Con-way Inc. on Tuesday, Oct. 23, reported net income available to common shareholders for the third quarter of 2007 of $37.3 million. The results compared with third-quarter 2006 net income available to common shareholders of $63.0 million.
Earnings for the 2007 third quarter were affected by restructuring costs related to acquisition and business transformation initiatives conducted in the quarter, which totaled $7.0 million. Results for the 2006 third quarter included a gain from the sale of a subsidiary of $6.2 million, and the effect of discrete tax items which reduced the tax provision in the quarter by $2.9 million.
Revenue was $1.11 billion, an increase of 3.2 percent from last year’s third-quarter revenue of $1.08 billion. Operating income in the 2007 third quarter was $67.7 million, down 33.8 percent from $102.3 million earned in the third quarter a year ago.
Commenting on the results, Con-way President and Chief Executive Officer Douglas W. Stotlar noted that soft customer shipping volumes continued to be a challenge for the highly competitive less-than-truckload market, where Con-way Freight recorded a modest increase in tonnage for the quarter.
“While we are encouraged with customer response to Con-way Freight’s growth initiatives, the market continues to be very price-sensitive,” Stotlar said. “Tonnage per day had a respectable gain over last year’s third quarter. However, yields remain under pressure, a market dynamic that we expect will continue to dampen profit growth in LTL freight through the remainder of the year.”
The quarter saw Menlo Worldwide complete the acquisition of Singapore-based Cougar Holdings, increasing its market share and footprint in South Asia and Singapore as well as extending it into new vertical markets. “In addition to successfully executing on its acquisition strategy, Menlo made excellent progress in the quarter toward its business goals, improving operational metrics and securing major new project wins,” Stotlar said. “Our logistics unit is on track to achieve double-digit growth in net revenues and margins for the year.”
On Oct. 17, Menlo Worldwide also completed its previously announced acquisition of Chic Holdings of Shanghai, China, which extends the company into China’s domestic transportation and logistics management market.
“These international acquisitions, combined with our earlier-concluded purchase of Contract Freighters Inc., have transformed our capabilities for truckload services in North America as well as for logistics solutions in the Asia Pacific,” Stotlar said. “These become excellent platforms for growth that present substantial opportunities to bring increasing value to our customers and shareholders.”
Con-way, based in San Mateo, Calif. also announced that for the 17th consecutive year, its employees are turning out in force to bring messages about the dangers of drugs to U.S. schoolchildren and encourage drug-free living. Their efforts are part of the National Family Partnership and U.S. Department of Defense’s annual Red Ribbon Week, a national drug abuse prevention campaign created in honor of slain Drug Enforcement Administration (DEA) agent Enrique “Kiki” Camarena.
As part of the program, employees “adopt” schools where they distribute red ribbons, make presentations about the dangers of drugs and ask students to pledge to stay drug-free. This week, more than 300 Con-way employees are distributing nearly one million red ribbons at more than 1,000 schools across the country from Maine to California. Scheduled activities during the visits include anti-drug speeches, parades and pep rallies.
Con-way has supported Red Ribbon Week since 1990. Each adopted school will also display a poster featuring three-time NASCAR Craftsman Truck Series champion Jack Sprague and his daughter, Paige. Sprague drives the No. 60 Con-way Freight Toyota for Wyler Racing in the yearlong racing series.
The Red Ribbon Campaign was started posthumously in Camarena’s home state of California in 1985. The oldest and largest drug prevention program in the nation, reaching millions of young people every year, it drew nationwide recognition in 1988 when President Reagan and First Lady Nancy Reagan served as honorary chairpersons. More than 80 million people a year show their commitment to living drug-free lives by wearing the Red Ribbon.