-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SrS+dwLbFxJyY20uh0TQ5WfIjcaTwfrCbPbeaHBcr219nN9gFytcrhgvgiKGeTtj ra7k5ersFCNPOwZKex3PRQ== 0000023675-04-000027.txt : 20041025 0000023675-04-000027.hdr.sgml : 20041025 20041025161152 ACCESSION NUMBER: 0000023675-04-000027 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040930 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20041025 DATE AS OF CHANGE: 20041025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNF INC CENTRAL INDEX KEY: 0000023675 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 941444798 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05046 FILM NUMBER: 041094183 BUSINESS ADDRESS: STREET 1: 3240 HILLVIEW AVE CITY: PALO ALTO STATE: CA ZIP: 94304 BUSINESS PHONE: 6504942900 MAIL ADDRESS: STREET 1: 1717 NW 21ST AVE CITY: PORTLAND STATE: OR ZIP: 97209 FORMER COMPANY: FORMER CONFORMED NAME: CNF TRANSPORTATION INC DATE OF NAME CHANGE: 19970509 FORMER COMPANY: FORMER CONFORMED NAME: CONSOLIDATED FREIGHTWAYS INC DATE OF NAME CHANGE: 19920703 8-K 1 pr098k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 October 25, 2004 ------------------------------------------------ Date of Report (Date of earliest event reported) CNF Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-5046 94-1444798 ---------- ------ ---------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification incorporation or Number) organization) 3240 Hillview Avenue, Palo Alto, California 94304 --------------------------------------------------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (650) 494-2900 - ------------------------------------------------------------------------------ (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On October 25, 2004, CNF Inc. issued a press release announcing results of operations for the quarter ended September 30, 2004, which is being furnished to the U.S. Securities and Exchange Commission. A copy of the press release is attached hereto as Exhibit 99 and is incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CNF Inc. ------------ (Registrant) October 25, 2004 /s/Chutta Ratnathicam ----------------------- Chutta Ratnathicam Chief Financial Officer EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99 Earnings release issued on October 25, 2004. EX-99 2 er3q04.txt EXHIBIT 99 CNF 3240 HILLVIEW AVENUE, PALO ALTO, CA 94304-1297 (650) 494-2900 NEWS RELEASE Contacts: Investors-Patrick Fossenier (650) 813-5353 Media -- Nancy Colvert (650) 813-5336 (415) 215-5545 CNF INC. REPORTS 17 PERCENT INCREASE IN INCOME FROM CONTINUING OPERATIONS -- REVENUES UP 16 PERCENT PALO ALTO, Calif. - Oct. 25, 2004 -- CNF Inc. (NYSE:CNF) today reported third-quarter 2004 after-tax income from continuing operations of $39.8 million, 72 cents per diluted share (after preferred stock dividends), and after-tax income from discontinued operations of $4.4 million, 8 cents per diluted share. This compares with third-quarter 2003 after-tax income from continuing operations of $35.1 million, 64 cents per diluted share, and a net loss from discontinued operations of $10.3 million, 18 cents per diluted share. CNF reported a net loss to common shareholders for third-quarter 2004 of $216.2 million, or $3.90 per diluted share, compared with net income to common shareholders of $24.8 million, or 46 cents per diluted share, in the third quarter of 2003. The third-quarter 2004 net loss to common shareholders was primarily due to a $260.5 million after-tax impairment charge, $4.70 per diluted share, from the planned sale of Menlo Worldwide Forwarding. This number is subject to adjustment at closing. On Oct. 5, CNF announced an agreement to sell its Menlo Worldwide Forwarding unit to UPS for $150 million in cash and the assumption of $110 million of debt. The company expects the sale to close by the end of the year. Not included in the sale were Menlo Worldwide Logistics, Vector SCM, Con-Way Transportation Services and Road Systems. CNF is reporting the results of its Forwarding operations as discontinued operations in both 2003 and 2004. Income from continuing operations now includes CNF corporate expense previously allocated to the Menlo Worldwide Forwarding unit of $2.8 million, 3 cents per diluted share, in third-quarter 2004 and $3.1 million, 3 cents per diluted share, in third-quarter 2003. Total revenue for the third quarter of 2004 was $973.6 million, up 16 percent from $837.4 million in third-quarter 2003. Operating income from continuing operations was $78.4 million in third-quarter 2004, up 15 percent from $68.3 million in the same period of 2003. For the first nine months of 2004, the company reported after-tax income from continuing operations of $101.1 million, $1.83 per diluted share (after preferred stock dividends), and an after-tax net loss from discontinued operations of $257.4 million, $4.55 per diluted share. This compares with after-tax income from continuing operations of $77.7 million, $1.44 per diluted share, and an after-tax net loss from discontinued operations of $20.7 million, 36 cents per diluted share, for the same period of 2003. For the first nine months of 2004, CNF reported a net loss to common shareholders of $156.3 million, $2.72 per diluted share, compared with net income of $57.0 million, $1.08 per diluted share, for