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 RESULTS FOR 2010
SAN MATEO, Calif.-November 3, 2010-Con-way Inc. (NYSE:CNW) today reported a
net loss to common shareholders for the third quarter of 2010 of $8.2 million
(15 cents per share). The results compared to third-quarter 2009 net income
to common shareholders of $13.5 million (27 cents per diluted share).
On a non-GAAP basis, third-quarter earnings per diluted share were 22 cents
in 2010 compared to 38 cents in 2009, excluding the following items:
* 2010 -- a $16.4 million goodwill-impairment charge related to the 2007
acquisition of Chic Logistics, and $5.5 million of expense for recent
employee severances and the planned consolidation of Con-way's executive
offices;
* 2009 -- a change in the accounting estimate for revenue adjustments, which
reduced revenue and operating income at Con-way Freight by $5.4 million.
Both years also included discrete tax adjustments. Additional information is
provided in the attached reconciliation.
Revenue in the third quarter of 2010 was $1.27 billion, a 12.1 percent
increase from last year's third quarter. Operating income in the 2010 third
quarter was $12.5 million, compared to $41.1 million in the third quarter a
year ago.
The third-quarter tax provision in 2010 was $6.7 million and in 2009 was
$11.5 million. There was no tax benefit in 2010 from the non-deductible
goodwill impairment charge. Excluding the effect of goodwill impairment and
discrete items, the third-quarter effective tax rate was 42.6 percent in 2010
compared to 37.0 percent in 2009.
Douglas W. Stotlar, Con-way's president and CEO, noted that while corporate
office consolidation and severance costs reduced current-quarter profits, key
operating metrics for Con-way Freight improved as the quarter progressed.
"The lingering effects of the LTL tonnage surge from earlier this year left
our LTL business with higher variable costs as we entered the quarter,"
Stotlar noted. "In August, we implemented specific actions to improve
performance at Con-way Freight. As a result, we've seen variable costs
decline, pricing improve and tonnage levels moderate."
"We came out of the quarter with positive momentum," he added. "We have set a
deliberate course for improvement and we are making steady progress which we
expect will continue through the fourth quarter."
Menlo Worldwide Logistics posted its third consecutive quarterly improvement
over 2009, excluding impairment charges. "Menlo once again delivered solid
growth in revenues, net revenues and operating income. Our supply chain and
logistics company is executing well across all of its principal business
lines," Stotlar said.
Con-way Truckload's results were affected by external factors which raised
operating costs, and shipper demand that moderated toward the end of the
quarter. "Revenue per loaded mile improved as pricing remained relatively
stable. We expect results to improve as Con-way Truckload continues to focus
on higher-margin opportunities and increasing asset utilization," Stotlar
concluded.
Operating results in the 2010 third quarter for Con-way's reporting segments
were as follows:
FREIGHT
For the 2010 third quarter, Con-way Freight, the company's less-than-
truckload (LTL) operation, reported:
* Revenue of $797.1 million, a 13.1 percent increase over last year's
third-quarter revenue of $704.5 million.
* Yield increased 3.1 percent from the previous-year third quarter.
Excluding the fuel surcharge, yield increased 0.9 percent.
* Weight per day increased 8.7 percent over the previous-year third
quarter.
* Operating income of $13.1 million, compared to $22.8 million in the
year-ago period. Higher purchased transportation, temporary labor and
rental equipment expense in the first half of the quarter adversely
affected results. Severance and office consolidation costs and the
partial reinstatement of 2009's employee wage and benefit reductions
also added $4.4 million and approximately $19 million, respectively, to
operating expense. The 2009 third quarter included the $5.4 million
effect of the change in accounting estimate related to revenue
adjustments.
* Operating ratio of 98.4 in the 2010 third quarter compared to 96.8 in
the previous-year period.
LOGISTICS
For the third quarter of 2010, Menlo Worldwide Logistics, the company's
global logistics and supply chain management operation, reported:
* Revenue of $370.0 million, up 6.8 percent from the prior-year third-
quarter revenue of $346.4 million.
