CNF Inc. Income from Continuing Operations Climbs 42 Percent in First Quarter 2005.PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif. -- CNF CNF Configuration (File Name Extension) CNF Conference CNF Conjunctive Normal Form CNF Could Not Find CNF Chin National Front (Burma) CNF Canadian Nature Federation CNF Cornell NanoScale Facility Inc. (NYSE NYSE See: New York Stock Exchange :CNF) today reported first-quarter 2005 after-tax income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $38.9 million (after preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends), or 69 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, up 42 percent. This compares with first-quarter 2004 after-tax income from continuing operations of $27.4 million, or 50 cents per diluted share. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the first quarter was $73.3 million, up 32 percent from $55.4 million in the same quarter a year ago. Revenue for the first quarter of 2005 was $947.7 million, up 12 percent from $846.9 million in first-quarter 2004. Net income in the first quarter for common shareholders was $29.1 million, or 52 cents per diluted share, up 19 percent. This compares with net income for common stock shareholders of $24.4 million, or 45 cents per diluted share in the first quarter a year ago. Net income for common shareholders included a $9.8 million loss (17 cents per diluted share) from the discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of Menlo Worldwide Menlo Worldwide is a global supply chain company based in San Mateo, California which operates in approximately 14 countries worldwide. Its core business offerings include 3rd-party logistics and 4th-party supply chain management. Forwarding, which was sold in December 2004. The sale is recognized as discontinued operations and prior periods have been restated. Charges from the disposition of Forwarding to date total $286 million, which includes the $9.8 million in the first quarter of 2005. Commenting on the quarterly results and operations, W. Keith Kennedy, chairman and interim chief executive officer, said, "Con-Way increased earnings by more than 30 percent, primarily from less-than-truckload (LTL LTL - Linear Temporal Logic ) growth across all regions of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Productivity, cost controls and customer service all excelled in the quarter for Con-Way. Our logistics services provider, Menlo Worldwide, also had a good quarter with earnings up almost 15 percent." The company said it had repurchased $32 million in company stock in the first quarter as part of a previously announced $300 million stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program to occur over the next two years. The company said it expects to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. approximately $40 million in shares in the second quarter of 2005. CON-WAY TRANSPORTATION SERVICES For the first quarter of 2005, Con-Way Transportation Services reported: --Operating income of $62.9 million, up 31 percent from $47.9 million in the year-ago period. --Revenue of $659.4 million, an increase of 11 percent from last year's first-quarter revenue of $593.9 million. --Regional carrier yield increased 5 percent from the prior-year quarter. --The regional carrier group achieved an improved operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: of 89.5 percent compared to 91 percent in the first quarter of 2004. MENLO WORLDWIDE CNF's Menlo Worldwide operations include the results for Menlo Logistics and Vector SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. . For the first quarter of 2005, Menlo Worldwide reported: --Total segment operating income of $9.7 million, up 15 percent, compared with $8.4 million in the first quarter of 2004. --Menlo Logistics' revenue of $282.9 million, up 12 percent from the prior-year quarter of $252.8 million. --Operating income for Menlo Logistics was $5.7 million in the first quarter, down 6 percent from $6.0 million in the first quarter of 2004. --Operating income at Vector SCM was $4.0 million in the first quarter, up 69 percent from $2.4 million in the prior-year quarter. OTHER CNF's "other" operations, which includes the results of Road Systems trailer manufacturing and corporate activities, reported an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $635,000 compared to a loss $852,000 in the first quarter of 2004. The effective tax rate in the first quarter of 2005 was 38 percent, compared to 39 percent in the first quarter of 2004. SECOND-QUARTER 2005 OUTLOOK Second-quarter 2005 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations are expected to be between 92 cents and $1.00. This compares with 61 cents per diluted share earned from continuing operations in the second quarter of 2004. CNF's tax rate is expected to be 39 percent in the second quarter. CONFERENCE CALL CNF will host a conference call for shareholders and the investment community to discuss first quarter results at 11 a.m. Eastern Daylight Time (8 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ) on Thursday, April 21. 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. Related financial and operating statistics to be discussed on the conference call are available on the company's website at http://www.cnf.com/investor_relations/fin_hilight.asp. The call will also be available through a live web cast at the investor relations Investor relations The process by which the corporation communicates with its investors. section of the CNF web site www.cnf.com and at www.streetevents.com. An audio replay will be available for one week following the call at (800) 642-1687 or (706) 645-9291 (for international callers), using access code 4697886. The replay will also be available for one week on demand at the same web casting sites providing access to the live call. Investors may obtain additional operating data from CNF's Consolidated Financial Summaries, which will be posted on the investor relations section of the CNF web site at www.cnf.com later today. CNF is a $3.7 billion management company of supply chain service providers. It has businesses in less-than-truckload motor carriage, truckload truck·load n. The quantity that a truck can hold. truckload n → camión m lleno carriage, air freight air freight n → flete m por avión air freight n → fret aérien air freight air n → Luftfracht f , logistics and supply chain management and trailer manufacturing. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 CNF'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 CNF, any statements regarding future economic conditions or performance, 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, the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of CNF's customers and their ability to pay for services rendered, increasing competition and pricing pressure, changes in fuel prices, the effects of the cessation cessation Vox populi The stopping of a thing. See Smoking cessation. of the air carrier operations of Emery Worldwide Emery Worldwide was a cargo airline, once was one of the leading carriers in the cargo airline world. Emery started in 1946 and was the first freight forwarder to receive a carrier certificate from the United States Government. Airlines, the possibility that CNF may, from time to time, be required to record impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges for long-lived assets, the possibility of defaults under CNF's $400 million credit agreement and other debt instruments (including defaults resulting from additional unusual charges), and the possibility that CNF may be required to repay certain indebtedness in the event that the ratings assigned to its long-term senior debt by credit rating agencies Credit Rating Agencies Firms that compile information on and issue public credit ratings for a large number of companies. are reduced, labor matters, enforcement of and changes in governmental regulations, environmental and tax matters, matters relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc CNF's 1996 spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of Consolidated Freightways Consolidated Freight was the 3rd biggest trucking company in the US. In the 1930s they started their own truck manufacturing operation, Freightliner, now part of DaimlerChrysler. Corporation (CFC CFC See: Controlled foreign corporation ), including the possibility that CFC's multi-employer pension plans may assert claims against CNF, matters relating to the sale of Menlo Worldwide Forwarding, Inc., including CNF's obligation to indemnify To compensate for loss or damage; to provide security for financial reimbursement to an individual in case of a specified loss incurred by the person. Insurance companies indemnify their policyholders against damage caused by such things as fire, theft, and flooding, which the buyer for certain losses in connection the sale, and matters relating to CNF's defined benefit pension plans. The factors included herein and in Item 7 of CNF's 2004 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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.
CNF INC.
STATEMENTS OF CONSOLIDATED INCOME
(Dollars in thousands except per share amounts)
Three Months Ended
March 31,
-----------------------
2005 2004
----------- -----------
REVENUES $947,683 $846,920
Costs and Expenses
Operating expenses 768,733 691,817
Selling, general and administrative expenses 79,226 74,445
Depreciation 26,468 25,210
----------- -----------
874,427 791,472
----------- -----------
OPERATING INCOME 73,256 55,448
Other Expense, net (7,443) (7,177)
----------- -----------
Income Before Taxes 65,813 48,271
Income Tax Provision 24,962 18,826
----------- -----------
Income from Continuing Operations 40,851 29,445
----------- -----------
Discontinued Operations, net of tax
Loss from Disposal (9,776) -
Loss from Discontinued Operations - (3,016)
----------- -----------
(9,776) (3,016)
Net Income 31,075 26,429
Preferred Stock Dividends 1,989 2,022
----------- -----------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $29,086 $24,407
=========== ===========
Weighted-Average Common Shares Outstanding
Basic 52,348,984 49,835,663
Diluted (a) 56,610,719 57,125,185
Earnings (Loss) Per Common Share
Basic
Net income from Continuing Operations $0.74 $0.55
Loss from Disposal, net of tax (0.18) -
Loss from Discontinued Operations, net of
tax - (0.06)
----------- -----------
$0.56 $0.49
=========== ===========
Diluted (a)
Net income from Continuing Operations $0.69 $0.50
Loss from Disposal, net of tax (0.17) -
Loss from Discontinued Operations, net of
tax - (0.05)
----------- -----------
$0.52 $0.45
=========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation Services $659,373 $593,876
Menlo Worldwide Logistics 282,901 $252,790
CNF Other 5,409 254
----------- -----------
$947,683 $846,920
=========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation Services $62,933 $47,866
Menlo Worldwide
Logistics 5,653 6,042
Vector 4,035 2,392
----------- -----------
9,688 8,434
----------- -----------
CNF Other 635 (852)
----------- -----------
$73,256 $55,448
=========== ===========
(a) The three months ended March 31, 2005 include the dilutive effect
of restricted stock, stock options and Series B preferred stock.
The prior year also includes the dilutive effect of convertible
subordinated debentures, which were redeemed on June 1, 2004.
CNF INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
2005 2004
------------ ------------
ASSETS
Current assets $1,486,668 $1,509,767
Current assets of discontinued operations 5,128 5,128
Property, plant and equipment, net 859,718 859,321
Other assets 89,242 106,965
Non-current assets of discontinued
operations 14,777 15,220
------------ ------------
Total Assets $2,455,533 $2,496,401
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $643,397 $678,126
Current liabilities of discontinued
operations 23,446 34,705
Long-term debt and guarantees 585,148 601,344
Other long-term liabilities and deferred
credits 403,515 397,997
Long-term liabilities of discontinued
operations 2,666 6,862
Shareholders' equity 797,361 777,367
------------ ------------
Total Liabilities and Shareholders'
Equity $2,455,533 $2,496,401
============ ============
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