ANN ARBOR, Mich., April 29, 2015 /PRNewswire/
-- Con-way Inc. (NYSE:CNW) today announced
first-quarter 2015 net income of $21.8
million, or 37 cents per
diluted share. In the first quarter of 2014, Con-way reported net
income of $12.9 million, or
22 cents per diluted share.
On a non-GAAP basis, earnings per diluted share were
39 cents in the first quarter of
2015, compared to 20 cents in the
same period of the prior year. Non-GAAP items, consisting of
pension income/expense and tax-related adjustments, are detailed in
the attached reconciliation.
Operating income for the first quarter of 2015 was $51.9 million, a 57.1 percent increase from the
$33.1 million earned in the same
period a year ago. Revenue of $1.37
billion for the 2015 first quarter increased slightly from
last year's first quarter.
Con-way's effective tax rate for the 2015 first quarter was 40.1
percent, compared to 32.9 percent in the same period of the prior
year. Both tax rates include the effect of discrete and other tax
adjustments (presented in the attached reconciliation).
During the first quarter of 2015, Con-way repurchased 370,000
shares of common stock under the company's $150 million stock
repurchase plan. As of March
31, the company had repurchased a total of 725,000 common
shares under this plan.
Segment results for Con-way's principal operations were as
follows:
FREIGHT
For the first quarter of 2015, Con-way Freight reported:
- Revenue of $855.6 million, a 0.9
percent increase from $848.0 million
in the first quarter of the prior year. The year-over-year revenue
benefit of higher base rates was largely offset by lower fuel
surcharges, and to a lesser extent, lower tonnage.
- Operating income of $37.4
million, more than double the $18.6
million in the previous-year first quarter. The higher
operating income was attributable to increased pricing and lower
operating expense. Operating income in the quarter improved despite
higher driver wages and benefits from the previously-announced
driver pay increases. These increased payroll costs exceeded the
benefit derived from lower weather-related expenses compared to the
2014 first quarter.
- Revenue per hundredweight, or yield, increased 3.6 percent
compared to the prior-year first quarter. Excluding fuel
surcharge, yield rose 8.6 percent.
- Tonnage per day decreased 1.4 percent compared to last year's
first quarter.
- Operating ratio of 95.6 compared to 97.8 in the first quarter
of the prior year.
"Con-way Freight delivered substantially improved results this
quarter, reflecting sustained progress with our revenue management
initiatives," said Douglas W.
Stotlar, Con-way's president and CEO. "While daily tonnage
declined slightly compared to last year's first quarter, we were
able to increase yield. Going forward, we remain focused on
initiatives to drive long-term profitable growth."
LOGISTICS
For the first quarter of 2015, Menlo Logistics reported:
- Revenue of $417.1 million, a 2.6
percent increase from $406.4 million
in the first quarter of the prior year. The increase was
attributable to growth in revenue for both warehouse management and
transportation management services.
- Net revenue of $190.2 million, a
4.2 percent increase from $182.5
million in the first quarter of the prior year. Warehouse
management services contributed the majority of the net revenue
increase.
- Operating income of $8.6 million,
a 39.6 percent increase from $6.2
million in the first quarter of the prior year. Strong cost
controls coupled with improved pricing were largely responsible for
the increased operating income.
"Menlo turned in a solid quarter with across-the-board increases
in revenues, net revenues and operating income," said Stotlar. "Our
emphasis remains on securing profitable new business and continuing
to improve operating performance with existing accounts."
TRUCKLOAD
For the first quarter of 2015, Con-way Truckload reported:
- Revenue of $138.7 million, an
11.1 percent decrease from $156.0
million in last year's first quarter. The revenue decline
was primarily due to lower fuel surcharge revenue. Excluding fuel
surcharge, revenue also was adversely affected by lower fleet
utilization due to fewer seated tractors, which reduced total
loaded miles, partially offset by higher revenue per loaded
mile.
- Operating income of $7.6 million,
an 18.5 percent increase from $6.4
million in the first quarter of the prior year. The higher
operating income was mostly attributable to lower expenses and
improved pricing.
- Empty miles were 10.1 percent, compared to 10.0 percent in the
first quarter of the prior year.
- Operating ratio, exclusive of fuel surcharges, of 93.6 compared
to 94.7 in the first quarter of the prior year.
"The tight driver market is limiting our ability to fully seat
our fleet. However, we were encouraged with early results from
innovative, new recruiting efforts to bring more drivers into our
company – and incent them to stay," commented Stotlar. "At the same
time, we improved our profit performance, which benefited from
lower fuel and other operating costs."
CORPORATE AND ELIMINATIONS
Corporate and Eliminations primarily consists of certain
corporate activities for which related income or expense was not
allocated to the reporting segments. These include the company's
defined benefit pension plans, reinsurance operations, corporate
properties and results from Con-way's trailer manufacturing unit.
These activities produced an operating loss of $1.6 million in the 2015 first quarter, compared
to operating income of $1.9 million
in the first quarter of the prior year.
INVESTOR CONFERENCE CALL
Con-way will host a conference call for the investment community
tomorrow, April 30, beginning at
8:30 a.m. Eastern Time. The call can
be accessed by dialing (877) 874-4749 or (706) 643-3632 (for
international callers). Please reference access code 20835188. The
call is expected to last approximately one hour, and will also be
available through a live Internet webcast at www.con-way.com, in
the Investors section.
An Internet replay and podcast of the presentation will also be
available at the Con-way web site.
