CNF Inc. Reports Improved Fourth-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)--Jan. 26, 2004 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 fourth-quarter net income for common shareholders of $26.8 million or 49 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, including an 8 cents per diluted share charge for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). the domestic operations 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. This represents an increase of 22 percent in net income from the fourth quarter of 2002 when CNF reported net income for common shareholders of $22.0 million, or 41 cents per diluted share. That prior-year period included a net loss of 4 cents per diluted share from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and, in 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 , a 6 cent per diluted share net gain from settlement of the company's former Express Mail contract. 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. for the fourth quarter of 2003 was $56.0 million, including the $7.8 million Menlo Worldwide Forwarding restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , compared with $54.0 million in the fourth quarter of 2002, which included a $5.7 million net gain from settlement of the company's former Express Mail contract. Revenue for the fourth quarter of 2003 was $1.35 billion compared with $1.28 billion in the prior year period. CNF's effective tax rate for the fourth quarter of 2003 was 40 percent. For the full year 2003, CNF reported net income for common shareholders of $83.8 million, or $1.57 per diluted share, including 12 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. of net charges from special items. This compares with net income for common shareholders for the full year 2002 of $93.6 million, $1.74 per diluted share, which included a net loss of 22 cents per diluted share from discontinued operations. In continuing operations, it also included a tax benefit of 44 cents per diluted share and a net gain of 27 cents per diluted share from special items. Operating income for the full year 2003 was $191.4 million, up 5 percent, and included $7.1 million in net charges from special items. This compares with $181.8 million in operating income for the full year 2002, which included $24.9 million in net gains from special items. Revenue for the full year 2003 was $5.1 billion, up 7 percent from $4.8 billion in 2002. "CNF's results in the fourth quarter were improved from 2002, driven by a recovering economy and continued tight cost controls," said CNF President and Chief Executive Officer Gregory L. Quesnel Quesnel or Quesnell may refer to: Places
named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. infrastructure into line with its revenue levels. These actions will continue in 2004. "Menlo Worldwide Logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. and Vector SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. each made significant contributions to earnings for the quarter and the year," Quesnel said. CNF ended the year with a strong balance sheet including $ 321.5 million in cash. Con-Way Transportation Services For the fourth quarter of 2003, Con-Way Transportation Services reported: -- operating income of $58 million , up 58 percent from $36.7 million in the year-ago period -- revenue of $577.5 million, up 10 percent from $525.1 million in last year's fourth quarter -- Regional carrier operating income was $59.7 million compared with $39.9 million a year ago. -- regional carrier weight per day rose 9.4 percent from the prior year. Menlo Worldwide For the fourth quarter of 2003, Menlo Worldwide reported: -- 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 $2.6 million, which included the $7.8 million restructuring charge for Menlo Worldwide Forwarding, compared with operating income of $18.2 million in the fourth quarter of 2002, which included the $5.7 million net gain from settlement of the Express Mail contract. -- revenue of $777.2 million compared with $753.3 million in the prior year's fourth quarter. For the fourth quarter, Menlo Worldwide Forwarding reported: -- an operating loss of $14.0 million, which included the $7.8 million restructuring charge. This compares with operating income of $4.6 million in the fourth quarter of 2002, which included the $5.7 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain from the Express Mail contract settlement. -- revenue of $524.4 million, up 5 percent from $497.4 million in the fourth quarter of 2002 -- international revenue per day grew 12 percent compared with the prior-year period on a weight-per-day increase of 20.4 percent. -- North American revenue per day fell by 6.8 percent on a 3.4 percent increase in weight per day and a 9.9 percent decline in yield that was due primarily to a product mix change to more second-day and deferred freight The price or compensation paid for the transportation of goods by a carrier. Freight is also applied to the goods transported by such carriers. The liability of a carrier for freight damaged, lost, or