EXHIBIT 99
CON-WAY INC.
NEWS RELEASE
Contacts:
Investor: Patrick Fossenier 1+650-378-5353
News Media: Gary Frantz 1+650-378-5335
CON-WAY INC. REPORTS THIRD-QUARTER 2009 RESULTS
SAN MATEO, Calif.-Nov. 3, 2009-Con-way Inc. (NYSE:CNW) today reported net
income available to common shareholders for the third quarter of 2009 of
$13.5 million, or 27 cents per diluted share. The results compare to third-
quarter 2008 net income available to common shareholders of $38.8 million, or
81 cents per diluted share.
The 2009 third quarter included the effect of a change in accounting estimate
related to revenue adjustments at Con-way Freight and a charge for certain
discrete tax items, which reduced net income by 7 cents and 5 cents per
diluted share, respectively. Excluding these items, 2009 third-quarter
earnings per diluted share were 39 cents.
The 2008 third quarter results reflected the effect of preferred stock
dividends. The company subsequently converted its preferred stock to common
stock on June 30 this year.
Operating income in the 2009 third quarter was $41.1 million compared to
$78.9 million earned in the third quarter a year ago. Revenue in the 2009
third quarter was $1.13 billion, down from last year's third-quarter revenue
of $1.37 billion as the recessionary economy curtailed demand for services.
Commenting on the quarter, Con-way President and CEO Douglas W. Stotlar said,
"Our operating companies have adjusted to the resetting economy. Overall, the
business environment continues to present formidable challenges,
characterized by weak demand, excess capacity and pricing pressure. We expect
these conditions to persist in the near term, diminishing the prospects for
earnings growth."
Con-way Freight continued to post sequential quarter-to-quarter 2009 tonnage
growth while yield and profits declined due to several factors. "We made a
strategic decision, implemented over the past two quarters, to improve
network utilization and we met this objective," noted Stotlar. "Profits were
constrained due to pricing levels, higher variable operating costs associated
with the tonnage growth and lower fuel surcharge revenues. While pricing is
likely to remain under pressure, we believe the increased network volumes put
us in a better position competitively; we are now instituting specific
measures to improve operating efficiency."
Menlo Worldwide Logistics produced a second consecutive quarter of solid
operating results. "Menlo did a superb job managing its costs," Stotlar said.
"These results speak to the consistent, successful execution of its business
model, particularly in the 4PL segment and with its multi-client warehousing
operations. Menlo continues to enjoy a strong sales pipeline and an excellent
win rate on new projects, which has helped offset business declines from
existing clients."
Con-way Truckload performed well in the quarter, effectively managing near-
term market challenges while expanding its service portfolio. "Profits were
reduced by an asset disposition loss. Excluding this, Con-way Truckload
turned in a commendable operating profit in a soft market," Stotlar noted.
"Costs remain well-controlled, asset utilization is improving and our new
regional truckload operation is gaining traction. Con-way Truckload continues
to be recognized for its premium service value, which is an excellent
foundation for growth," he concluded.
The effective tax rate for the 2009 third quarter was 46.1 percent compared
to 36.5 percent in the same period of 2008. The 2009 tax rate was affected
by discrete tax items that increased the effective tax rate, while the 2008
tax rate also included discrete tax items, which reduced the effective tax
rate.
FREIGHT
For the 2009 third quarter, Con-way Freight, the company's less-than-
truckload operation, reported:
* Operating income of $22.8 million, a decrease of 62.7 percent from the
$61.1 million earned in the year-ago period. Profitability was
diminished from lower pricing driven by overcapacity in the LTL market,
and higher variable operating costs due to increased tonnage levels. The
2009 third quarter also was affected by a change in accounting estimate
related to revenue adjustments, which decreased income by $5.4 million.
The current-quarter comparison to prior year also was affected by
employee cost reductions implemented in April 2009.
* Revenue of $692.8 million, a 14.3 percent decline from last year's
third-quarter revenue of $808.3 million.
* Tonnage per day increased 5.1 percent over the previous-year third
quarter.
* Yield declined 19.4 percent from the previous-year third quarter,
primarily reflecting the weak pricing environment from industry
overcapacity. Excluding the fuel surcharge, yield declined 10.5 percent.
* Con-way Freight recorded an operating ratio of 96.8 in the 2009 third
quarter, including the earlier-mentioned charge for the accounting
estimate change.
LOGISTICS
For the third quarter of 2009, Menlo Worldwide Logistics, the company's
global logistics and supply chain management operations, reported:
* Operating income of $9.5 million, a 159 percent increase from $3.7
million earned in the third quarter of 2008. The results reflected
effective cost controls, ongoing improvements in operating efficiency,
and gain-share income.
* Revenue of $344.4 million, down 18.0 percent from the previous-year
third-quarter revenue of $419.9 million. The decrease reflects a decline
in fuel-surcharge revenue from previous levels, and significantly lower
costs for purchased transportation sourced by Menlo's transportation-
management group as the company continued to leverage pricing
opportunities with third-party trucking service providers.
* Net revenue of $129.3 million, a slight increase from $127.9 million in
the previous-year third quarter, reflecting higher gain-share revenues.
TRUCKLOAD
For the third quarter of 2009, Con-way Truckload, the company's full-
truckload transportation operation, reported:
* Operating income of $10.6 million, a decrease of 30.1 percent compared
to $15.2 million in the previous-year period. Results included a $2.3
million charge related to the disposition of 150 tractors that will be
replaced during the fourth quarter. Excluding the charge, operating
income in the 2009 third quarter was $13.0 million.
