Exhibit 99
Con-way
NEWS RELEASE
Contacts:
Investor: Patrick Foessenier 1+650-378-5353
News Media: Gary Frantz 1+650-378-5335
CON-WAY INC. REPORTS FOURTH-QUARTER AND FULL-YEAR RESULTS FOR 2008
SAN MATEO, Calif. - January 26, 2009 -- Con-way Inc. (NYSE:CNW) today
reported a net loss from continuing operations (after preferred stock
dividends) for the fourth quarter of 2008 of $49.7 million, or $1.09 per
diluted share. The results compared with fourth-quarter 2007 net income from
continuing operations (after preferred stock dividends) of $36.9 million, or
78 cents per diluted share.
Both the 2008 and 2007 fourth-quarter results from continuing operations
included special charges. Without the charges, on a non-GAAP basis (See
Footnote a) Con-way net income from continuing operations was $4.5 million,
or 10 cents per share in the 2008 fourth quarter, compared to 2007 fourth-
quarter earnings of $41.8 million, or 88 cents per diluted share. Special
charges affecting both periods included the following:
2008
- -----
* $21.3 million (28 cents per share) for restructuring charges from network
re-engineering and workforce reduction at Con-way Freight.
* $37.8 million (80 cents per share) for an impairment charge related to
goodwill and other intangible assets at Menlo Worldwide Logistics' China-
based entity, Chic Holdings, Ltd.
* $4.9 million (11 cents per share) for the write-down of a receivable
related to the acquisition of Chic.
2007
- -----
* $7.7 million (10 cents per share) comprising a charge for business
transformation and management office consolidations at Con-way Freight.
The net loss to common shareholders in the 2008 fourth quarter was $43.0
million, or 94 cents per share. This compares to previous-year fourth-quarter
net income to common shareholders of $34.5 million, or 73 cents per diluted
share.
Net income to common shareholders for both the 2008 and 2007 fourth quarters
included the above mentioned special charges. Net income for both periods
also included the effect of discontinued operations, described below:
* 2008 fourth quarter: A net gain of $6.7 million (15 cents per share)
representing the cash proceeds received from resolution of an insurance
matter and a claims issue, less the amount of a payment made for
settlement of a legal matter.
* 2007 fourth quarter: A charge of $2.5 million (5 cents per share)
representing a loss from various other activities classified as
discontinued operations.
Revenue in the 2008 fourth quarter was $1.13 billion, a decrease of 6.2
percent from last year's fourth-quarter revenue of $1.20 billion. The
operating loss of $35.2 million in the 2008 fourth quarter compared to
operating income of $70.0 million in the fourth quarter a year ago.
The 2008 fourth-quarter income tax benefit rate of 3.3 percent primarily
reflects no tax deduction for the impairment charge and the write-down of the
acquisition-related receivable, as well as tax expense from other discrete
tax items. The effective tax rate for the same period of 2007 was 35.3
percent.
FULL YEAR 2008 RESULTS
For the full-year 2008, Con-way reported net income from continuing
operations (after preferred dividends) of $58.6 million, or $1.23 per diluted
share, compared with $146.8 million (after preferred dividends), or $3.06 per
diluted share in 2007. Both years included the effect of special charges.
Excluding special charges in both years, on a non-GAAP basis (See Footnote a)
full-year 2008 net income from continuing operations was $116.0 million, or
$2.41 per diluted share, compared to $155.2 million, or $3.23 per diluted
share earned in 2007.
Including the effect of discontinued operations and special charges, net
income to common shareholders for the full-year 2008 was $67.0 million, or
$1.40 per diluted share, compared to net income to common shareholders in
2007 of $146.0 million, or $3.04 per diluted share.
Revenues for full-year 2008 rose to $5.04 billion from 2007's revenues of
$4.39 billion, a 14.8 percent increase. Operating income in 2008 was $192.6
million compared with $264.5 million in 2007.
Commenting on the results, Con-way President and CEO Douglas W. Stotlar said,
"As we noted in our update last month, the deteriorating economy in the
fourth quarter foreshadowed an extraordinary decline in demand for freight
services. As this decline accelerated through November and December, our
freight business volumes fell at an unprecedented rate, with a corresponding
effect on earnings."