* Net revenue of $140.7 million, which increased 7.2 percent from $131.3
million in the same period of last year, due primarily to an increase in
revenue from warehouse management services.
* Operating loss of $6.3 million, compared to operating income of $9.5
million earned in the third quarter of 2009. Excluding the $16.4
million goodwill-impairment charge, third-quarter operating income in
2010 was $10.1 million, a 6.3 percent increase from $9.5 million in
2009, due largely to the growth in net revenue.
TRUCKLOAD
For the third quarter of 2010, Con-way Truckload, the company's full-
truckload transportation operation, reported:
* Revenue of $140.7 million, a 3.8 percent decline from the prior-year
third-quarter revenue of $146.3 million. Lower total miles and a higher
proportion of empty miles led to a decline in tractor productivity,
reflecting changes in fleet composition that had fewer higher-mileage
driver teams and proportionally more single drivers. Partially
offsetting the decline were higher fuel surcharges and improved revenue
per loaded mile (excluding fuel surcharges).
* Operating income of $5.5 million, compared to $10.6 million earned in
last year's third quarter, which included a $2.3 million loss from the
sale of tractors.
* Operating ratio on revenue, exclusive of fuel surcharges, was 95.3 in
the third quarter of 2010, compared to 91.7 in the third quarter of
2009.
Revenue and operating income also were adversely affected, to a lesser
extent, by Hurricane Alex, which in July flooded the Mexico border and
stranded portions of Con-way Truckload's trailer fleet.
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
essentially break-even results in the 2010 third quarter compared to a prior-
year third-quarter operating loss of $1.8 million, which relates primarily to
corporate reinsurance activities.
INVESTOR CONFERENCE CALL
Con-way will host a conference call for the investment community later today,
Wednesday, November 3, beginning at 4:00 p.m. Eastern Daylight Time (1:00
p.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 dialing
(800) 642-1687 or (706) 645-9291 (for international callers) and using access
code 16993950. An Internet replay of the presentation will also be available
at the Con-way website.
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
freight transportation, as well as logistics, warehousing, multimodal 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, 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 2009 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.
Consolidated Statements of Operating Results
(Dollars in thousands except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30,
-------------------- --------------------
2010 2009 2010 2009
-------- -------- -------- --------
REVENUE
Freight $ 797,078 704,459 $2,339,046 1,927,623
Logistics [a] 370,049 346,352 1,111,007 990,451
Truckload 140,655 146,251 426,725 424,332
Other 10,416 3,858 36,274 14,384
Inter-segment Revenue
Eliminations (48,015) (67,479) (174,695) (204,084)
----------- ---------- ---------- ----------
$1,270,183 1,133,441 3,738,357 3,152,706
___________ __________ __________ __________
OPERATING INCOME (LOSS)
Freight[b] [c] $ 13,062 22,816 27,135 48,423
Logistics [d] [e] (6,282) 9,532 19,582 22,305
Truckload [f] 5,475 10,620 13,582 (115,179)
Other 246 (1,834) 2,034 1,239
--------- --------- ---------- ----------
12,501 41,134 62,333 (43,212)
Other Expense, net 14,034 16,110 46,469 48,204
--------- -------- ---------- ----------
Income (Loss) before Income
Tax Provision (1,533) 25,024 15,864 (91,416)
Income Tax Provision
6,695 11,532 14,266 14,402
---------- -------- ---------- ----------
Net Income (Loss) (8,228) 13,492 1,598 (105,818)
---------- --------- ---------- ----------
Preferred Stock Dividends - - - 3,189
--------- --------- ---------- ----------
NET INCOME (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS $ (8,228) 13,492 1,598 (109,007)
__________ _________ __________ _________
Weighted-Average Common Shares Outstanding
Basic 54,286,677 48,862,692 51,780,610 47,009,642
Diluted 54,286,677 49,497,740 52,410,846 47,009,642
Income (Loss) Per Common Share
Basic
$ (0.15) $ 0.28 $ 0.03 $(2.32)
--------- -------- --------- --------
Diluted
$ (0.15) $ 0.27 $ 0.03 $(2.32)
****************************************************
[a] Logistics' net revenue
Revenue $ 370,049 346,352 1,111,007 990,451
Purchased transportation
expense (229,320) (215,048) (683,232) (606,544)
---------- --------- ---------- ---------
Net revenue $ 140,729 131,304 427,775 383,907
__________ _________ __________ _________
[b] Includes $4.4 million of current-year third-quarter expense at Con-way
Freight for executive severences and the planned consolidation of
Con-way's executive offices. In connection with these events,
$5.5 million of expenses were recognized by Con-way and allocated
across all reporting segments, with the Freight segment incurring the
predominant amount of the related expense.
