EXHIBIT 99
NEWS RELEASE
Contacts:
Investor: Patrick Fossenier 1+ 650-378-5353
News Media: Gary Frantz 1+ 650-378-5335
CON-WAY INC. REPORTS FIRST QUARTER 2007 RESULTS
SAN MATEO, Calif.-April 16, 2007-Con-way Inc. (NYSE:CNW) today reported net
income from continuing operations for the first quarter of 2007 of $29.0
million (after preferred stock dividends), or 60 cents per diluted share. The
results compared to first quarter 2006 net income from continuing operations
of $46.2 million, or 84 cents per diluted share.
Operating income in the 2007 first quarter was $55.7 million, down 28.5
percent compared to $77.9 million earned in the first quarter a year ago.
Revenue was $1.00 billion, a decrease of 4.2 percent from last year's revenue
of $1.05 billion.
Net income to common shareholders in the 2007 first quarter was $31.9
million, or 65 cents per diluted share. This compares to previous year net
income of $44.7 million, or 81 cents per diluted share. First quarter
results in 2007 and 2006 included discontinued operations, which were a net
gain of 5 cents per diluted share and a net loss of 3 cents per diluted
share, respectively.
The 2006 first quarter results from continuing operations also included $4.2
million in earnings from Vector SCM, which subsequently was sold later in the
year. In continuing operations for the 2007 first quarter, the company
recorded a charge of $2.7 million for the post-closing settlement of
outstanding items related to the Vector sale.
"We're executing on our plan," said Douglas W. Stotlar, president and CEO.
"The targeted sales initiatives we put in place last year are producing
tangible results for Con-way Freight. While operating results were down year
over year, we saw business increase each month in the quarter, with March
showing growth over the same period last year. I'm encouraged by the
resourcefulness of our people in maintaining productivity and service
excellence as we reinvigorate our growth."
Commenting on Menlo Worldwide, Stotlar said, "Our global logistics company
continues to gain momentum. We've had a surge in project awards and expect to
see the revenue effect as these come online during the year. Menlo is doing
a superb job managing its margins," Stotlar added. "Globally, logistics
outsourcing is increasing. Menlo is well positioned around the world to
capitalize on this trend with its industry vertical approach, multi-client
facilities and cost-effective, scalable solutions."
The effective tax rate for the 2007 first quarter was 41.3 percent compared
to 37.8 percent in the same period of 2006. The 2007 tax rate was affected by
the settlement in the quarter of the outstanding items from the Vector sale,
which did not receive tax benefits, and various other discrete tax items.
In its current stock repurchase program, the company acquired $45.1 million
in common shares during the 2007 first quarter, amounting to 910,600 shares.
The current $400 million stock repurchase program expires June 30, 2007 and
has $45.3 million in authorization remaining.
CON-WAY FREIGHT AND TRANSPORTATION
For the first quarter of 2007, Con-way Freight, the company's regional less-
than-truckload (LTL) operation, and Con-way Transportation, which consists of
the company's full-truckload and trailer manufacturing divisions, reported
the following results:
* Operating income of $53.9 million, a decrease of 19.4 percent versus
$66.8 million earned in the year-ago period.
* Revenues of $681.7 million, down 2.1 percent compared to the prior-year
revenues of $696.1 million.
* Tonnage per day handled by Con-way Freight decreased 2.3 percent versus
the previous-year quarter.
* Yield for Con-way Freight was up 1.2 percent from the previous-year
quarter, both with and without fuel surcharge.
* Con-way Freight's operating ratio was 92.3 in the 2007 first quarter
compared to 90.5 in first-quarter 2006. The 2007 first quarter was
affected by rebranding expense, health care and vehicular insurance
costs, and severe winter weather.
On March 19, 2007, Con-way Freight implemented a general rate increase of 4.9
percent.
MENLO LOGISTICS
For the first quarter of 2007, Menlo Logistics reported:
* Operating income of $6.5 million, a 5.7 percent increase from $6.2
million in the first quarter of 2006.
* Revenue of $320.5 million, down 8.4 percent from the previous-year
quarterly revenue of $349.9 million.
* Net revenue of $104.1 million, a 10.3 percent increase compared to
$94.4 million in the 2006 first quarter.
Throughout 2006, Menlo Worldwide consisted of Menlo Logistics and Vector SCM,
the company's logistics joint venture with General Motors (GM). The company
sold its membership interest in Vector, which was an equity-method
investment, to GM at the end of 2006. Menlo Worldwide's results last year
included $4.2 million in earnings from Vector. The 2007 first quarter
results for Menlo Worldwide included a $2.7 million charge for the post-
closing settlement of outstanding items from the Vector sale.
The Con-way Other segment, which contains various corporate activities,
included a $1.8 million loss in the quarter resulting from higher claims from
a reinsurance pool in which the company participates.
2007 OUTLOOK
Beginning in 2007, Con-way has adopted a policy of providing earnings
guidance for the full year only. Yearly guidance will be reviewed as
appropriate. For 2007, the company continues to expect diluted earnings per
share from continuing operations to be between $3.60 and $3.90, based on an
assumed number of diluted shares outstanding of 48 million. Con-way's
effective tax rate is expected to be 38 percent for the year.