In response, Stotlar noted that the company has taken a number of steps to
reduce costs and conserve cash, including workforce reductions, aggressive
expense controls, lower capital expenditures and a freeze on pay levels for
management and administrative employees for 2009. "These were difficult
decisions, necessary to align our costs for the current environment, and to
help position us to weather what looks to be an extremely tough recessionary
economy."
Stotlar emphasized however that while Con-way is actively pursuing continuous
cost reduction and efficiency improvement measures throughout the enterprise,
the company is not compromising on service. "Even more so in challenging
economic times, customers want secure, financially stable service providers
who they can trust to provide consistent, reliable everyday performance," he
said.
"We have excellent franchises with reputations for superior service. Our
employees are putting in tremendous effort to take care of our customers,
delivering some of the highest productivity and service levels in our
history. All of our business units are operating from positions of strength
in their markets and remain focused on delivering the premium value for which
we are known."
For the full-year 2008, the effective tax rate was 51.5 percent compared to
36.6 percent in the prior year. The higher 2008 tax rate primarily reflects
the effect of the previously mentioned impairment charges in the fourth-
quarter.
Segment results in the 2008 fourth quarter for Con-way's principal operations
were as follows:
FREIGHT
For the 2008 fourth quarter, Con-way Freight, the company's regional less-
than-truckload operations, reported:
* An operating loss of $9.4 million compared to profit of $55.2 million in
the year-ago period. The 2008 fourth quarter included a pre-tax
restructuring charge of $21.3 million for network re-engineering and
workforce reduction costs. Without the restructuring charge, Con-way
Freight earned $11.9 million in the quarter. The 2007 fourth quarter
included a $7.7 million restructuring charge.
* Revenues of $640.3 million, a 13.4 percent decrease from last year's
fourth-quarter revenues of $739.2 million.
* Tonnage per day decreased 7.7 percent from the previous-year fourth
quarter.
* Yield, defined as revenue per hundredweight, declined 2.2 percent from
the previous-year fourth quarter. Excluding the fuel surcharge, yield
declined 1.4 percent.
* An operating ratio of 101.4 in the 2008 fourth quarter compared to 92.6
in fourth-quarter 2007. Excluding the restructuring charge mentioned
earlier, the 2008 fourth-quarter operating ratio was 98.2. The 2007
fourth quarter operating ratio included the $7.7 million restructuring
charge and rebranding expense of $3.0 million.
LOGISTICS
For the fourth quarter of 2008, Menlo Worldwide Logistics, the company's
global logistics and supply chain management operations, reported:
* An operating loss of $38.6 million compared to income of $5.9 million in
the fourth quarter of 2007. Menlo's 2008 fourth-quarter results included
the $37.8 million impairment charge for goodwill and other intangible
assets, and the $4.9 million write down of the receivable related to the
Chic acquisition. Without these special charges, Menlo's income for the
2008 fourth quarter was $4.2 million.
* Revenue of $373.1 million, up 9.7 percent from the previous-year fourth-
quarter revenue of $340.1 million.
* Net revenue of $129.3 million, an increase of 2.5 percent compared to
$126.1 million in the previous-year fourth quarter.
While Menlo recorded an increase in net revenue, operating income declined
due to the special charges and other costs incurred for remediation of
operating issues in China.
TRUCKLOAD
For the fourth quarter of 2008, Con-way Truckload, the company's full-
truckload transportation operations, reported:
* Operating income of $14.5 million, a 64.7 percent increase over the $8.8
million earned in the fourth quarter of 2007, which included $2.3
million of costs from integration of Con-way's pre-acquisition truckload
operations.
* Revenue of $110.9 million, after the elimination of $38.4 million of
inter-company revenues, a decrease of 6.3 percent from 2007 fourth-
quarter revenues of $118.4 million.
* Operating ratio on total revenues excluding fuel surcharges (before
elimination of inter-company revenues) of 88.1, compared to 92.7 in the
previous-year period. The operating ratio on total revenues, including
fuel surcharges, was 90.3 compared to 94.1 in the 2007 fourth quarter,
including the previously mentioned integration expense.
