Exhibit 99
CNF
2855 Campus Drive, Suite 300
San Mateo, CA 94403
(650) 378-5200 NEWS RELEASE
Contacts:
Investors -- Patrick Fossenier (650)378-5353
Media -- Gary Frantz (650)378-5335
CNF INC. REPORTS RECORD NET INCOME
Full-Year Revenues, Operating Income Also Reach New Milestone
SAN MATEO, Calif.-January 24, 2006-CNF Inc. (NYSE:CNF) today reported record
fourth-quarter 2005 net income from continuing operations of $53.9 million
(after preferred stock dividends), or 97 cents per diluted share, up 30.9
percent. The results compare with fourth-quarter 2004 net income from
continuing operations of $41.1 million, or 74 cents per diluted share.
Net income to common shareholders in the 2005 fourth quarter was $51.2
million, or 92 cents per diluted share. This included a loss of 5 cents per
diluted share related to discontinued operations. The 2005 result compares to
2004 fourth-quarter net income to common shareholders of $32.2 million, or 58
cents per diluted share. The 2004 result includes a net loss of 16 cents per
diluted share related to discontinued operations.
Total revenues in the 2005 fourth quarter were $1.09 billion, an increase of
12.6 percent from $967.5 million in the fourth quarter of 2004. Operating
income grew 15.0 percent to $90.9 million compared with operating income of
$79.0 million in the same period a year ago.
For the full-year 2005, CNF reported net income from continuing operations of
$221.5 million (after preferred stock dividends), or $3.96 per diluted share.
This compares with 2004 net income from continuing operations of $142.2
million, or $2.57 per diluted share.
Including the effect of discontinued operations, net income to common
shareholders for the full-year 2005 was $215.3 million, or $3.85 per diluted
share, compared to a 2004 net loss to common shareholders of $124.1 million,
or a loss per diluted share of $2.15. The 2004 net loss to common
shareholders included a loss of $266.3 million primarily from the disposition
of the company's former forwarding unit, which was sold in December 2004.
Revenues for the full-year 2005 rose to $4.17 billion, a 12.3 percent
increase over 2004's revenues of $3.71 billion. Operating income was $370.7
million, an increase of 30.5 percent from $284.2 million in 2004.
"The CNF organization generated record revenues and income in 2005 by
providing exemplary products to the market, effective cost control and
maintaining financial discipline," said Douglas W. Stotlar, president and
CEO. "In a year that saw our organization accomplish a major transition in
executive management, the focus of our people on service excellence and
superior quality for our customers never wavered. These impressive results
are a testament to that focus, the strength and determination of our team and
the robust nature of our business model."
The effective tax rate for the fourth quarter was approximately 37 percent
and for the full-year 2005 was approximately 35 percent, compared to 39
percent in the same periods of 2004.
CON-WAY TRANSPORTATION SERVICES
For the fourth quarter of 2005, Con-Way reported:
* Operating income of $77.8 million, a fourth-quarter record, which was
22.1 percent above the $63.7 million earned in the year-ago period.
* Revenue of $721.0 million, up 11.5 percent compared to the prior-year
revenues of $646.7 million.
* Total tonnage handled by the regional carriers increased 10.7 percent
over the previous-year quarter.
* Total yield for the regional carriers increased 2.0 percent from the
prior-year quarter. Without fuel surcharge yield declined 1.6%.
* The regional carrier group achieved an operating ratio of 89.3 in the
2005 fourth quarter compared to 90.0 in fourth-quarter 2004.
For the full-year 2005, Con-Way reported:
* Record operating income of $331.1 million, up 34.0 percent from $247.2
million in 2004.
* Record revenue of $2.82 billion, up 11.2 percent from $2.53 billion in
2004.
* Total regional carrier tonnage per day increased 7.9 percent over the
previous year.
* Total yield increased 4.2 percent over last year, essentially unchanged
absent fuel surcharge.
* The regional carrier group achieved an operating ratio of 88.1 for 2005
compared to 89.9 in 2004.
MENLO WORLDWIDE
For the fourth quarter of 2005, Menlo Worldwide reported:
* Total segment operating income of $15.2 million, a 9.9 percent decrease
from $16.8 million in the fourth quarter of 2004. The 2004 fourth
quarter benefited from additional performance-based bonus payments
earned by Vector SCM.
* Menlo Logistics revenue of $365.9 million, up 14.8 percent from fourth-
quarter 2004 revenue of $318.6 million.
* Operating income from Menlo Logistics of $8.1 million, an increase of
21.7 percent over the previous-year quarter of $6.7 million, primarily
due to higher business volumes from the retail sector.
* Operating income for Vector SCM of $7.1 million compared with $10.2
million in the fourth quarter of 2004. Vector SCM's fourth-quarter 2004
results included $8.0 million of additional operating income from
revenues received as bonus payments for achieving annual contract
performance goals. No such comparable performance-based revenues were
earned in the 2005 fourth quarter or previous quarters in the year.
For the full-year 2005, Menlo Worldwide reported:
* Total segment operating income of $46.9 million, up 14.5 percent from
$41.0 million in 2004.
* Menlo Logistics revenues of $1.34 billion, up 14.0 percent from $1.17
billion in 2004.
* Operating income for Menlo Logistics of $26.7 million, up 17.4 percent
from the $22.7 million earned in 2004
* Operating income for Vector SCM of $20.3 million, up 11.0 percent
compared with $18.3 million for the full-year 2004.
OTHER OPERATIONS
CNF's "other" operations, which includes the results of Road Systems and
corporate activities, reported an operating loss of $270,000 in the fourth
quarter of 2005 compared with a $1.6 million loss in fourth-quarter 2004.
STOCK REPURCHASE PROGRAM
In its stock repurchase program, the company acquired $37.5 million in common
shares during the 2005 fourth quarter, bringing the full-year 2005 repurchase
amount to $149.1 million, representing 3,054,700 shares. The program,
approved last year, authorizes CNF to repurchase up to $300 million in stock
through 2006. The company expects to purchase approximately $37.5 million in
common shares during the first quarter of 2006.
FIRST-QUARTER 2006 OUTLOOK
First-quarter 2006 diluted earnings per share from continuing operations are
expected to be between 71 cents and 77 cents. CNF's effective tax rate is
expected to be 38 percent in the first quarter.
CONFERENCE CALL
The company plans to host a conference call for the investment community on
Wednesday, January 25 at 11:00 a.m., Eastern Standard Time (8:00 a.m.
Pacific). On the call management will review results of the quarter and year
ending on December 31.
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. The call will also be available through live internet webcast,
which can be accessed at www.cnf.com, at the investor relations page. 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.
An audio replay will be available for two weeks following the call by dialing
800-642-1687 or 706-645-9291 (for international callers) and using access
code 3296494. The replay will also be available at the same webcasting site
providing access to the live call.
CNF is a $ 4.2 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
or fuel surcharges, the effects of the cessation of the air carrier
operations of Emery Worldwide Airlines, the possibility that CNF may, from
time to time, be required to record impairment charges for long-lived assets,
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 Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES $1,088,881 $ 967,458 $4,169,590 $3,712,379
Costs and Expenses
Operating expenses 878,417 782,223 3,349,972 3,014,143
Selling, general and
administrative expenses 89,476 80,756 335,671 311,644
Depreciation 30,095 25,474 113,205 102,425
----------- ----------- ----------- -----------
997,988 888,453 3,798,848 3,428,212
----------- ----------- ----------- -----------
OPERATING INCOME 90,893 79,005 370,742 284,167
Other Expense, net (2,523) (7,884) (19,621) (37,344)
----------- ----------- ----------- -----------
Income Before Taxes 88,370 71,121 351,121 246,823
Income Tax Provision 32,602 27,854 121,873[b] 96,378
----------- ----------- ----------- -----------
Income from
Continuing Operations 55,768 43,267 229,248 150,445
----------- ----------- ----------- -----------
Discontinued Operations,
net of tax
Loss from Disposal (2,729) (18,259) (6,219) (278,749)
Income from Discontinued
Operations - 9,301 - 12,415
----------- ----------- ----------- -----------
(2,729) (8,958) (6,219) (266,334)
Net Income (Loss) 53,039 34,309 223,029 (115,889)
Preferred Stock Dividends 1,887 2,120 7,728 8,239
----------- ----------- ----------- -----------
NET INCOME (LOSS)
APPLICABLE TO
COMMON SHAREHOLDERS 51,152 32,189 215,301 (124,128)
=========== =========== =========== ===========
Weighted-Average Common
Shares Outstanding
Basic 52,175,586 51,363,137 52,192,539 50,455,006
Diluted [a] 55,879,482 56,208,868 56,213,049 56,452,629
Earnings (Loss) Per
Common Share
Basic
Net income from
Continuing Operations $ 1.03 $ 0.80 $ 4.24 $ 2.82
Loss from Disposal,
net of tax (0.05) (0.35) (0.11) (5.53)
Income from Discontinued
Operations, net of tax - 0.18 - 0.25
----------- ----------- ----------- -----------
$ 0.98 $ 0.63 $ 4.13 $ (2.46)
=========== =========== =========== ===========
Diluted [a]
Net income from
Continuing Operations $ 0.97 $ 0.74 $ 3.96 $ 2.57
Loss from Disposal,
net of tax (0.05) (0.33) (0.11) (4.94)
Income from Discontinued
Operations, net of tax - 0.17 - 0.22
----------- ----------- ----------- -----------
$ 0.92 $ 0.58 $ 3.85 $ (2.15)
=========== =========== =========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way
Transportation Services $ 721,017 $ 646,717 $2,816,647 $2,532,201
Menlo Worldwide Logistics 365,892 318,597 1,339,674 1,174,831
CNF Other 1,972 2,144 13,269 5,347
----------- ----------- ----------- -----------
$1,088,881 $ 967,458 $4,169,590 $3,712,379
=========== =========== =========== ===========
OPERATING INCOME (LOSS)
Con-Way
Transportation Services $ 77,816 $ 63,718 $ 331,104 $ 247,169
Menlo Worldwide
Logistics 8,119 6,673 26,672 22,718
Vector 7,061 10,174 20,257 18,253
----------- ----------- ----------- -----------
15,180 16,847 46,929 40,971
----------- ----------- ----------- -----------
CNF Other (270) (1,560) (3,095) (3,973)
----------- ----------- ----------- -----------
92,726 79,005 374,938 284,167
----------- ----------- ----------- -----------
Reconciliation of segments
to consolidated amount:
Income tax related to
Vector, an equity-method
investment (1,833) - (4,196) -
----------- ----------- ----------- -----------
$ 90,893 $ 79,005 $ 370,742 $ 284,167
=========== =========== =========== ===========
[a] The periods ended December 31, 2005 include the dilutive effect of
restricted stock, stock options and Series B preferred stock. The
twelve-month period ended December 31, 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 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)
December 31, December 31,
2005 2004
----------- -----------
ASSETS
Current assets $1,430,906 $1,509,767
Current assets of discontinued
operations 13,141 5,128
Property, plant and
equipment, net 951,542 859,321
Other assets 84,983 106,965
Non-current assets of
discontinued operations - 15,220
----------- -----------
Total Assets $2,480,572 $2,496,401
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 597,367 $ 678,126
Current liabilities of
discontinued operations 34,129 34,705
Long-term debt and guarantees 581,469 601,344
Other long-term liabilities and
deferred credits 356,689 397,997
Long-term liabilities of
discontinued operations - 6,862
Shareholders' equity 910,918 777,367
----------- -----------
Total Liabilities and
Shareholders' Equity $2,480,572 $2,496,401
=========== ===========