CNF Inc. Reports Third-Quarter Results.Business Editors/Transportation Writers 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)--Oct. 21, 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 third-quarter net 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 $43.6 million or 79 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. Third-quarter net income for common shareholders was $33.5 million, or 61 cents per diluted share, including a net loss of $10.1 million (18 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. . In the third quarter of 2001, net income for common shareholders was $28.6 million, or 59 cents per diluted share, and included an 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. gain of $39.0 million (80 cents per diluted share) from discontinued operations. The 79 cents per diluted share from continuing operations included the following unusual items: a tax benefit of $25.0 million (44 cents per diluted share) from the settlement of a tax issue related to aircraft maintenance expense, and an after-tax loss of $2.2 million (4 cents per diluted share) from the writeoff writeoff A reduction to zero in the value of an asset carried on a firm's financial statement. Companies often hesitate to make writeoffs because profits reported to stockholders are reduced. of uncollectable receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . The above-mentioned A`bove´-men`tioned a. 1. Mentioned or named before; aforesaid; mentioned or named earlier in the same text (in written documents). Adj. 1. third-quarter loss of 18 cents per diluted share from discontinued operations in 2002 included a $2.9 million (5 cents per diluted share) net gain on the final settlement of the former Priority Mail contract that was offset by a $13.0 million (23 cents per diluted share) after-tax loss provision for remaining workers compensation claims 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. incurred prior to its spinoff Spinoff A new, independent company created through selling or distributing new shares for an existing part of another company. Notes: Spinoffs may be done through a rights offering. from CNF in 1996. 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 third quarter of 2002 was $43.5 million compared with a loss of $5.4 million in the same period a year ago. Revenue for the third quarter of 2002 was $1.23 billion compared with $1.18 billion in third-quarter 2001. "Quarterly results at Con-Way Con-way, Inc. (NYSE: CNW) is a $ 4.2 billion freight transportation and logistics company with businesses in less-than-truckload and full truckload freight services, truckload brokerage, logistics, warehousing, supply chain management and trailer manufacturing, based in San , 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 and 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. Logistics were slightly improved from those of the second quarter. Operating income at our Vector SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. unit was below expectations due to delays in implementing new business cases," said CNF President and Chief Executive Officer Gregory L. Quesnel. "All of the CNF companies continue to meet their productivity and cost goals and the strategic moves we made in the past year are producing the planned results. We were also pleased to see modest year-over-year revenue increases at Con-Way and Menlo Worldwide Logistics." For the first nine months of 2002, net income for common shareholders was $71.6 million or $1.33 per diluted share. This compares with a net loss for common shareholders of $185.8 million, or $3.81 per diluted share, for the first nine months of 2001. Operating income for the first nine months of 2002 was $127.8 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 $323.6 million in the same period a year ago. Revenue for the first nine months of 2002 was $3.48 billion compared with $3.72 billion in the same period of 2001. Con-Way Transportation Services For the third quarter of 2002, Con-Way Transportation Services reported: -- operating income of $41.6 million compared with $42.6 million in the year-ago period. -- revenue of $527.7 million, up 7 percent from last year's $491.2 million. -- regional carrier weight per day was essentially flat compared to the prior-year. 