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 loss
during the 2008 fourth quarter, primarily due to activities from the
company's captive insurance program.
2009 OUTLOOK
Due to the uncertainty of the global economy and lack of visibility into
future business volumes and market trends, the company is suspending its
practice of providing annual earnings guidance.
INVESTOR CONFERENCE CALL
Con-way will hold a conference call for the investment community to discuss
its fourth-quarter and full-year 2008 financial results tomorrow, Tuesday,
January 27 at 10:00 a.m. Eastern Standard Time (7:00 a.m. Pacific.)
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 web
cast at www.con-way.com, in the Investor Relations section. Related financial
and operating statistics to be discussed on the conference call will also be
available on the company's web site 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 79978707. The replay will also be available at the same web-casting site
providing access to the live call.
About Con-way Inc. -- Con-way Inc. (NYSE:CNW) is a $5.0 billion freight
transportation and logistics services company headquartered in San Mateo,
Calif. Con-way delivers industry-leading services through its primary
operating companies of Con-way Freight, Con-way Truckload and Menlo
Worldwide. These operating units provide high-performance, day-definite less-
than-truckload (LTL) and full truckload and multimodal 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 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 of earnings, revenues, weight, yield, volumes, income or other
financial or operating items, all statements of the plans, strategies,
expectations or objectives of Con-way's management for future operations or
other future items, 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 legal and other
claims and proceedings that may be brought against Con-way, any
statements regarding future economic conditions or performance, any
statements regarding strategic acquisitions, 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, increasing competition
and pricing pressure, the creditworthiness of Con-way's customers and their
ability to pay for services rendered, 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
goodwill, in tangible assets and other long-lived assets, the possibility of
defaults under Con-way's $400 million credit agreement and other debt
instruments (including without limitation defaults resulting from unusual
charges), uncertainty in the credit markets, including the effect on Con-
way's ability to refinance indebtedness as and when it becomes due, labor
matters, enforcement of and changes in governmental regulations or
legislation which potentially could result in an adverse impact on the
company, environmental and tax matters, matters relating to the 1996 spin-off
of Consolidated Freightways Corporation ("CFC"), including, but not limited
to, the arbitration demand and federal lawsuit Con-way has filed against one
of CFC's multi-employer pension funds seeking a finding that Con-way is not
liable for any of CFC's unpaid withdrawal liabilities, the $29 million claim
asserted by that fund against Con-way and the possibility that other CFC
multi-employer pension funds may assert claims against Con-way in the future,
and matters relating to Con-way's defined benefit pension plans, including
the effect on the plans of changes in discount rates and in the value of plan
assets. 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 thousands except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
REVENUES
Freight $ 640,305 $ 739,162 $3,015,959 $2,904,543
Logistics [b] 373,117 340,094 1,511,611 1,297,056
Truckload [c] 110,937 118,446 505,201 172,674
Other 1,023 2,460 4,046 13,090
----------- ----------- ----------- -----------
$1,125,382 $1,200,162 $5,036,817 $4,387,363
=========== =========== =========== ===========
OPERATING INCOME (LOSS)
Freight $ (9,390) $ 55,201 $ 165,169 $ 235,060
Logistics (38,578) 5,940 (23,683) 25,599
Truckload [c] 14,488 8,797 52,395 8,803
Vector - - - (2,699)
Other (1,683) 92 (1,259) (2,310)
----------- ----------- ----------- -----------
(35,163) 70,030 192,622 264,453
