations are
expected to be between $0.93 and $1.01. This compares with 74 cents per
diluted share earned from continuing operations in the fourth quarter of
2004. Excluding tax related to Vector SCM's foreign income, CNF's tax rate
is expected to be 37 percent in the fourth quarter.
CONFERENCE CALL
CNF will host a conference call for shareholders and the investment community
to discuss third-quarter results at 11:00 Eastern Daylight Time (8:00 PDT) on
Thursday, October 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 highlight.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 two weeks following the call at (800) 642-
1687 or (706)645-9291 (for international callers), using access code
9547228. The replay will also be available at the same web casting sites
providing access to the live call.
CNF is a $4 billion freight 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 Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES $1,099,151 $ 973,619 $3,080,709 $2,744,921
Costs and Expenses
Operating expenses 884,255 792,075 2,471,555 2,231,920
Selling, general and
administrative expenses 82,471 76,660 246,195 230,888
Depreciation 29,392 26,449 83,110 76,951
----------- ----------- ----------- -----------
996,118 895,184 2,800,860 2,539,759
----------- ----------- ----------- -----------
OPERATING INCOME 103,033 78,435 279,849 205,162
Other Expense, net (3,490) (9,723) (17,098) (29,460)
----------- ----------- ----------- -----------
Income Before Taxes 99,543 68,712 262,751 175,702
Income Tax Provision 35,070 26,798 89,271[b] 68,524
----------- ----------- ----------- -----------
Income from Continuing
Operations 64,473 41,914 173,480 107,178
----------- ----------- ----------- -----------
Discontinued Operations,
net of tax
Gain (Loss) from
Disposal 3,335 (260,490) (3,490) (260,490)
Income from
Discontinued
Operations - 4,444 - 3,114
----------- ----------- ----------- -----------
3,335 (256,046) (3,490) (257,376)
Net Income (Loss) 67,808 (214,132) 169,990 (150,198)
Preferred Stock Dividends 1,816 2,075 5,841 6,119
----------- ----------- ----------- -----------
NET INCOME (LOSS)
APPLICABLE TO COMMON
SHAREHOLDERS $ 65,992 $ (216,207) $ 164,149 $ (156,317)
=========== =========== =========== ===========
Weighted-Average Common
Shares Outstanding
Basic 52,081,891 50,670,398 52,198,251 50,150,987
Diluted [a] 55,966,289 55,408,636 56,259,541 56,527,092
Earnings (Loss) Per
Common Share
Basic
Net income from
Continuing
Operations $ 1.20 $ 0.79 $ 3.21 $ 2.02
Gain (Loss) from
Disposal,
net of tax 0.07 (5.15) (0.07) (5.20)
Income from
Discontinued
Operations,
net of tax - 0.09 - 0.06
----------- ----------- ----------- -----------
$ 1.27 $ (4.27) $ 3.14 $ (3.12)
=========== =========== =========== ===========
Diluted [a]
Net income from
Continuing
Operations $ 1.12 $ 0.72 $ 2.99 $ 1.83
Gain (Loss) from
Disposal,
net of tax 0.06 (4.70) (0.06) (4.61)
Income from
Discontinued
Operations,
net of tax - 0.08 - 0.06
----------- ----------- ----------- -----------
$ 1.18 $ (3.90) $ 2.93 $ (2.72)
=========== =========== =========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation
Services $ 741,366 $ 666,143 $2,095,630 $1,885,484
Menlo Worldwide
Logistics 354,797 305,479 973,782 856,234
CNF Other 2,988 1,997 11,297 3,203
----------- ----------- ----------- -----------
$1,099,151 $ 973,619 $3,080,709 $2,744,921
=========== =========== =========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation
Services $ 94,403 $ 70,661 $ 253,288 $ 183,451
Menlo Worldwide
Logistics 7,889 5,710 18,553 16,045
Vector 4,220 2,699 13,196 8,079
----------- ----------- ----------- -----------
12,109 8,409 31,749 24,124
----------- ----------- ----------- -----------
CNF Other (2,638) (635) (2,825) (2,413)
----------- ----------- ----------- -----------
103,874 78,435 282,212 205,162
----------- ----------- ----------- -----------
Reconciliation of segments
to consolidated amount:
Income tax related
to Vector,
an equity-method
investment (841) - (2,363) -
----------- ----------- ----------- -----------
$ 103,033 $ 78,435 $ 279,849 $ 205,162
=========== =========== =========== ===========
[a] All periods include the dilutive effect of restricted stock, stock options
and Series B preferred stock. The nine-month period ended September 30,
2004 also includes 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)
September 30, December 31,
2005 2004
------------ ------------
ASSETS
Current assets $ 1,463,410 $ 1,509,767
Current assets of discontinued
operations 11,118 5,128
Property, plant and equipment, net 942,073 859,321
Other assets 85,923 106,965
Non-current assets of
discontinued operations 23,747 15,220
------------ ------------
Total Assets $ 2,526,271 $ 2,496,401
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 657,612 $ 678,126
Current liabilities of discontinued
operations 35,729 34,705
Long-term debt and guarantees 582,714 601,344
Other long-term liabilities and
deferred credits 374,581 397,997
Long-term liabilities of
discontinued operations 759 6,862
Shareholders' equity 874,876 777,367
------------ ------------
Total Liabilities
and Shareholders' Equity $ 2,526,271 $ 2,496,401
============ ============