INVESTOR CONFERENCE CALL
Con-way will host a conference call for the investment community tomorrow,
Tuesday, April 17 at 11:00 a.m., Eastern Daylight Time (8:00 a.m.
Pacific). On the call management will review results of the quarter ending on
March 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 at
http://www.con-way.com/investor_relations/webcasts.html
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 2952513. The replay will also be available at the same web casting site
providing access to the live call.
Con-way Inc. (NYSE:CNW) is a $4.2 billion freight transportation and
logistics services company headquartered in San Mateo, Calif. Named FORTUNE
magazine's "Most Admired Company" in transportation and logistics for 2007,
Con-way delivers industry-leading services through three primary operating
companies: Con-way Freight, Con-way Truckload Services and Menlo Worldwide.
These operating units provide high-performance, day-definite less-than-
truckload and full truckload and intermodal freight transportation, as well
as logistics, warehousing and supply chain management services, and trailer
manufacturing. Con-way Inc. and its subsidiaries operate from more than 500
locations across North America and in 20 countries. For more information
about Con-way, visit us on the Web at www.con-way.com.
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 Con-way'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 Con-way, 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 Con-way'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 Con-way may,
from time to time, be required to record impairment charges for long-lived
assets, the possibility of defaults under Con-way's $400 million credit
agreement and other debt instruments (including defaults resulting from
unusual charges), and the possibility that Con-way 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 the 1996 spin-off of Consolidated Freightways Corporation
(CFC), including the possibility that CFC's multi-employer pension plans may
assert claims against Con-way, matters relating to the sale of Menlo
Worldwide Forwarding, Inc., including Con-way's obligation to indemnify the
buyer for certain losses in connection with the sale, and matters relating to
Con-way's defined benefit pension plans. The factors included herein and in
Item 7 of Con-way's 2006 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.
Con-way Inc.
Statements of Operating Results
(Dollars in thousands except per share amounts)
Three Months Ended
March 31,
---------------------------
2007 2006
------------- -------------
REVENUES
Con-way Freight and Transportation $681,710 $696,130
Menlo Worldwide Logistics [a] 320,481 349,862
------------- -------------
$1,002,191 $1,045,992
============= =============
OPERATING INCOME (LOSS)
Con-way Freight and Transportation $53,875 $66,803
Menlo Worldwide Logistics 6,536 6,185
Vector (2,699) 5,272
Con-way Other (2,039) 726
------------- -------------
55,673 78,986
Reconciliation of segments to consolidated amount:
Income tax related to Vector, an equity-method
investment - (1,078)
------------- -------------
55,673 77,908
Other Expense, net 3,328 724
------------- -------------
Income before Taxes 52,345 77,184
Income Tax Provision 21,626 29,191
------------- -------------
Income from Continuing Operations 30,719 47,993
------------- -------------
Discontinued Operations, net of tax
Loss from Discontinued Operations - (753)
Gain (Loss) from Disposal 2,919 (806)
------------- -------------
2,919 (1,559)
Net Income 33,638 46,434
Preferred Stock Dividends 1,714 1,763
------------- -------------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $31,924 $44,671
============= =============
NET INCOME FROM CONTINUING OPERATIONS
AVAILABLE TO COMMON SHAREHOLDERS $29,005 $46,230
============= =============
Weighted-Average Common Shares Outstanding
Basic 45,990,811 51,921,645
Diluted 49,145,454 55,381,912
Earnings (Loss) Per Common Share
Basic
Net Income from Continuing Operations $0.63 $0.89
Loss from Discontinued Operations - (0.01)
Gain (Loss) from Disposal 0.06 (0.02)
------------- -------------
$0.69 $0.86
============= =============
Diluted
Net Income from Continuing Operations $0.60 $0.84
Loss from Discontinued Operations - (0.01)
Gain (Loss) from Disposal 0.05 (0.02)
------------- -------------
$0.65 $0.81
============= =============
[a] Menlo Worldwide Logistics net revenue
(revenue less purchased transportation
of $216,358 in 2007 and $255,465 in 2006) $104,123 $94,397
============= =============
Con-way Inc.
Condensed Balance Sheets
(Dollars in thousands)
March 31, December 31,
2007 2006
------------- -------------
ASSETS
Current assets
$1,135,782 $1,090,484
Property, plant and equipment, net 1,099,116 1,117,975
Other assets 88,731 93,430
------------- -------------
Total Assets $2,323,629 $2,301,889
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $620,331 $559,802
Long-term debt and guarantees 533,697 557,723
Other long-term liabilities and deferred credits 422,301 443,585
Shareholders' equity [a] 747,300 740,779
------------- -------------
Total Liabilities and Shareholders' Equity $2,323,629 $2,301,889
============= =============
[a] Effective January 1, 2007, Con-way adopted the measurement-date
provisions of SFAS 158, "Employers' Accounting for Defined Benefit
Pension Plans - an amendment of SFAS 87, 88, 106 and 132R." In
connection with the revision of its measurement date to December 31
from November 30, Con-way recorded a $13.0 million net increase to
shareholders' equity, consisting of a $15.6 million reduction in the
accumulated other comprehensive loss and a $2.6 million decrease to
beginning retained earnings.