[c] Includes a prior-year third-quarter change in accounting estimate,
which increased the allowance for revenue adjustments and decreased
both revenue and operating income by $5.4 million.
[d] Includes a $16.4 million current-year third-quarter goodwill-
impairment charge.
[e] Includes a $2.8 million current-year first-quarter charge for the
write-off of a customer-relationship intangible asset.
[f] Includes a $134.8 million prior-year first-quarter goodwill-
impairment charge.
***************************************
Con-way Inc.
Reconciliation of GAAP Financial Measure to Non-GAAP Financial Matters
(Dollars in thousands except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30,
-------------------- --------------------
2010 2009 2010 2009
-------- -------- -------- --------
Net Income (Loss) Applicable $ (8,228) 13,492 $ 1,598 (109,007)
to Common Shareholders
Before-Tax Reconciling Items
Goodwill impairment (16,414) - (16,414) (134,813)
Customer-relationship
intangible-asset impairment - - (2,767) -
Employee-separation costs (5,490) - (5,490) -
Change in accounting estimate - (5,359) - (5,359)
----------- ---------- ---------- ----------
$ (21,904) (5,359) (24,671) (140,172)
___________ __________ __________ __________
Tax-Related Reconciling Items
Tax effect of items above $ 2,141 2,090 2,833 2,090
Discrete tax adjustments (356) (2,265) 663 1,829
--------- --------- ---------- ---------
1,785 (175) 3,496 3,919
_________ _________ __________ _________
Adjusted Non-GAAP Financial Measures:
Net Income Available to --------- -------- ---------- ----------
Common Shareholders $ 11,891 19,026 22,773 27,246
_________ ________ __________ _________
Net Income Per Diluted
Common Share $ 0.22 0.38 0.43 0.57
_________ ________ __________ _________
_________ ________ __________ _________
Diluted Common
Shares Outstanding 54,800,059 49,497,740 52,410,846 47,476,691
Information About Non-GAAP Finacial Measures:
Con-way provides adjusted net income and earnings per share as additional
information to investors. These measures are not in accordance with
generally accepted accounting principles in the United States ("GAAP").
Con-way's non-GAAP financial measures are intended to supplement, but
not substitute for, the most directly comparable GAAP measures. Con-way
believes that the non-GAAP financial measures provide meaningful
information to assist investors and analysts in understanding Con-way's
financial results because they exclude items that may not be indicative
or are unrelated to Con-way's core operating results. However, because
non-GAAP financial measures are not standardized, it may not be
possible to compare these financial measures across companies. Investors
are strongly encouraged to review Con-way's financial statements and
publicly filed reports in their entirety and not rely on any
single financial measure.
***************************************
Con-way Inc.
Consolidated Condensed Balance Sheets
(Dollars in thousands)
Septmber 30, December 31,
2010 2009
ASSETS
Current assets $ 1,108,904 $ 1,076,894
Property, plant
and equipment, net 1,394,905 1,375,273
Other assets 419,428 444,050
------------- ----------------
Total Assets $ 2,923,237 $ 2,896,217
_____________ ________________
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 688,476 $ 791,484
Long-term debt
and capital leases 781,711 760,789
Other long-term
liabilities and
deferred credits 600,929 657,215
Shareholders'
equity 852,121 686,729
------------- ----------------
Total Liabilities and
Shareholders' Equity $ 2,923,237 $ 2,896,217
_____________ ________________