EXIBIT 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 2008 RESULTS
SAN MATEO, Calif.-April 16, 2008-Con-way Inc. (NYSE:CNW) today reported net
income from continuing operations for the first quarter of 2008 of $22.5
million (after preferred stock dividends), or 47 cents per diluted share. The
results compared to first-quarter 2007 net income from continuing operations
(after preferred stock dividends) of $24.9 million, or 51 cents per diluted
share.
Revenue was $1.20 billion, an increase of 19.9 percent from last year's
revenue of $1.00 billion, reflecting acquisitions completed during 2007.
Operating income in the 2008 first quarter was $54.0 million, an increase of
10.0 percent compared to $49.1 million earned in the first quarter a year
ago.
Net income to common shareholders in the 2008 first quarter was $22.5
million, or 47 cents per diluted share, which included expenses of $5.2
million, or 7 cents per diluted share, associated with completion of
organizational transformation initiatives at Con-way Freight. This compares
to previous-year net income of $27.8 million, or 57 cents per diluted share.
The 2007 first quarter included discontinued operations which had a net gain
of $2.9 million, or 6 cents per diluted share.
First quarter results in both 2008 and 2007 also were affected by worse-than-
expected winter weather conditions. These weather-related effects reduced
first-quarter diluted earnings per share in both years by an estimated 4
cents.
Excluding the Con-way Freight organizational transformation costs in 2008,
the company's first-quarter diluted earnings per share were 54 cents in 2008,
compared to 51 cents in 2007.
Describing the business climate as "lackluster at best," Douglas W. Stotlar,
Con-way's president and CEO, said, "We're operating in a challenging and
uncertain economic environment, which continues to restrain demand and place
pressure on pricing and margins. Based on current economic data and feedback
from our customers, there appear to be few catalysts to accelerate demand in
the freight markets, at least in the short term," he said.
"The current economy notwithstanding, I was encouraged by modest growth at
Con-way Freight in the quarter as targeted, customer-specific sales
initiatives produced results and increased market share," Stotlar added. "We
also began to see some early results from our synergy initiatives as Con-way
Truckload was able to leverage business opportunities with Menlo and Con-way
Freight to improve asset utilization and reduce empty miles."
Commenting on Menlo Worldwide Logistics, Stotlar noted that trends toward
outsourcing of logistics operations, both geographically and functionally
across the supply chain, continued to benefit Menlo. "Menlo has a solid
pipeline across all of its principal industry groups," said Stotlar. "Our
pace of new business wins is tracking with expectations, particularly in
Europe and Asia. The challenge for Menlo will be margin improvement and cost
management as new business wins are implemented."
The effective tax rate for the 2008 first quarter was 39.4 percent compared
to 41.8 percent in the same period of 2007. Both the 2008 and 2007 tax rates
were affected by discrete tax adjustments which increased the effective tax
rate.
FREIGHT
For the 2008 first quarter, Con-way Freight, the company's regional less-
than-truckload operations, reported:
* Operating income of $36.1 million, a decrease of 24.3 percent from the
$47.7 million earned in the year-ago period. The decrease reflected the
effect of unprecedented fuel costs, the influence of pricing pressures
on cost recovery, and higher operating expense. The 2008 first-quarter
income also was lower in part due to $5.2 million in expenses for
completion of Con-way Freight's business transformation.
* Revenues of $743.3 million, a 9.4 percent increase over last year's
first-quarter revenues of $679.7 million.
* Tonnage per day handled by Con-way Freight increased 3.1 percent over
the previous-year first quarter.
* Yield for Con-way Freight improved 7.8 percent from the previous-year
first quarter. Excluding the fuel surcharge, yield improved 2.1 percent.
* Con-way Freight recorded an operating ratio of 95.2 in the 2008 first
quarter compared to 93.2 in first-quarter 2007, reflecting the earlier-
mentioned extraordinary fuel escalation, pricing pressures and higher
operating costs. Excluding the previously noted business transformation
costs, the 2008 first-quarter operating ratio was 94.4.