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 Forwarding, Menlo Worldwide Logistics, Menlo Worldwide Technologies, and Vector SCM. "Menlo Worldwide Other" includes the results of Vector SCM and Menlo Worldwide Technologies. For the third quarter of 2002, Menlo Worldwide reported: -- operating income of $6.0 million compared with an operating loss of $45.9 million in the year-ago period. -- revenue of $701.8 million compared with $693.2 million in the third quarter of 2001. For the third quarter of 2002, Emery Forwarding reported: -- an operating loss of $5.0 million compared with an operating loss of $47.0 million in the year-ago period. -- revenue of $447.0 million, down 5 percent from $471.5 million a year ago, which included $24.5 million from the former Express Mail contract. -- North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. air freight air freight n → flete m por avión air freight n → fret aérien air freight air n → Luftfracht f revenue per day declined 6 percent on a 5 percent increase in weight per day and a 10 percent decline in yield that was due primarily to a planned product mix change to more second-day and deferred freight, -- international air freight revenue per day grew 3 percent compared with the prior-year period on a weight-per-day increase of 2 percent. For the third quarter of 2002, Menlo Worldwide Logistics reported: -- operating income of $8.4 million compared to operating income of $1.0 million a year ago, which included a $6.3 million writeoff of uncollectable receivables from the business failure of a customer. -- revenue of $255.0 million, up 15 percent from $221.7 million in the prior-year period. For the third quarter of 2002, activities at Menlo Worldwide Other, which includes primarily the results of Vector SCM, reported operating income of $2.6 million compared with operating income of $117,000 in the third quarter of 2001. Other CNF's "Other" operations, which include the results of Road Systems and corporate activities, reported an operating loss of $4.1 million in the third quarter. This loss included the previously mentioned writeoff of uncollectable receivables. Fourth Quarter Outlook Fourth 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 from continuing operations are expected to be between 38 cents and 46 cents. CNF's tax rate is expected to be 39 percent in the fourth quarter. Conference Call CNF will host a conference call for shareholders and the investment community to discuss third-quarter results at 11:00 a.m. Eastern time (8:00 a.m. Pacific) today. The call can be accessed by dialing (800) 230-1074 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 650499. 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 Financial Summaries, which will be posted on the investor relations section of the CNF web site at www.cnf.com later today. CNF (NYSE:CNF) is a $4.9 billion management company of global supply chain services with businesses in regional trucking, air freight, 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 statements regarding future financial condition, results of operations or other future matters, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, any statements of belief, expectations or projections, and any statements or assumptions underlying the foregoing. Forward-looking statements are necessarily dependent on assumptions, estimates, data and methods that may be incorrect or imprecise im·pre·cise adj. Not precise. im  pre·cise ly adv. and there can be no assurance that they will be
realized. 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 CreditworthinessThe 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 cessation cessation Vox populi The stopping of a thing. See Smoking cessation. 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, (including the requirement that EWA surrender its air carrier certificate no later than December 4, 2002), 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 a substantial amount 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 and other claims relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the termination of its former Express Mail contract with the 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. , labor matters, enforcement of and changes in governmental regulations, environmental and 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 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 Corporation ("CFC CFC See: Controlled foreign corporation ") and the September 2002 bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filing by CFC, including the possibility that trustees of CFC's multi-employer pension plans might assert claims that CNF is liable for material amounts owed by CFC under those plans. The factors discussed above and in 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 OPERATIONS
(Dollars in thousands except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- -----------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
REVENUES $1,230,147 $1,184,959 $3,483,494 $3,720,032
Costs and Expenses
Operating
expenses 1,030,236 1,033,337 2,903,608 3,209,398
General and
administrative
expenses 121,612 117,495 345,833 366,298
Depreciation 34,774 39,497 106,255 127,434
Restructuring
charges -- -- -- 340,531
---------- ---------- ---------- ----------
1,186,622 1,190,329 3,355,696 4,043,661
