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CNF Inc. Income Climbs 42% in First Quarter

April 24, 2005

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CNF Inc. (NYSE:CNF), Palo Alto, Calif., reported first-quarter 2005 after-tax income from continuing operations of $38.9 million (after preferred stock dividends), or 69 cents per diluted share, up 42 percent.
This compares with first-quarter 2004 after-tax income from continuing operations of $27.4 million, or 50 cents per diluted share.
Operating income in the first quarter was $73.3 million, up 32 percent from $55.4 million in the same quarter a year ago. Revenue for the first quarter of 2005 was $947.7 million, up 12 percent from $846.9 million in first-quarter 2004.
Net income in the first quarter for common shareholders was $29.1 million, or 52 cents per diluted share, up 19 percent. This compares with net income for common stock shareholders of $24.4 million, or 45 cents per diluted share in the first quarter a year ago.
Net income for common shareholders included a $9.8 million loss (17 cents per diluted share) from the discontinued operations of Menlo Worldwide Forwarding (MWF) which was sold in December 2004. The sale is recognized as discontinued operations and prior periods have been restated. Charges from the disposition of MWF to date total $286 million, which includes the $9.8 million in the first quarter of 2005.
Commenting on the quarterly results and operations for CNF’s transportation services, W. Keith Kennedy, CNF chairman and interim chief executive officer, said, "Con-Way increased earnings by more than 30 percent, primarily from less-than-truckload growth across all regions of North America. Productivity, cost controls and customer service all excelled in the quarter for Con-Way.” He added, “Our logistics services provider, Menlo Worldwide, also had a good quarter with earnings up almost 15 percent."
The company said it had repurchased $32 million in company stock in the first quarter as part of a previously announced $300 million stock repurchase program to occur over the next two years. The company said it expects to repurchase approximately $40 million in shares in the second quarter of 2005.
For the first quarter of 2005, CNF’s Con-Way Transportation Services reported operating income of $62.9 million, up 31 percent from $47.9 million in the year-ago period. Revenue was $659.4 million, an increase of 11 percent from last year's first-quarter revenue of $593.9 million. Regional carrier yield increased 5 percent from the prior-year quarter; the regional carrier group achieved an improved operating ratio of 89.5 percent compared to 91 percent in the first quarter of 2004.
CNF's Menlo Worldwide operations include the results for Menlo Logistics
and Vector SCM. For the first quarter of 2005, Menlo Worldwide reported total segment operating income of $9.7 million, up 15 percent, compared with $8.4 million in the first quarter of 2004. Menlo Logistics' revenue of $282.9 million was up 12 percent from the prior-year quarter of $252.8 million.
Operating income for Menlo Logistics was $5.7 million in the first quarter, down 6 percent from $6.0 million in the first quarter of 2004. Operating income at Vector SCM was $4.0 million in the first quarter, up 69 percent from $2.4 million in the prior-year quarter.
CNF's other operations, which include the results of Road Systems trailer manufacturing and corporate activities, reported an operating profit of $635,000 compared to a loss of $852,000 in the first quarter of 2004.
The effective tax rate in the first quarter of 2005 was 38 percent, compared to 39 percent in the first quarter of 2004.
According to a company statement, second-quarter 2005 diluted earnings per share from continuing operations are expected to be between 92 cents and $1.00. This compares with 61 cents per diluted share earned from continuing operations in the second quarter of 2004. CNF's tax rate is expected to be 39 percent in the second quarter.
CNF is a $3.7 billion management company of supply chain service providers. It has businesses in less-than-truckload motor carriage, truckload carriage, air freight, logistics and supply chain management and trailer manufacturing.
For more information, go to www.cnf.com.


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