the first nine months of 2003. Total revenue for the first nine months of 2004 was $2.74 billion, up 15 percent from $2.40 billion in the same period of 2003. Operating income from continuing operations was $205.2 million in the first nine months of 2004, up 29 percent from $159.7 million in the same period of 2003. "The announced sale of Menlo Worldwide Forwarding to UPS obviously was a significant event for shareholders," said CNF Chairman and Chief Executive Officer W. Keith Kennedy. "Not to be overlooked is the solid performance of our continuing operations - Con-Way, Menlo Worldwide Logistics and Vector SCM. Con-Way in particular had strong results with 19 percent growth in revenue and a 31 percent increase in operating income." CNF's effective tax rate for continuing operations in the third quarters of 2003 and 2004 was 39 percent. Con-Way Transportation Services For the third quarter of 2004, Con-Way Transportation Services reported: - operating income of $70.6 million, up 31 percent from $53.9 million in the year-ago period. Operating income includes an additional allocation of CNF corporate expenses of $2.4 million in third-quarter 2004 and $2.7 million in third-quarter 2003, that was previously allocated to Menlo Worldwide Forwarding. - revenue of $684.8 million, up 19 percent from third-quarter 2003. - regional carrier tonnage per day was up 13.8 percent compared to the prior year quarter. - regional carrier yield increased 3.5 percent from the prior year quarter. - the regional carrier group achieved an operating ratio of 88.4, excluding the additional corporate expense, compared to 89.1 in third-quarter 2003. Menlo Worldwide For the third quarter of 2004, Menlo Worldwide reported: - operating income of $8.5 million compared with $15.3 million in third-quarter 2003. For the third quarter of 2004, Menlo Worldwide Logistics reported: - operating income of $5.8 million compared to $6.5 million in third-quarter 2003. Operating income includes an additional allocation of CNF corporate expenses of $400,000 in the third quarters of 2004 and 2003 that was previously allocated to Menlo Worldwide Forwarding. - revenue of $286.8 million, up 9 percent from third-quarter 2003. Menlo Worldwide Other, which consists of the results of Vector SCM, reported operating income of $2.7 million compared with $8.8 million in third-quarter 2003. The 2003 quarter included $3.5 million of additional revenue and operating income due to contract amendments. Other CNF's "other" operations, which include the results of Road Systems and corporate activities, reported an operating loss of $635,000 in the third quarter of 2004. Fourth-Quarter Outlook Fourth-quarter diluted earnings per share from continuing operations are expected to be between 62 cents and 72 cents including approximately 4 cents of corporate expense previously allocated to Menlo Worldwide Forwarding. Discontinued operations are expected to show a per share profit in the low single digits subject to the timing of the closing of the sale. CNF's tax rate is expected to be 39 percent in the fourth quarter. 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 and objectives of management for future operations, any statements regarding contributions to pension plans, any statements as to the adequacy of reserves, any statements regarding the possible outcome of claims brought against CNF, any statements regarding future economic conditions or performance, 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, the creditworthiness of CNF's customers and their ability to pay for services rendered, increasing competition and pricing pressure, changes in fuel prices, the effects of the cessation of the air carrier operations of Emery Worldwide Airlines, the possibility of additional unusual charges and other costs and expenses related to Menlo Worldwide's forwarding operations, the possibility that CNF may, from time to time, be required to record impairment charges for goodwill and other long-lived assets, the possibility of defaults under CNF's $385 million credit agreement and other debt instruments (including defaults resulting from additional unusual charges), and the possibility that CNF may be required to repay certain indebtedness in the event that the ratings assigned to its long-term senior debt by credit rating agencies are reduced, labor matters, enforcement of and changes in governmental regulations, environmental and tax matters, the February 2000 crash of an EWA aircraft and related litigation, matters relating to CNF's 1996 spin-off of Consolidated Freightways Corporation (CFC), including the possibility that CFC's multi-employer pension plans may assert claims against CNF, matters relating to CNF's defined benefit pension plans, and matters related to the pending sale of Menlo Worldwide Forwarding. The factors included herein and in Item 7 of CNF's 2003 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. Conference Call CNF will host a conference call for shareholders and the investing community to discuss third-quarter results at 12:00 p.m. Eastern Daylight Time (9:00 a.m. Pacific) today, October 25. The call can be accessed by dialing (800)700-7860 or (612) 332-0530 (for international callers only) and is expected to last approximately one hour. Callers