---------- ---------- ---------- ----------
OPERATING INCOME
(LOSS) 43,525 (5,370) 127,798 (323,629)
Other expense, net (9,682) (7,844) (24,849) (23,318)
---------- ---------- ---------- ----------
Income (Loss) before
Taxes 33,843 (13,214) 102,949 (346,947)
Income Tax Benefit
(Provision) 11,801(b) 4,889 (15,150)(b) 128,370
---------- ---------- ---------- ----------
Income (Loss) from
Continuing
Operations 45,644 (8,325) 87,799 (218,577)
Gain (Loss) from
discontinuance,
net of tax (10,139)(c) 38,975 (10,139)(c) 38,975
---------- ---------- ---------- ----------
Net Income (Loss) 35,505 30,650 77,660 (179,602)
Preferred Stock
Dividends 2,002 2,052 6,050 6,171
---------- ---------- ---------- ----------
NET INCOME (LOSS)
APPLICABLE TO COMMON
SHAREHOLDERS $ 33,503 $ 28,598 $ 71,610 $ (185,773)
========== ========== ========== ==========
Weighted-Average
Common Shares
Outstanding
Basic 49,226,241 48,778,789 49,077,089 48,728,252
Diluted(a) 56,755,010 48,778,789 56,700,280 48,728,252
Earnings (Loss) per
Common Share
Basic
Income (Loss)
from
continuing
operations $ 0.89 $ (0.21) $ 1.67 $ (4.61)
Gain (Loss)
from
discontinuance,
net of tax (0.21) 0.80 (0.21) 0.80
---------- ---------- ---------- ----------
Net Income (Loss)
Applicable to
Common
Shareholders $ 0.68 $ 0.59 $ 1.46 $ (3.81)
========== ========== ========== ==========
Diluted(a)
Income (Loss)
from
continuing
operations $ 0.79 $ (0.21) $ 1.51 $ (4.61)
Gain (Loss) from
discontinuance,
net of tax (0.18) 0.80 (0.18) 0.80
---------- ---------- ---------- ----------
Net Income (Loss)
Applicable to
Common
Shareholders $ 0.61 $ 0.59 $ 1.33 $ (3.81)
========== ========== ========== ==========
OPERATING SEGMENTS
REVENUES
Con-Way
Transportation
Services $ 527,689 $ 491,151 $1,486,388 $1,449,314
Menlo Worldwide
Emery Forwarding 446,797 471,485 1,281,345 1,584,841
Menlo Worldwide
Logistics 255,022 221,718 713,142 678,816
---------- ---------- ---------- ----------
701,819 693,203 1,994,487 2,263,657
---------- ---------- ---------- ----------
CNF Other 639 605 2,619 7,061
---------- ---------- ---------- ----------
$1,230,147 $1,184,959 $3,483,494 $3,720,032
========== ========== ========== ==========
OPERATING INCOME
(LOSS)
Con-Way
Transportation
Services $ 41,618 $ 42,617 $ 110,454 $ 121,783
Menlo Worldwide
Emery Forwarding (4,979) (46,975) (16,600) (423,964)
Menlo Worldwide
Logistics 8,371 1,004 23,183 (13,078)
Menlo Worldwide
Other 2,638 117 13,267 (6,178)
---------- ---------- ---------- ----------
6,030 (45,854) 19,850 (443,220)
---------- ---------- ---------- ----------
CNF Other (4,123) (2,133) (2,506) (2,192)
---------- ---------- ---------- ----------
$ 43,525 $ (5,370) $ 127,798 $ 323,629)
========== ========== ========== ==========
UNUSUAL AND/OR NON-RECURRING ITEMS INCLUDED IN OPERATING INCOME (LOSS)
FOR THE PERIODS PRESENTED:
Con-Way
Transportation
Services -
Net gain from
the sale of
property $ -- $ -- $ 8,675 $ --
Menlo Worldwide -
Emery Forwarding
Net gain from
a payment
under the Air
Transportation
Safety and
System
Stabilization
Act -- -- 9,895 --
Loss from
restructuring
charge -- -- -- (340,531)
Loss from a
legal
settlement
on returned
aircraft -- -- -- (4,696)
Goodwill
amortization -- (2,570) -- (8,055)
Express Mail
operating
income -- 1,795 -- 5,433
Menlo Worldwide
Logistics
Net gain from
a contract
termination -- -- 1,850 --
Loss from the
business
failure of
a customer -- (6,300) -- (37,905)
CNF Other
Loss from the
business failure
of a customer (3,595) -- (3,595) --
Net gain from
the sale of
property -- -- 2,367 --
----------------------------------------------------------------------
(a) 2002 includes the dilutive effect of stock options, Series B
(TASP) preferred stock, and Series A "TECONS," convertible
preferred stock of subsidiary trust.
(b) Includes tax provision of $13.2 for the three months ended
September 30, 2002 and tax provision of $40.2 million for the nine
months ended September 30, &#x 1; 2002, offset by a $25.0 million
third-quarter reversal of accrued taxes related to the settlement
with the IRS of aircraft maintenance issues.
(c) 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.
CNF INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
2002 2001
------------- ------------
ASSETS
Current assets $1,346,955 $1,327,846
Property, plant and
equipment, net 1,034,967 1,070,529
Other assets 568,276 591,645
---------- ----------
Total Assets $2,950,198 $2,990,020
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $1,050,747 $884,136
Long-term debt, guarantees
and capital leases 564,419 565,815
Other long-term liabilities
and deferred credits 498,375 776,982
Preferred stock - Subsidiary Trust 125,000 125,000
Shareholders' equity 711,657 638,087
---------- ----------
Total Liabilities and
Shareholders' Equity $2,950,198 $2,990,020
========== ==========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion