CNF Inc. Reports First-Quarter Results.Business Editors 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.--(BUSINESS WIRE)--April 18, 2002 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 net income for common shareholders of $18.3 million, or 35 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. This compares with net income for common shareholders of $13.5 million, or 26 cents per diluted share, in the first quarter of 2001. The 2002 first quarter included a net after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. benefit of $14.0 million from unusual items, which included sales of excess property, a payment under the Air Transportation Safety and System Stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders Act, and proceeds from the early termination of a contract. 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 excluding unusual items were 9 cents. First-quarter 2002 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. was $40.4 million including the unusual items, compared with $33.7 million in the same quarter a year ago. Revenue for the first quarter of 2002 was $1.07 billion compared with $1.28 billion in first-quarter 2001. There were 1.5 fewer working days in the first quarter of 2002. The effective tax rate was 39.0 percent, compared with 40.0 percent a year ago. Cash and cash equivalents stood at more than $400 million at the end of the quarter. "We think we've seen the bottom of the recession," said CNF President and Chief Executive Officer Greg Quesnel. "March was a relatively good month, as both 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. and Con-Way had improved results from February. But overall, the upturn so far is weak." Con-Way Transportation Services For the first quarter, Con-Way Transportation Services reported: -- operating income of $7.8 million compared to operating income of $8.2 million a year ago. The 2002 quarter included a $1.9 million net gain from the termination of a contract and the 2001 quarter included $2 million of operating income from a now bankrupt customer. -- revenue of $216.5 million, down three percent from $222.6 million in the prior-year period. "Con-Way LTL LTL - Linear Temporal Logic tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. grew in the first quarter for the first time in a year and a half. Overall, CTS (1) (Clear To Send) The RS-232 signal sent from the receiving station to the transmitting station that indicates it is ready to accept data. Contrast with RTS. (2) (Common Type System) The data typing used in . is performing well," said Quesnel. "We continue to support Con-Way's investments in its non-LTL businesses: Con-Way Air Express, Con-Way Logistics, Con-Way Now, and its newest service, Con-Way Full Load. While we believe these are important initiatives for Con-Way's growth, they reduced operating income in the quarter by approximately $5 million, compared with $4 million in the first quarter of last year. Con-Way's margins remain strong but have been hurt by one of the most competitive LTL environments in years. Con-Way is committed to defending its core business in the current pricing environment." Menlo Worldwide On December 5, 2001, CNF announced the formation of a new global supply chain services company called Menlo Worldwide that for reporting purposes includes the results of: Emery emery: see corundum. emery Granular rock consisting of a mixture of the mineral corundum (aluminum oxide, Al2O3) and iron oxides such as magnetite (Fe3O4) or hematite (Fe2O3). Forwarding, Menlo Worldwide Logistics, Menlo Worldwide Technologies, and Vector SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. . "Menlo Worldwide Other" includes the results of Vector SCM and Menlo Worldwide Technologies. For the first quarter of 2002, Menlo Worldwide reported: -- operating income of $7.8 million compared to operating income of $8.2 million a year ago. The 2002 quarter included a $1.9 million net gain from the termination of a contract and the 2001 quarter included $2 million of operating income from a now bankrupt customer. -- revenue of $216.5 million, down three percent from $222.6 million in the prior-year period. For the first quarter of 2002, Emery Forwarding reported: -- operating income of $7.8 million compared to operating income of $8.2 million a year ago. The 2002 quarter included a $1.9 million net gain from the termination of a contract and the 2001 quarter included $2 million of operating income from a now bankrupt customer. -- revenue of $216.5 million, down three percent from $222.6 million in the prior-year period. For the first quarter of 2002, Menlo Worldwide Logistics reported: -- operating income of $7.8 million compared to operating income of $8.2 million a year ago. The 2002 quarter included a $1.9 million net gain from the termination of a contract and the 2001 quarter included $2 million of operating income from a now bankrupt customer. -- revenue of $216.5 million, down three percent from $222.6 million in the prior-year period. For the first quarter of 2002, Menlo Worldwide Other, which includes primarily the results of Vector SCM, reported operating income of $1.3 million compared with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $4.6 million in the first quarter of 2001. "Emery Forwarding volumes continue to be depressed resulting in losses at that unit," said Quesnel. "The formation of Menlo Worldwide has been beneficial to customers and we are achieving our cost reduction goals associated with closing the company's freight airline. While Emery's loss in the quarter is disappointing, we are no longer seeing the much-larger losses we experienced during most of last year. Our move to add more second-day and deferred freight to Emery's ground system is working well, but total volumes at Emery are still only about half of what they were when the economy was at its peak. "Concerning other Menlo Worldwide businesses, Menlo Worldwide Logistics' profits were down five percent from a year ago. We are pleased to see that Vector SCM posted its first quarterly profit in excess of $1 million." Other CNF's "Other" operations, which include the results of Road Systems and corporate activities, reported operating income of $3.3 million in the first quarter, primarily due to a $2.4 million net gain on the sale of excess corporate properties. Outlook Looking at the second quarter, tonnage at Con-Way is expected to be marginally down compared with last year's second quarter, with yields expected to be up slightly. Con-Way's non-LTL business units are expected to report results similar to the first quarter of this year. At the Emery Forwarding unit, volume in 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. is expected to be down about ten percent from last year's second quarter while yield is expected to also be down about ten percent, reflecting a planned product mix change toward more revenue from second-day and deferred freight. International volume is expected to be about flat with an increase in air haul cost. At the Menlo Worldwide Logistics unit, revenue is expected to be about even with the second quarter of last year and profits and margins are expected to be lower. The Vector SCM unit is expected to exceed its first quarter results. 