Wednesday, May 1, 2013


ANN ARBOR, Mich. —May 1, 2013—Con-way Inc. (NYSE:CNW) today reported 2013 first-quarter net income of $14.0 million, or 25 cents per diluted share. The results compare to first-quarter 2012 net income of $25.6 million, or 46 cents per diluted share.

On a non-GAAP basis, earnings per diluted share were 19 cents in the 2013 first quarter compared to 45 cents in last year’s first quarter.  (Non-GAAP items, consisting of tax-related adjustments for both years, are detailed in the attached reconciliation.)

Operating income in the first quarter was $31.6 million compared to $55.7 million earned in the first quarter a year ago.  Revenue for the first quarter was $1.34 billion compared to $1.37 billion a year ago.

Commenting on the quarter’s results, Douglas W. Stotlar, Con-way’s president and CEO, said, “On a consolidated basis, our first quarter 2013 results were below our expectations and therefore were disappointing. However, the first quarter also provided further validation that our efforts to expand margins are gaining traction and moving in the right direction.”

“At Con-way Freight, several cost items, most of which were short-term or infrequent in nature, impacted first quarter operating income,” Stotlar noted.“We have made encouraging progress on the key initiatives of lane-based pricing and line-haul efficiency, both of which are foundational to our three-year plan.  As these initiatives ramp up during 2013, we continue to expect improved financial performance, particularly in the second half of the year.”

In the first quarter, Menlo Worldwide Logistics posted slightly higher net revenues, but saw operating income decline. “Menlo is predominantly a contract-driven business with a relatively long sales cycle.  As such, there can be variability in their financial results,” Stotlar stated.  “However, new-business wins during 2013 are significantly improved, which positions Menlo well for revenue growth as these contracts are implemented.”

Con-way Truckload’s first quarter revenue was essentially flat with 2012, while operating income was down slightly. “Adverse weather and fewer working days affected load count and efficiency,” Stotlar said. “The rate environment remains stable and we look for Con-way Truckload to benefit from low driver turnover and consistent operational execution,” he concluded.

Con-way’s first-quarter effective tax rate was 16.5 percent, compared to 38.1 percent for the same period in 2012. Both years included discrete tax adjustments that impacted the effective tax rate (presented in the attached reconciliation). In the first quarter of 2013, Con-way recognized $3.4 million of discrete tax benefits, consisting mainly of the effect of the 2012 alternative-fuel credit, which was extended by legislation enacted in early 2013.

Segment results in the first quarter for Con-way’s principal operations were as follows:

For the first quarter of 2013, Con-way Freight reported:
• Revenue of $827.5 million, a decline from last year’s first quarter revenue of $831.0 million.  The quarter had 1 fewer workdays and lower average daily tonnage, mostly offset by improved yield.
• Operating income of $16.0 million, a decline from the $34.5 million earned in the year-ago period.  The decline in operating income resulted primarily from increased operating expenses, including several items previously announced on March 19, which totaled approximately $14 million.  Specifically, these items included a reserve for a large vehicular claim, a charge related to a transition to new technology, costs associated with adverse weather, and field training expenses pertaining to line-haul efficiency initiatives.  
• Revenue per hundredweight, or yield, increased 3.7 percent from the previous-year first quarter.  Excluding fuel surcharge, yield rose 3.4 percent.
• Tonnage per day declined 1.3 percent compared to the 2012 first quarter.
• Operating ratio of 98.1 in the 2013 first quarter compared to 95.8 in the previous-year period.
For the first quarter of 2013, Menlo Worldwide Logistics reported:
• Revenue of $392.4 million, down 6.4 percent from the prior year first quarter revenue of $419.1 million.  Lower revenue primarily reflects declines in transportation management services.
• Net revenue of $157.2 million, a 0.9 percent increase from $155.7 million in the previous year first quarter.
• Operating income of $6.5 million, compared to last year’s first quarter operating income of $12.3 million.  Operating income was affected by startup expenses resulting from expanded business with a large global customer, termination of certain customer contracts and increased expense for IT-related projects.

For the first quarter of 2013, Con-way Truckload reported:
• Revenue of $157.0 million, compared to last year’s first-quarter revenue of $157.3 million. Revenue per loaded mile, excluding fuel surcharge, was up 3.3 percent from the first quarter of 2012, offsetting the effect of lower business levels from adverse weather and one less working day.
• Operating income of $10.0 million was also affected by adverse weather, fewer working days and higher maintenance expense.  This compares to $10.6 million in the previous-year period.
• Loaded miles declined 3.1 percent compared to last year’s first quarter.
• Empty miles of 9.7 percent, compared to 9.3 percent in the previous-year first quarter.
• Operating ratio exclusive of fuel surcharges of 91.8, compared to 91.3 in the first quarter of 2012.

Corporate and Eliminations includes the company’s Road Systems, Inc. trailer manufacturing unit, as well as other corporate activities.  These activities produced operating losses of $0.9 million in the first quarter of 2013, and $1.7 million in the first quarter of 2012.  2013 results include $1.1 million of defined benefit pension costs

About Con-way Inc. -- Con-way Inc.

(NYSE:CNW) is a $5.6 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 Worldwide 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 Road Systems Inc., 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