About Con-way Inc. -- Con-way Inc. (NYSE:CNW) is a
$5.8 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 Logistics. 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 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, revenue, capital and software expenditures, weight,
yield, volumes, income or other financial or operating items, any
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 regarding the payment of future
dividends, any statements as to the adequacy of reserves, any
statements regarding the outcome of any legal, administrative and
other claims and proceedings that may be brought by or 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, enforcement of and changes in governmental
regulations or taxes that could impact the company, environmental,
tax and other matters, disruptions or volatility in capital
markets, including the effect on Con-way's ability to refinance
indebtedness as and when it becomes due, changes in fuel prices or
fuel surcharges, increasing competition for qualified drivers or
increases in driver compensation and benefits, cyber attacks, data
losses and security breaches or business interruption due to a
catastrophic event, labor matters, the possibility that Con-way
may, from time to time, be required to record impairment charges
for goodwill and other long-lived assets, 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, changes in liability for Con-way's self-retained insurance
claims, a significant loss of business from one of Menlo's major
customers, the creditworthiness of Con-way's customers and their
ability to pay for services rendered, and the possibility of
defaults under Con-way's revolving credit agreement and other debt
instruments. The factors included herein and in Item 1A of
Con-way's 2014 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. Any forward-looking statements speak as of April 29, 2015, and are subject to change.
Con-way does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as otherwise required by
law.
Con-way
Inc.
|
Consolidated
Statements of Income
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
(Dollars in
thousands, except per share data)
|
2015
|
|
2014
|
Revenue
|
|
|
|
Freight
|
$
|
855,612
|
|
$
|
848,027
|
Logistics
|
417,070
|
|
406,365
|
Truckload
|
138,725
|
|
156,010
|
Corporate and
Eliminations
|
(38,976)
|
|
(41,559)
|
|
$
|
1,372,431
|
|
$
|
1,368,843
|
Operating Income
(Loss)
|
|
|
|
Freight
|
$
|
37,376
|
|
$
|
18,565
|
Logistics
|
8,616
|
|
6,174
|
Truckload
|
7,561
|
|
6,380
|
Corporate and
Eliminations
|
(1,626)
|
|
1,943
|
|
51,927
|
|
33,062
|
Other Income
(Expense)
|
(15,532)
|
|
(13,840)
|
Income before Income
Tax Provision
|
36,395
|
|
19,222
|
Income Tax
Provision
|
14,603
|
|
6,329
|
Net Income
|
$
|
21,792
|
|
$
|
12,893
|
|
|
|
|
Weighted-Average
Common Shares Outstanding
|
|
|
|
Basic
|
57,634,382
|
|
56,957,433
|
Diluted
|
58,222,166
|
|
57,540,068
|
Earnings per Common
Share
|
|
|
|
Basic
|
$
|
0.38
|
|
$
|
0.23
|
Diluted
|
$
|
0.37
|
|
$
|
0.22
|
Con-way
Inc.
|
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial
Measures
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
(Dollars in
thousands, except per share data)
|
|
2015
|
|
2014
|
Net Income and
Earnings per Common Share:
|
|
|
|
|
Net Income
(GAAP)
|
|
$
21,792
|
|
$
12,893
|
Before-Tax
Reconciling Items
|
|
|
|
|
Defined benefit
pension income (expense) [a]
|
|
(1,122)
|
|
495
|
|
|
(1,122)
|
|
495
|
Tax-Related
Reconciling Items
|
|
|
|
|
Tax effect of items
above
|
|
430
|
|
(193)
|
Discrete and other
tax adjustments [b]
|
|
(227)
|
|
1,360
|
|
|
203
|
|
1,167
|
Net Income (Adjusted
Non-GAAP)
|
|
$
22,711
|
|
$
11,231
|
|
|
|
|
|
Diluted Shares
Outstanding
|
|
58,222,166
|
|
57,540,068
|
Earnings per Diluted
Common Share (Adjusted Non-GAAP)
|
|
$
0.39
|
|
$
0.20
|
|
|
|
|
|
Logistics' Net
Revenue:
|
|
|
|
|
Revenue
(GAAP)
|
|
$ 417,070
|
|
$ 406,365
|
Purchased
transportation expense
|
|
(226,915)
|
|
(223,875)
|
Net revenue (Adjusted
Non-GAAP)
|
|
$ 190,155
|
|
$ 182,490
|
|
|
|
|
|
|
|
[a]
|
Pension income
(expense) is excluded from net income to determine non-GAAP
results as the defined benefit pension plans are frozen and pension
income (expense) is predominately driven by long term discount
rates and, to a lesser degree, corporate decisions regarding future
funding and asset allocation. The related results are not relevant
to the ongoing operations of Con-way's businesses.
|
|
|
[b]
|
The "Discrete and
other tax adjustments" line quantifies the variance in the income
tax provision or benefit resulting from differences in the actual
effective tax rate for the period from the effective tax rate
forecasted at the beginning of the period.
|
|
Information About Non-GAAP Financial
Measures:
|
|
Con-way provides financial measures such as adjusted
net income, adjusted earnings per share and net revenue 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
management, 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
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
$ 1,293,402
|
|
$ 1,261,400
|
Property, plant and
equipment, net
|
|
1,646,417
|
|
1,654,211
|
Other
assets
|
|
422,153
|
|
420,007
|
Total
Assets
|
|
$ 3,361,972
|
|
$ 3,335,618
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities
|
|
$ 784,070
|
|
$ 742,120
|
Long-term debt and
capital leases
|
|
729,107
|
|
729,890
|
Other long-term
liabilities and deferred credits
|
|
656,506
|
|
667,770
|
Shareholders'
equity
|
|
1,192,289
|
|
1,195,838
|
Total Liabilities and
Shareholders' Equity
|
|
$ 3,361,972
|
|
$ 3,335,618
|
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SOURCE Con-way Inc.