Published: August 04, 2011
Con-way Inc. Reports 2011 Second-Quarter Results
ANN ARBOR, Mich., Aug. 4, 2011 /PRNewswire/ -- Con-way Inc. (NYSE: CNW) today reported net income for the second quarter of 2011 of $29.4 million, or 52 cents per diluted share. The results compare to second-quarter 2010 net income of $13.9 million, or 26 cents per diluted share.
(Logo: http://photos.prnewswire.com/prnh/20060418/SFTU007LOGO)
Operating income in the 2011 second quarter was $60.2 million, a 69.8 percent increase over the $35.4 million earned in the second quarter a year ago. Revenue for the 2011 second quarter was $1.35 billion, a 3.2 percent increase from last year's second quarter revenue of $1.31 billion.
Douglas W. Stotlar, Con-way's president and CEO, noted that the favorable momentum gained over the past several quarters was sustained by the company's 2011 second quarter results.
Con-way Freight, the company's less-than-truckload (LTL) operation, turned in another consistent quarter of improvement. "The employees of our LTL business are doing an excellent job executing our strategy," said Stotlar. "Margin expansion continued, driven primarily by pricing improvements and ongoing operating efficiencies. We will maintain our focus on pricing discipline and initiatives to improve margins."
Menlo Worldwide Logistics, which operates the company's global logistics and supply chain management services, delivered a solid performance, nearly matching last year's record second quarter operating income. "Menlo is on track for a good year and continues to execute well," Stotlar noted. "We were encouraged by new business growth, as well as strength in both our international markets and in Menlo's North America sales pipeline."
Con-way Truckload, the company's full-truckload transportation operation, recorded increases in revenue, profits and operating efficiencies compared to last year's second quarter. "Strong operating discipline and improved pricing led to a good quarter for our full truckload company," said Stotlar. "Con-way Truckload continues to focus on improving operations and responding consistently to customer needs with value-added premium service."
The effective tax rate in the 2011 second quarter was 35.3 percent, compared to 31.7 percent in the same quarter of last year. Both periods included discrete tax adjustments that reduced the effective tax rate.
Segment results in the 2011 second quarter for Con-way's principal operations were as follows:
FREIGHT
For the second quarter of 2011, Con-way Freight reported:
-- Revenue of $839.8 million, a 2.8 percent increase over last year's
second-quarter revenue of $817.0 million. Improved yield, including
higher fuel surcharge revenue, contributed to revenue growth.
-- Operating income of $39.2 million, a 127.3 percent increase over the
$17.2 million earned in the year-ago period. The quarter benefited from
effective cost controls and improved revenue.
-- Revenue per hundredweight, or yield, increased 11.2 percent from the
previous-year second quarter. Excluding the fuel surcharge, yield rose
6.0 percent.
-- Tonnage per day declined 8.3 percent compared to the 2010 second
quarter, reflecting strategic efforts in the second and third quarters
last year to moderate tonnage to improve network efficiency.
-- Operating ratio was 95.3 in the 2011 second quarter compared to 97.9 in
the previous-year period.
LOGISTICS
For the second quarter of 2011, Menlo Worldwide Logistics reported:
-- Revenue of $394.0 million, an increase of 2.1 percent from the prior
year second-quarter revenue of $385.8 million, the result of increased
revenue from both transportation-management and warehouse-management
services.
-- Net revenue of $147.0 million, a 2.9 percent increase from $142.8
million in the previous year second quarter.
-- Operating income of $12.1 million, a 7.0 percent decline from last
year's second-quarter operating income of $13.0 million. Lower operating
income in the 2011 period was affected by lower margins on
warehouse-management services, due in part to start-up costs associated
with new customer contracts.
TRUCKLOAD
For the second quarter of 2011, Con-way Truckload reported:
-- Revenue of $155.5 million, a 6.9 percent increase over last year's
second-quarter revenue of $145.5 million, reflecting the positive
effects of higher fuel surcharges and improved revenue per loaded mile
(excluding fuel surcharges).
-- Operating income of $10.3 million, a 101.1 percent increase over
operating income of $5.1 million in the previous-year period. The
increase in second-quarter operating income resulted largely from
improved pricing, operating efficiencies and a decline in vehicular
self-insurance expense.
-- Revenue per loaded mile (excluding fuel surcharges) increased 4.2
percent from the previous-year second quarter.
-- Empty miles were 9.4 percent of total miles compared to 11.0 percent in
the previous-year second quarter.
-- Operating ratio exclusive of fuel surcharges was 91.3, compared to 95.7
in the second quarter of 2010.
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 an operating loss of $1.4 million in the second quarter of 2011 compared to break-even results in the second quarter of 2010.
INVESTOR CONFERENCE CALL
Con-way will host a conference call for the investment community tomorrow, Friday, August 5, beginning at 10:00 a.m. Eastern Daylight 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. 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 76324574. An Internet replay of the presentation will also be available at the Con-way website.
About Con-way Inc. -- Con-way Inc. (NYSE:CNW) is a $5.0 billion freight transportation and logistics services company headquartered in Ann Arbor, Mich. 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), full truckload and multimodal freight transportation, as well as logistics, warehousing and supply chain management services. Con-way also operates Road Systems Inc., a trailer refurbishing and manufacturing company which supplies trailing equipment to the company's trucking fleets. 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, the possibility that Con-way may, from time to time, be required to record impairment charges for goodwill, intangible assets and other long-lived assets, the possibility of defaults under Con-way's revolving 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 2010 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 Income
(Dollars in thousands except per share amounts)
Three Months Ended
June 30,
--------
2011 2010
---- ----
Revenue
Freight $839,829 $816,965
Logistics [a] 394,012 385,775
Truckload 155,451 145,454
Other 12,297 14,019
Inter-segment Revenue
Eliminations (53,040) (55,950)
------- -------
$1,348,549 $1,306,263
========== ==========
Operating Income (Loss)
Freight $39,155 $17,226
Logistics [b] 12,095 13,008
Truckload 10,323 5,132
Other (1,408) 66
------ ---
60,165 35,432
Other Expense, net 14,721 15,121
------ ------
Income before Income Tax
Provision 45,444 20,311
Income Tax Provision 16,022 6,448
------ -----
Net Income Available to
Common Shareholders $29,422 $13,863
======= =======
Weighted-Average Common
Shares Outstanding
Basic 55,413,243 51,665,047
Diluted 56,136,065 52,362,407
Income Per Common Share
Basic $0.53 $0.27
===== =====
Diluted $0.52 $0.26
===== =====
[a] Logistics' net revenue
Revenue $394,012 $385,775
Purchased transportation
expense (247,028) (242,978)
-------- --------
Net revenue $146,984 $142,797
Six Months Ended
June 30,
--------
2011 2010
---- ----
Revenue
Freight $1,607,570 $1,541,968
Logistics [a] 763,987 740,958
Truckload 300,666 286,070
Other 24,294 25,858
Inter-segment Revenue
Eliminations (102,341) (126,680)
-------- --------
$2,594,176 $2,468,174
========== ==========
Operating Income (Loss)
Freight $59,499 $14,073
Logistics [b] 20,741 25,864
Truckload 17,406 8,107
Other (785) 1,788
---- -----
96,861 49,832
Other Expense, net 30,056 32,435
------ ------
Income before Income Tax
Provision 66,805 17,397
Income Tax Provision 30,461 7,571
------ -----
Net Income Available to
Common Shareholders $36,344 $9,826
======= ======
Weighted-Average Common
Shares Outstanding
Basic 55,227,528 50,506,809
Diluted 55,939,330 51,184,703
Income Per Common Share
Basic $0.66 $0.19
===== =====
Diluted $0.65 $0.19
===== =====
[a] Logistics' net revenue
Revenue $763,987 $740,958
Purchased transportation
expense (474,682) (453,912)
-------- --------
Net revenue $289,305 $287,046
[b] Includes a $2.8 million prior-year first-quarter charge for the
write-off of a customer-relationship intangible asset.
Con-way Inc.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(Dollars in thousands except per share amounts)
Three Months Ended
June 30,
--------
2011 2010
---- ----
Net Income Available to Common
Shareholders $29,422 $13,863
Before-Tax Reconciling Items
Impairment of goodwill and other
intangible assets - -
--- ---
$- $-
Tax-Related Reconciling Items
Tax effect of items above - -
Changes in annual effective tax rate 117 20
Discrete tax adjustments 1,129 2,204
----- -----
$1,246 $2,224
Adjusted Non-GAAP Financial Measures:
Net Income Available to Common
Shareholders $28,176 $11,639
======= =======
Net Income Per Diluted Common Share $0.50 $0.22
===== =====
Diluted Common Shares Outstanding 56,136,065 52,362,407
Six Months Ended
June 30,
--------
2011 2010
---- ----
Net Income Available to Common
Shareholders $36,344 $9,826
Before-Tax Reconciling Items
Impairment of goodwill and other
intangible assets - (2,767)
--- ------
$- $(2,767)
Tax-Related Reconciling Items
Tax effect of items above - 692
Changes in annual effective tax rate 267 20
Discrete tax adjustments (5,342) 1,019
------ -----
$(5,075) $1,731
Adjusted Non-GAAP Financial Measures:
Net Income Available to Common
Shareholders $41,419 $10,862
======= =======
Net Income Per Diluted Common Share $0.74 $0.21
===== =====
Diluted Common Shares Outstanding 55,939,330 51,184,703
Information About Non-GAAP Financial 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 to
rely on any single financial measure.
Con-way Inc.
Consolidated Condensed Balance Sheets
(Dollars in thousands)
June 30, December 31,
2011 2010
---- ----
ASSETS
Current assets $1,242,504 $1,120,077
Property, plant and equipment, net 1,431,260 1,404,585
Other assets 414,687 419,070
------- -------
Total Assets $3,088,451 $2,943,732
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $742,242 $651,890
Long-term debt and capital leases 784,343 793,950
Other long-term liabilities and
deferred credits 690,853 678,360
Shareholders' equity 871,013 819,532
------- -------
Total Liabilities and Shareholders'
Equity $3,088,451 $2,943,732
========== ==========
SOURCE Con-way Inc.
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