Special charges related to Con-way Freight and a Chinese acquisition caused Con-Way Inc. to report a net loss for the fourth quarter of $49.7 million, compared to net income of $36.9 million a year earlier.


Without special charges, which affected both the 2008 and 2007 fourth quarters, on a non-GAAP basis, Con-way net income was $4.5 million, compared to 2007 fourth-quarter earnings of $41.8 million.

Special charges for 2008 included $21.3 million for restructuring charges from network re-engineering and workforce reduction at Con-way Freight, $37.8 million for an impairment charge related to goodwill and other intangible assets at Menlo Worldwide Logistics' China-based entity, Chic Holdings, Ltd.; $4.9 million for the write-down of a receivable related to the acquisition of Chic. Net income for both periods also included the effect of discontinued operations

Revenue in the 2008 fourth quarter was $1.13 billion, a decrease of 6.2 percent from last year's fourth-quarter revenue of $1.20 billion. The operating loss of $35.2 million in the 2008 fourth quarter compared to operating income of $70 million in the fourth quarter a year ago.

For the full year 2008, Con-way reported net income of $58.6 million, compared with $146.8 million in 2007. Both years included the effect of special charges.

Excluding special charges in both years, on a non-GAAP basis, full-year 2008 net income was $116 million, compared to $155.2 million earned in 2007.

Revenues for full-year 2008 rose to $5.04 billion from 2007's revenues of $4.39 billion, a 14.8 percent increase. Operating income in 2008 was $192.6 million compared with $264.5 million in 2007.

"As we noted in our update last month, the deteriorating economy in the fourth quarter foreshadowed an extraordinary decline in demand for freight services," said Con-way President and CEO Douglas W. Stotlar. "As this decline accelerated through November and December, our freight business volumes fell at an unprecedented rate, with a corresponding effect on earnings."

Stotlar noted that the company has taken a number of steps to reduce costs and conserve cash, including workforce reductions, aggressive expense controls, lower capital expenditures and a freeze on pay levels for management and administrative employees for 2009. "These were difficult decisions, necessary to align our costs for the current environment, and to help position us to weather what looks to be an extremely tough recessionary economy."