Con-way Inc., a freight transportation and logistics services company, has reported a net loss applicable to common shareholders of $110.9 million for the full-year 2009, or $2.33 per share. This compares to full-year 2008 net income to common shareholders of $67.0 million, or $1.40 per diluted share.
Revenues for the full-year 2009 declined to $4.27 billion from $5.04 billion in 2008, primarily reflecting the effect of weak pricing driven by surplus trucking industry capacity. The operating loss of $25.9 million for 2009 compares to operating income in 2008 of $192.6 million. Declines in operating income at Con-way Freight and Con-way Truckload were partially offset by improved operating income at Menlo Worldwide Logistics.
The company reported a net loss applicable to common shareholders for the fourth quarter of 2009 of $1.9 million, or 4 cents per share. The results compare to a fourth quarter 2008 net loss to common shareholders of $43.0 million, or 94 cents per share.
The net loss to common shareholders in the fourth quarter of 2009 included expenses related to an administrative outsourcing initiative (4 cents per share) while last year’s fourth quarter included operational restructuring costs at Con-way Freight (28 cents per diluted share), impairment and acquisition related charges at Menlo Worldwide Logistics (91 cents per diluted share), and a net gain from discontinued operations (15 cents per diluted share).
Revenue for the 2009 fourth quarter of $1.12 billion was essentially even with last year’s fourth quarter. Operating income in the 2009 fourth quarter was $17.3 million compared to an operating loss of $35.2 million in the fourth quarter a year ago, primarily reflecting the prior year operating losses associated with the special items described above. Excluding these special items, declines in operating income at Con-way Freight and Con-way Truckload were partially offset by improved operating income at Menlo Worldwide Logistics.
In the fourth quarter of 2009, income tax expense of $3.1 million was recognized on $1.1 million of income before taxes, reflecting changes in numerous permanent tax items. In the fourth quarter of 2008, an income tax benefit of $1.6 million was reported on $49.6 million of loss before taxes, primarily reflecting no tax deduction on the impairment and acquisition-related charges and the effect of discrete items.
Commenting on the results, Douglas Stotlar, Con-way’s president and CEO, says, “Excess capacity remains a problem for the LTL and truckload markets which continues to suppress profit recovery. It will be incumbent upon us to maintain strong liquidity and vigilant cost control while we invest prudently for the strategic needs of our business and customers going forward.”
Con-way Freight, the company’s less-than-truckload operation, saw pricing stabilize somewhat in the fourth quarter, albeit at a lower level. “While yields were down compared to last year, our increased tonnage levels have enabled better utilization of rolling stock capacity,” Stotlar notes. “With the LTL market’s persistent over-supply, opportunities to improve margin will be difficult.” Stotlar adds that Con-way Freight will continue to refine its network to drive cost savings and service improvements.
Menlo Worldwide Logistics culminated the year with a solid fourth quarter performance, growing both new and existing customer business in 2009.
Con-way Truckload’s expansion into regional operations is showing good early returns, Stotlar reports. “We continue to see capacity being rationalized in the truckload industry. Early bid activity in January shows prices firming and demand strengthening. Those are encouraging signals that a recovery is beginning to take hold in this market segment.”