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 investing community to discuss first-quarter results at 11:00 a.m. Eastern time (8:00 a.m. Pacific) on Thursday, April 18. The call can be accessed by dialing (888) 276-0005 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 web cast at the investor relations Investor relations The process by which the corporation communicates with its investors. section of the CNF web site at www.cnf.com and at www.streetevents.com. An audio replay will be available for one week following the call at (800) 475-6701, access code 631901. The replay will also be available for one week on demand at the web sites providing access to the live call. CNF (NYSE:CNF) is a $4.9 billion management company of global supply chain services with businesses in regional trucking, air freight air freight n → flete m por avión air freight n → fret aérien air freight air n → Luftfracht f , ocean freight, customs brokerage, global logistics management Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective, forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet and trailer In communications, a code or set of codes that make up the last part of a transmitted message. See trailer label. 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 news 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 future economic conditions or performance, statements of belief and any statements or assumptions underlying the foregoing. Specific factors that could cause actual earnings, results of operations 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 the Company's customers and their ability to pay for services rendered, increasing competition and pricing pressure, changes in fuel prices, the effects of the suspension and subsequent termination 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' (EWA EWA Enterprise Wireless Alliance EWA Electronic Warfare Associates, Inc. EWA Energy from Waste Association (UK) EWA Engineered Wood Association EWA Edgewood Arsenal EWA Earl Walls Associates ) air carrier operations, the possibility of defaults under CNF's $385 million credit agreement and other debt instruments and aircraft leases (including defaults that could result from additional unusual charges or CNF's failure to perform in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with management's expectations), and the possibility that CNF may be required to pledge collateral to secure some of its indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. or to repay other indebtedness in the event that the ratings assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. senior debt are reduced, uncertainties regarding EWA's ability to recover all termination costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its former Priority Mail contract with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval (USPS (1) (Uninterruptible Switching Power Supply) A power supply for a computer that contains its own battery and uninterruptible power supply (UPS) circuitry. See power supply and UPS. ), uncertainties regarding EWA's ability to recover all termination costs and other claims relating to the termination of its former Express Mail contract with the USPS, labor matters, enforcement of and changes in governmental regulations, environmental and tax matters (including claims made by the Internal Revenue Service with respect to aircraft maintenance tax matters), the Department of Transportation investigation relating to Emery Worldwide's handling of hazardous materials and aircraft maintenance, the February 2000 crash of an EWA aircraft and related investigation and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , and matters relating to the company'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. The factors included here and in Item 7 of our 2001 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 position or results of operations.
CNF INC.
STATEMENTS OF CONSOLIDATED INCOME
(Dollars in thousands except per share amounts)
Three Months Ended
March 31,
-----------------------------
2002 2001
----------- -----------
REVENUES $ 1,067,074 $ 1,278,465
Costs and Expenses
Operating expenses 881,090 1,073,786
General and administrative
expenses 109,776 127,202
Depreciation 35,844 43,749
----------- -----------
1,026,710 1,244,737
----------- -----------
OPERATING INCOME 40,364 33,728
Other expense, net (7,142) (7,800)
----------- -----------
Income before Taxes 33,222 25,928
Income Tax Provision (12,956) (10,371)
----------- -----------
Net Income 20,266 15,557
Preferred Stock Dividends 2,005 2,040
----------- -----------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $ 18,261 $ 13,517
=========== ===========
Weighted-Average Common
Shares Outstanding
Basic shares 48,928,532 48,658,337
Diluted shares (a) 56,482,649 56,432,452
Earnings per Common Share
Basic $ 0.37 $ 0.28
=========== ===========
Diluted (a) $ 0.35 $ 0.26
=========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation Services $ 454,731 $ 468,970
Menlo Worldwide
Emery Forwarding 394,761 583,198
Menlo Worldwide Logistics 216,509 222,595
----------- -----------
611,270 805,793
----------- -----------
CNF Other 1,073 3,702
----------- -----------
$ 1,067,074 $ 1,278,465
=========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation Services $ 33,721 (b) $ 36,735
Menlo Worldwide
Emery Forwarding (5,713)(c) (6,547)
Menlo Worldwide Logistics 7,753 (d) 8,171
Menlo Worldwide Other 1,309 (4,614)
----------- -----------
3,349 (2,990)
----------- -----------
CNF Other 3,294 (e) (17)
----------- -----------
$ 40,364 $ 33,728
=========== ===========
(a) Includes the dilutive effect of stock options, Series B (TASP)
preferred stock, and Series A "TECONS," convertible preferred
stock of subsidiary trust.
(b) Includes an $8.7 million net gain, $5.3 million after tax, from
the sale of property.
(c) Includes a $9.9 million net gain, $6.0 million after tax, from a
payment under the Air Transportation Safety and System
Stabilization Act.
(d) Includes a $1.9 million net gain, $1.1 million after tax, from a
contract termination.
(e) Includes a $2.4 million net gain, $1.4 million after tax, from the
sale of property.
CNF INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
2002 2001
----------- -----------
ASSETS
Current assets $ 1,335,378 $ 1,327,846
Property, plant and equipment,
net 1,053,263 1,070,529
Other assets 599,804 591,645
----------- -----------
Total Assets $ 2,988,445 $ 2,990,020
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 905,239 $ 883,975
Long-term debt and guarantees 548,472 565,815
Other long-term liabilities and
deferred credits 754,957 777,143
Preferred stock - Subsidiary Trust 125,000 125,000
Shareholders' equity 654,777 638,087
----------- -----------
Total Liabilities and
Shareholders' Equity $ 2,988,445 $ 2,990,020
=========== ===========
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