* Revenue of $95.7 million, after the elimination of $50.6 million in
inter-company revenues. This compares to 2008 third-quarter revenue of
$140.9 million (after elimination of $42.7 million in inter-company
revenues).
* Operating ratio before inter-company eliminations and exclusive of fuel
surcharges was 91.7, compared to 88.6 in the third quarter of 2008.
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 losses
of $1.8 million and $1.1 million, respectively, in the 2009 and 2008 third
quarters.
INVESTOR CONFERENCE CALL
Con-way will host a conference call for the investment community tomorrow,
Wednesday, November 4 at 8:30 a.m. Eastern Standard Time (5:30 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 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 32526465. An Internet replay of the presentation will also be available
at the Con-way site.
About Con-way -- Con-way Inc. (NYSE:CNW) is a $4.3 billion freight
transportation and logistics services company headquartered in San Mateo,
Calif. A diversified transportation company, 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 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 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 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, 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"), 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 2008 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 Nine Months Ended
September 30, September 30,
--------------------- ----------------------
2009 2008 2009 2008
-------- -------- --------- ---------
REVENUES
Freight $ 692,750 [b] 808,326 1,890,434 [b] 2,375,654
Logistics [a] 344,361 419,896 987,793 1,138,494
Truckload 95,681 140,932 271,490 394,264
Other 649 1,015 2,989 3,023
---------- -------- ---------- ---------
$1,133,441 1,370,169 3,152,706 3,911,435
__________ ________ __________ _________
OPERATING INCOME (LOSS)
Freight $ 22,816 [b] 61,107 48,423 [b] 174,559 [d]
Logistics 9,532 3,678 22,305 14,895
Truckload 10,620 15,195 (115,179)[c] 37,907
Other (1,834) (1,063) 1,239 424
--------- -------- ---------- ---------
41,134 78,917 (43,212) 227,785
Other Expense, net 16,110 15,169 48,204 43,247
--------- -------- ---------- ---------
Income (Loss) before
Income Tax Provision 25,024 63,748 (91,416) 184,538
11,532 23,264 14,402 71,136
--------- -------- ---------- ---------
Income (Loss) from
Continuing Operations 13,492 40,484 (105,818) 113,402
--------- -------- ---------- ---------
Discontinued Operations, net of tax
Gain from Disposal - - - 1,609
--------- -------- ---------- ---------
- - - 1,609
Net Income (Loss) 13,492 40,484 (105,818) 115,011
Preferred Stock
Dividends - 1,655 3,189 5,028
--------- -------- ---------- ---------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHAREHOLDERS $ 13,492 38,829 (109,007) 109,983
__________ ________ __________ _________
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS APPLICABLE TO
COMMON SHAREHOLDERS $ 13,492 38,829 (109,007) 108,374
__________ ________ __________ _________
Weighted-Average Common Shares Outstanding
Basic 48,862,692 45,499,208 47,009,642 45,367,459
Diluted 49,497,740 48,336,200 47,009,642 48,256,429
Earnings (Loss) Per Common Share
Basic
Net Income (Loss)
from Continuing
Operations $ 0.28 $ 0.85 $ (2.32) $ 2.39
Gain from Disposal - - - 0.03
--------- -------- ---------- --------
$ 0.28 $ 0.85 $ (2.32) $ 2.42
__________ ________ __________ ________
Diluted
Net Income (Loss)
from Continuing
Operations $ 0.27 $ 0.81 $ (2.32) $ 2.26
Gain from Disposal - - - 0.04
--------- -------- ---------- --------
$ 0.27 $ 0.81 $ (2.32) $ 2.30
__________ ________ __________ ________
****************************************************
[a] Logistics' net revenues
Revenues $ 344,361 419,896 987,793 1,138,494
Purchased Transportation
Expense (215,048) (291,964) (606,544) (757,923)
---------- -------- ---------- ---------
Net revenues $ 129,313 127,932 381,249 380,571
__________ ________ __________ _________
[b] The three and nine months ended September 30, 2009 include a change in
accounting estimate at the Freight segment, which increased the allowance
for revenue adjustments and decreased both revenue and operating income
by $5.4 million ($0.07 per diluted share).
[c] The nine months ended September 30, 2009 included a goodwill impairment
charge of $134.8 million ($2.86 per share) in the first quarter of 2009.
[d] The nine months ended September 30, 2008 included $5.2 million
($0.07 per diluted share) of first-quarter expense associated
with restructuring activities at Freight.
Con-way Inc.
Condensed Balance Sheets
(Dollars in thousands)
ASSETS September 30, 2009 December 31, 2008
Current assets $ 1,097,468 $ 951,082
Property, plant
and equipment, net 1,365,572 1,471,956
Other assets 447,451 648,669
------------- ----------------
Total Assets $ 2,910,491 $ 3,071,707
_____________ ________________
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 829,717 $ 658,077
Long-term debt
and guarantees 718,047 926,224
Other long-term
liabilities and
deferred credits [a] 628,359 861,814
Shareholders'
equity [a] 734,341 625,592
------------- ----------------
Total Liabilities and
Shareholders' Equity $ 2,910,491 $ 3,071,707
_____________ ________________
[a] Effective April 30, 2009, Con-way amended its primary defined benefit
pension plan to permanently curtail benefits associated with future
increases in employee compensation. In connection with the curtailment,
Con-way re-measured its plan-related assets and liabilities as of April
30, 2009. Accordingly, as of the re-measurement date, Con-way recorded
a $299.9 million decrease to the plan obligation, a $116.9 million
decrease in long-term deferred tax assets, and a $182.9 million net
increase to shareholders' equity (to reflect a reduction in the
accumulated other comprehensive loss).