The 2008 first quarter had rebranding expense of $3.7 million compared to
$2.8 million in 2007. The company expects Con-way Freight's rebranding and
the associated expense to be completed in the second quarter.
On January 28, 2008, Con-way Freight implemented a general rate increase of
5.5 percent.
LOGISTICS
For the first quarter of 2008, Menlo Worldwide Logistics, the company's
global logistics and supply chain management operations, reported:
* Operating income of $6.3 million, a 4.2 percent decrease from $6.5
million in the first quarter of 2007. Income decreased due to
integration and weather-related costs from Asian operations, and
business closings for the Chinese New Year, which reduced
volumes from China operations.
* Revenue of $341.5 million, up 6.5 percent from the previous-year first-
quarter revenue of $320.5 million.
* Net revenue of $126.0 million, an increase of 21.0 percent compared to
$104.1 million in the previous-year first quarter, reflecting revenues
gained from Menlo's acquisitions in Asia, which were completed last
year. While Menlo achieved growth in net revenues, operating income
declined due to the previously noted integration and weather-related
costs from Asian operations, and the effects of the Chinese New Year
holiday.
At the end of the first quarter of 2008, Menlo successfully launched the
operating and management platform for the Defense Transportation Coordination
Initiative (DTCI), bringing on-line the program's first Defense Distribution
Center (DDC) in Puget Sound, Washington. With implementation under way, the
company expects to begin recognizing revenue from DTCI in the 2008 second
quarter. Additional DDCs will go live in a phased roll-out throughout 2008
and into 2009. DTCI operations had an immaterial effect on first quarter
results.
In the 2007 first quarter, the company recorded a charge of $2.7 million for
the post-closing settlement of outstanding items related to the sale of
Menlo's interest in Vector SCM, LLC to General Motors Corp.
TRUCKLOAD
Results for the Truckload segment reflect the combined operations of Con-
way's former truckload division and Contract Freighters Inc., which Con-way
acquired in August 2007, and renamed Con-way Truckload in January 2008. For
the first quarter of 2008, the company's full-truckload transportation
operations reported:
* Operating income of $10.3 million.
* Revenue of $116.0 million, after the elimination of inter-company
revenues.
* Operating ratio on total revenues (before inter-company eliminations and
exclusive of fuel surcharges) of 91.4.
CON-WAY OTHER
Con-way Other includes the company's Road Systems, Inc. trailer manufacturing
unit as well as other corporate activities. These activities produced a
profit of $1.4 million during the 2008 first quarter, compared to a loss of
$1.7 million in the year-ago period.
2008 OUTLOOK
Con-way is revising its outlook for 2008 full-year earnings and now expects
diluted earnings per share from continuing operations to be between $3.00 and
$3.40 based on an assumed number of diluted shares outstanding of 48.1
million. The company's previous 2008 annual guidance was for diluted
earnings per share from continuing operations to be between $3.40 and $3.80.
"Given the weak demand environment and the inflationary effect of
unprecedented energy costs, we believe pricing will remain under pressure for
some time. Until such time as we have tangible evidence of improving
economic conditions we believe a cautious, measured approach to the outlook
for earnings is warranted," concluded Stotlar.
Con-way's effective tax rate is expected to be 38.4 percent for the year.
INVESTOR CONFERENCE CALL
Con-way will host a conference call for the investment community tomorrow,
Thursday, 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 a live internet webcast
at www.con-way.com, in the investor relations section.
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 39223414. An Internet replay of the presentation will also be available
at the Con-way web site.
Con-way Inc. (NYSE:CNW) is a $4.7 billion freight transportation and
logistics services company headquartered in San Mateo, Calif. Named FORTUNE
magazine's "Most Admired Company" in transportation and logistics for 2008,
Con-way delivers industry-leading services through three primary operating
companies: Con-way Freight, Con-way Truckload and Menlo Worldwide Logistics.
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, any statements regarding the acquisition of
Transportation Resources, Inc. and its subsidiaries, including Contract
Freighters, Inc. (collectively, "CFI"), and related financing, 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 and the effect of
ongoing litigation alleging that Con-way engaged in price fixing of fuel
surcharges in violation of Federal antitrust laws, 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 acquisition of CFI and related
financing(including integration risks and risks that acquisition synergies
are not realized), the possibility of defaults under Con-way's $400 million
credit agreement and other debt instruments (including without limitation
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 2007 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 thousand except per share amounts)
Three Months Ended
March 31,
---------------------
2008 2007
-------- --------
[c]
REVENUES
Freight $ 743,320 679,690
Logistics [a] 341,460 320,481
Truckload [b] 115,969 948
Other 832 1,072
---------- ---------
$1,201,581 1,002,191
__________ _________
OPERATING INCOME (LOSS)
Freight $ 36,077 47,678
Logistics 6,263 6,536
Truckload [b] 10,276 (663)
Vector - (2,699)
Other 1,392 (1,732)
--------- --------
54,008 49,120
Other Expense, net 14,209 3,328
--------- --------
Income before Taxes 39,799 45,792
Income Tax Provision 15,687 19,156
--------- --------
Income from
Continuing Operations 24,112 26,636
--------- --------
Discontinued Operations,
net of tax Gain from
Disposal - 2,919
--------- --------
- 2,919
Net Income 24,112 29,555
Preferred Stock Dividends 1,656 1,714
--------- --------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $ 22,456 27,841
__________ ________
NET INCOME FROM CONTINUING
OPERATIONS AVAILABLE
TO COMMON SHAREHOLDERS $ 22,456 24,922
__________ ________
Weighted-Average Common Shares Outstanding
Basic 45,230,686 45,990,881
Diluted 48,146,091 49,145,454
Earnings Per Common Share
Basic
Net Income from
Continuing Operations $ 0.50 $ 0.54
Gain from Disposal - 0.07
--------- --------
$ 0.50 $ 0.61
__________ ________
Diluted
Net Income from
Continuing Operations $ 0.47 $ 0.51
Gain from Disposal - 0.06
--------- --------
$ 0.47 $ 0.57
_________ ________
****************************************************
[a]Menlo Logistics' net revenues
Revenues $341,460 $320,481
Purchased transportation (215,452) (216,358)
_______________________
Net revenues $126,008 $104,123
[b]Effective August 23, 2007, Con-way acquired Contract Freighters, Inc. and
affiliated companies (collectively, "CFI"). Under purchase-method
accounting, CFI's operating results are included in Con-way's statements
of operating results only for periods subsequent to the acquision.
[c]During the fourth quarter of 2007, Con-way identified adjustments related
to the first quarter of 2007. Con-way has determined that those
adjustments were not material to either the first or fourth quarter.
However, for a more accurate presentation, Con-way has elected to revise
the first quarter of 2007 by decreasing net income from continuing
operations by $4.1 million ($0.09 per diluted share).
Results of Con-way Truckload and RSI were previously reported in the
Freight segment. In connection with the acquisition of CFI, a new
Truckload segment was created. Accordingly, the operating results of
Con-way Truckload are reported in the Truckload segment and the results
of RSI are reported in the Other segment and prior periods have been
reclassified to conform to the current presentation.
Con-way Inc.
Condensed Balance Sheets
(Dollars in thousands)
ASSETS March 31, 2008 December 31, 2007
Current assets $ 875,818 $ 855,478
Property, plant
and equipment, net 1,460,073 1,458,788
Other assets 727,940 703,414
------------- ----------------
Total Assets $ 3,063,831 $ 3,017,680
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 723,003 $ 681,492
Long-term debt
and guarantees 931,627 955,722
Other long-term
liabilities and
deferred credits 469,102 471,370
Shareholders'
equity 940,099 909,096
------------- ----------------
Total Liabilities and
Shareholders' Equity $ 3,063,831 $ 3,017,680