destroyed during shipment is determined by contract, statute, or . For the fourth quarter of 2003, Menlo Worldwide Logistics reported: -- operating income of $6.1 million compared to $8.6 million a year ago -- revenue of $252.8 million compared to $255.9 million in the prior-year period. For the fourth quarter of 2003, activities at Menlo Worldwide Other, which consists of the results of Vector SCM, reported operating income of $5.4 million, up 9 percent from $4.9 million in the fourth quarter of 2002. Other CNF's "Other" operations reported operating income of $565,000 in the fourth quarter. First-Quarter Outlook First-quarter 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 are expected to be between 29 cents and 37 cents compared to first-quarter 2003 diluted earnings per share of 30 cents, which included an 8 cent benefit. CNF's tax rate is expected to be 39 percent. Conference Call CNF will host a conference call for shareholders and the investment community to discuss fourth-quarter results at 12:00 p.m. Eastern time (9:00 a.m. Pacific) tomorrow. The call can be accessed by dialing (888) 428-4480 or (651) 291-5254 (for international callers only) and is expected to last approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 712336. The replay will also be available for one week on demand at the web sites providing access to the live call. Investors may obtain additional operating data from CNF's Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Financial Summaries, which will be posted on the investor relations section of the CNF web site at www.cnf.com later today. CNF Inc. is a $5.1 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 BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. , 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 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 regarding contributions to pension plans, any statements as to the adequacy of reserves, any statements regarding the possible outcome of claims 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 of additional unusual charges and other costs and expenses related to Menlo Menlo (Mionnloch) is a small village in the parish of Castlegar, on the outskirts of Galway, Ireland. Its name was re-used by Irish colonists in America. It is bordered by Lough Corrib and the River Corrib, to the North West. Worldwide's forwarding operations, 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 goodwill and other long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets, the possibility of defaults under CNF's $385 million credit agreement and other debt instruments (including defaults resulting from additional unusual charges), and the possibility that CNF may be required to pledge A Bailment or delivery of Personal Property to a creditor as security for a debt or for the performance of an act. Sometimes called bailment, pledges are a form of security to assure that a person will repay a debt or perform an act under contract. collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although 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 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, the February February: see month. 2000 crash of an 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 aircraft and related 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. , 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, and matters relating to CNF's defined benefit pension plans. The factors included herein and in Item 7 of CNF's 2002 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
December 31,
-------------------------
2003 2002
----------- -----------
REVENUES $ 1,354,814 $ 1,278,625
Costs and Expenses
Operating expenses 1,136,486 1,075,529
Selling, general and
administrative expenses 129,873 115,974
Depreciation 32,444 33,100
----------- -----------
1,298,803 1,224,603
----------- -----------
OPERATING INCOME 56,011 54,022
Other expense, net (7,668) (10,727)
----------- -----------
Income before Taxes 48,343 43,295
Income Tax Provision 19,464 16,885
----------- -----------
Income from Continuing Operations 28,879 26,410
Loss from Discontinuance, net of tax - (2,259)(b)
----------- -----------
Net Income 28,879 24,151
Preferred Stock Dividends 2,114 2,200
----------- -----------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $ 26,765 $ 21,951
=========== ===========
Weighted-Average Common Shares Outstanding
Basic 49,709,146 49,327,589
Diluted (a) 57,109,665 56,741,862
Earnings per Common Share
Basic
Net income from continuing operations $ 0.54 $ 0.49
Loss from discontinuance, net of tax - (0.04)
----------- -----------
Net Income Available to
Common Shareholders $ 0.54 $ 0.45
=========== ===========
Diluted (a)
Net income from continuing operations $ 0.49 $ 0.45
Loss from discontinuance, net of tax - (0.04)
----------- -----------
Net Income Available to
Common Shareholders $ 0.49 $ 0.41
=========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation Services $ 577,472 $ 525,089
Menlo Worldwide
Forwarding 524,405 497,367
Logistics 252,775 255,947
----------- -----------
777,180 753,314
----------- -----------
CNF Other 162 222
----------- -----------
$ 1,354,814 $ 1,278,625
=========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation Services $ 58,011 $ 36,700
Menlo Worldwide
Forwarding (14,026) 4,620
Logistics 6,101 8,644
Other 5,360 4,921
----------- -----------
(2,565) 18,185
----------- -----------
CNF Other 565 (863)
----------- -----------
$ 56,011 $ 54,022
=========== ===========
ITEMS AFFECTING COMPARABILITY OF OPERATING INCOME (LOSS) FOR THE
PERIODS PRESENTED:
Con-Way Transportation Services -
Net gain from the sale of a property $ - $ -
Menlo Worldwide -
Forwarding -
Restructuring charge (7,800) -
Net gains from payments under the
Air Transportation Safety and
System Stabilization Act - -
Loss for the resolution of a
hazardous materials violation case - -
Express Mail settlement - 5,715
Logistics -
Net gain from a contract termination - -
CNF Other -
Loss from uncollectible non-trade receivables - -
Net gain from the sale of a property - -
----------- -----------
Total $ (7,800) $ 5,715
=========== ===========
Twelve Months Ended
December 31,
------------ --------------
2003 2002
----------- -----------
REVENUES $ 5,104,332 $ 4,762,119
Costs and Expenses
Operating expenses 4,283,489 3,979,137
Selling, general and
administrative expenses 496,784 461,807
Depreciation 132,622 139,355
----------- -----------
4,912,895 4,580,299
----------- -----------
OPERATING INCOME 191,437 181,820
Other expense, net (35,421) (35,576)
----------- -----------
Income before Taxes 156,016 146,244
Income Tax Provision 63,992 (c) 32,035 (d)
----------- -----------
Income from Continuing Operations 92,024 114,209
Loss from Discontinuance, net of tax - (12,398)
----------- -----------
Net Income 92,024 101,811
Preferred Stock Dividends 8,239 8,250
----------- -----------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $ 83,785 $ 93,561
=========== ===========
Weighted-Average Common Shares Outstanding
Basic 49,537,945 49,139,134
Diluted (a) 56,725,667 56,655,570
Earnings per Common Share
Basic
Net income from
continuing operations $ 1.69 $ 2.16
Loss from discontinuance, net of tax - (0.26)
----------- -----------
Net Income Available to
Common Shareholders $ 1.69 $ 1.90
=========== ===========
Diluted (a)
Net income from
continuing operations $ 1.57 $ 1.96
Loss from discontinuance, net of tax - (0.22)
----------- -----------
Net Income Available to
Common Shareholders $ 1.57 $ 1.74
=========== ===========
OPERATING SEGMENTS
REVENUES
Con-Way Transportation Services $ 2,212,597 $ 2,011,477
Menlo Worldwide
Forwarding 1,881,496 1,778,712
Logistics 1,009,952 969,089
----------- -----------
2,891,448 2,747,801
----------- -----------
CNF Other 287 2,841
----------- -----------
$ 5,104,332 $ 4,762,119
=========== ===========
OPERATING INCOME (LOSS)
Con-Way Transportation Services $ 195,343 $ 147,154
Menlo Worldwide
Forwarding (47,579) (11,980)
Logistics 25,312 31,827
Other 20,718 18,188
----------- -----------
(1,549) 38,035
----------- -----------
CNF Other (2,357) (3,369)
----------- -----------
$ 191,437 $ 181,820
=========== ===========
ITEMS AFFECTING COMPARABILITY OF OPERATING INCOME (LOSS) FOR THE
PERIODS PRESENTED:
Con-Way Transportation Services -
Net gain from the sale
of a property $ - $ 8,675
Menlo Worldwide -
Forwarding -
Restructuring charge (7,800) -
Net gains from payments under
the Air Transportation Safety and
System Stabilization Act 7,230 9,895
Loss for the resolution of a
hazardous materials
violation case (6,500) -
Express Mail settlement - 5,715
Logistics -
Net gain from a contract termination - 1,850
CNF Other -
Loss from uncollectible
non-trade receivables - (3,595)
Net gain from the sale of a property - 2,367
----------- -----------
Total $ (7,070) $ 24,907
=========== ===========
(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 a $2.9 million net-of-tax gain on final Priority Mail
settlement and a $13.0 million net-of-tax loss related to the
business failure of CFC.
(c) Excludes tax impact on a third-quarter non-deductible loss for the
resolution of a hazardous materials violation case with the U.S.
government.
(d) Includes tax provision of $57.0 million for the twelve months
ended December 31, 2002, partially offset by a $25.0 million
third-quarter reversal of accrued taxes related to the settlement
with the IRS of aircraft maintenance issues.
CNF INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31,
2003 2002
------------ -----------
ASSETS
Current assets $1,318,022 $1,268,488
Property, plant and equipment, net 997,455 1,015,354
Other assets 435,718 455,919
------------ -----------
Total Assets $2,751,195 $2,739,761
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $804,425 $873,054
Long-term debt, guarantees and capital
leases 536,314 557,610
Other long-term liabilities and deferred
credits 466,649 466,099
Preferred stock - subsidiary trust 125,000 125,000
Shareholders' equity 818,807 717,998
------------ -----------
Total Liabilities and Shareholders'
Equity $2,751,195 $2,739,761
============ ===========
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