are requested to dial in at least five minutes before the start of the call. The call will also be available through a live web cast at www.streetevents.com and in the investor relations section of the CNF web site at www.cnf.com. An audio replay will be available for 48 hours following the call at (800) 475-6701, or (320) 365-3844 (for international callers only) using access code 744533. The replay will also be available at the same webcasting sites providing access to the live call. Investors may obtain additional operating data from CNF's Consolidated Financial Summaries, which will be posted on the investor relations section of the CNF web site at www.cnf.com later today. CNF (NYSE:CNF) is a $5.1 billion management company of global supply chain services with businesses in regional trucking, air freight, ocean freight, customs brokerage, global logistics management and trailer manufacturing. ### CNF INC. STATEMENTS OF CONSOLIDATED INCOME (Dollars in thousands except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------ 2004 2003 2004 2003 ----------- ----------- ---------- ----------- REVENUES $973,619 $837,361 $2,744,921 $2,396,520 Costs and Expenses Operating expenses 779,984 657,379 2,196,724 1,909,648 Selling, general and administrative expenses 88,751 86,113 266,084 250,979 Depreciation 26,449 25,558 76,951 76,240 ----------- ----------- ----------- ----------- 895,184 769,050 2,539,759 2,236,867 ----------- ----------- ----------- ----------- OPERATING INCOME 78,435 68,311 205,162 159,653 Other expense, net (9,723) (7,432) (29,460) (22,184) ----------- ----------- ----------- ----------- Income before Taxes 68,712 60,879 175,702 137,469 Income Tax Provision 26,798 23,743 68,524 53,613 ----------- ----------- ----------- ----------- Income from Continuing Operations 41,914 37,136 107,178 83,856 ----------- ----------- ----------- ----------- Loss from Discontinuance, net of tax (260,490) - (260,490) - Income (Loss) from Discontinued Operations, net of tax 4,444 (10,315) 3,114 (20,711) ----------- ----------- ----------- ----------- (256,046) (10,315) (257,376) (20,711) Net Income (Loss) (214,132) 26,821 (150,198) 63,145 Preferred Stock Dividends 2,075 2,030 6,119 6,125 ----------- ----------- ----------- ----------- NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS $(216,207) $24,791 $(156,317) $57,020 =========== =========== =========== =========== Weighted-Average Common Shares Outstanding Basic 50,670,398 49,549,338 50,150,987 49,480,305 Diluted [a] 55,408,636 56,641,421 56,527,092 56,634,040 Earnings Per Common Share Basic Net income from continuing operations $0.79 $0.71 $2.02 $1.57 Loss from discontinuance, net of tax (5.15) - (5.20) - Income (Loss) from Discontinued Operations 0.09 (0.21) 0.06 (0.42) ----------- ----------- ----------- ----------- $(4.27) $0.50 $(3.12) $1.15 =========== =========== =========== =========== Diluted [a] Net income from continuing operations $0.72 $0.64 $1.83 $1.44 Loss from discontinuance, net of tax (4.70) - (4.61) - Income (Loss) from Discontinued Operations 0.08 (0.18) 0.06 (0.36) ----------- ----------- ----------- ----------- $(3.90) $0.46 $(2.72) $1.08 =========== =========== =========== =========== OPERATING SEGMENTS REVENUES Con-Way Transportation Services $684,775 $574,608 $1,936,224 $1,635,183 Menlo Worldwide Logistics 286,847 262,663 805,494 761,212 CNF Other 1,997 90 3,203 125 ----------- ----------- ----------- ----------- $973,619 $837,361 $2,744,921 $2,396,520 =========== =========== =========== =========== OPERATING INCOME (LOSS) Con-Way Transportation Services $70,607 $53,909 $181,702 $129,213 Menlo Worldwide Logistics 5,764 6,477 17,794 18,004 Other 2,699 8,810 8,079 15,358 ----------- ----------- ----------- ----------- 8,463 15,287 25,873 33,362 ----------- ----------- ----------- ----------- CNF Other (635) (885) (2,413) (2,922) ----------- ----------- ----------- ----------- $78,435 $68,311 $205,162 $159,653 =========== =========== =========== =========== [a] The three months ended September 30, 2004 include the dilutive effect of stock options and Series B preferred stock. All other periods presented include the dilutive effect of stock options, Series B preferred stock, and convertible subordinated debentures, which were redeemed on June 1, 2004. CNF INC. CONDENSED BALANCE SHEETS (Dollars in thousands) September 30, December 31, 2004 2003 ------------------ ------------------ ASSETS Current assets $1,218,040 $850,846 Current assets of discontinued operations 528,935 478,388 Property, plant and equipment, net 854,516 817,951 Other assets 100,058 176,854 Non-current assets of discontinued operations 169,198 442,234 ------------------ ------------------ Total Assets $2,870,747 $2,766,273 ================== ================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $708,466 $513,266 Current liabilities of discontinued operations 322,108 308,884 Long-term debt and guarantees 602,520 554,981 Other long-term liabilities and deferred credits 341,089 365,112 Long-term liabilities of discontinued operations 198,077 205,222 Shareholders' equity 698,487 818,808 ------------------ ------------------ Total Liabilities and Shareholders' Equity $2,870,747 $2,766,273 ================== ================== -----END PRIVACY-ENHANCED MESSAGE-----