Other Expense, net 14,458 10,222 57,705 21,807
----------- ----------- ----------- -----------
Income (Loss) before
Income Tax Provision
(Benefit) (49,621) 59,808 134,917 242,646
Income Tax Provision
(Benefit) (1,642) 21,084 69,494 88,871
----------- ----------- ----------- -----------
Income (Loss) from
Continuing Operations (47,979) 38,724 65,423 153,775
----------- ----------- ----------- -----------
Discontinued Operations,
net of tax
Gain (Loss) from
Disposal 6,717 (2,472) 8,326 (863)
----------- ----------- ----------- -----------
6,717 (2,472) 8,326 (863)
Net Income (Loss) (41,262) 36,252 73,749 152,912
Preferred Stock
Dividends 1,760 1,788 6,788 6,960
----------- ----------- ----------- -----------
NET INCOME (LOSS)
APPLICABLE TO COMMON
SHAREHOLDERS $ (43,022) $ 34,464 $ 66,961 $ 145,952
=========== =========== =========== ===========
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS
APPLICABLE TO COMMON
SHAREHOLDERS $ (49,739) $ 36,936 $ 58,635 $ 146,815
=========== =========== =========== ===========
Weighted-Average Common
Shares Outstanding
Basic 45,605,592 45,035,610 45,427,317 45,318,740
Diluted 45,605,592 47,956,613 48,619,292 48,327,784
Earnings (Loss) Per
Common Share
Basic
Net Income (Loss)
from Continuing
Operations $ (1.09) $ 0.82 $ 1.29 $ 3.24
Gain (Loss) from
Disposal 0.15 (0.05) 0.18 (0.02)
----------- ----------- ----------- -----------
$ (0.94) $ 0.77 $ 1.47 $ 3.22
=========== =========== =========== ===========
Diluted [a]
Net Income (Loss)
from Continuing
Operations $ (1.09) $ 0.78 $ 1.23 $ 3.06
Gain (Loss) from
Disposal 0.15 (0.05) 0.17 (0.02)
----------- ----------- ----------- -----------
$ (0.94) $ 0.73 $ 1.40 $ 3.04
=========== =========== =========== ===========
[a] Diluted earnings
per share excluding
special charges
Net income (loss)
from continuing
operations,
as reported $ (1.09) $ 0.78 $ 1.23 $ 3.06
Con-way Freight
business-
transformation
initiatives 0.28 0.10 0.33 0.17
Menlo Worldwide
Logistics
impairment charges 0.80 - 0.75 -
Menlo Worldwide
Logistics write-down
of an acquisition
-related receivable 0.11 - 0.10 -
----------- ----------- ----------- -----------
$ 0.10 $ 0.88 $ 2.41 $ 3.23
=========== =========== =========== ===========
Diluted earnings per share excluding special charges is a non-GAAP measure.
Con-way includes this measure because it believes that investors are
interested in the consolidated comparative results excluding significant
special charges. Non-GAAP measures should be viewed in addition to, and
not as an alternative for, Con-way's reported results. Con-way's updated
annual earnings guidance of $2.20 to $2.35 provided in December 2008
included $5.2 million ($0.07 per diluted share) of first-quarter expense
associated with restructuring charges and other business-transformation
initiatives at Con-way Freight.
[b] Menlo Logistics'
net revenues
Revenues $ 373,117 $ 340,094 $1,511,611 $1,297,056
Purchased
transportation
expense (243,852) (213,995) (1,001,775) (851,366)
----------- ----------- ----------- -----------
Net revenues $ 129,265 $ 126,099 $ 509,836 $ 445,690
[c] 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 income only for periods subsequent to the acquisition.
Con-way Inc.
Condensed Balance Sheets
(Dollars in thousands)
December 31, December 31,
2008 2007
---------------- ----------------
ASSETS
Current assets $ 920,692 $ 847,106
Property, plant and equipment, net 1,471,956 1,458,788
Other assets 648,669 703,414
---------------- ----------------
Total Assets $ 3,041,317 $ 3,009,308
================ ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 637,697 $ 673,120
Long-term debt and guarantees 926,224 955,722
Other long-term liabilities and
deferred credits [d] 851,804 471,370
Shareholders' equity [d] 625,592 909,096
---------------- ----------------
Total Liabilities and
Shareholders' Equity $ 3,041,317 $ 3,009,308
================ ================
[d] In December 2008, Con-way recorded a $363.2 million reduction in
shareholders' equity to recognize the underfunded status of defined
benefit pension plans. The adjustment to equity reflects a $595.4 million
increase in employee benefits liabilities, net of $232.2 million of
deferred tax benefits.