Con-way Inc. on Thursday, Feb. 4, reported a net loss applicable to common shareholders for the fourth quarter of 2009 of $1.9 million compared to a fourth-quarter 2008 net loss of $43.0 million. The net loss for 2009 included expenses related to an administrative outsourcing initiative, while last year’s fourth quarter included operational restructuring costs at Con-way Freight, impairment and acquisition related charges at Menlo Worldwide Logistics and a net gain from discontinued operations. Revenue of $1.12 billion was essentially even with last year’s fourth quarter.
Operating income was $17.3 million compared to an operating loss of $35.2 million, 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, 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.
For the full year, Con-way reported a net loss of $110.9 million compared to full-year 2008 net income of $67.0 million. Results for full-year 2009 included the earlier mentioned administrative outsourcing expenses, a first-quarter goodwill impairment charge at Con-way Truckload and a third-quarter charge for a change in Con-way Freight’s accounting estimate for revenue adjustments. The 2008 full-year period included the impairment and acquisition related charges noted previously, two operational restructuring charges at Con-way Freight and a gain from discontinued operations. Revenues declined to $4.27 billion from $5.04 billion, primarily reflecting the effect of weak pricing driven by surplus trucking industry capacity.
The operating loss of $25.9 million compares to operating income of $192.6 million, with both periods affected by the special items described above. Excluding these special items, declines in operating income at Con-way Freight and Con-way Truckload were offset partially by improved operating income at Menlo Worldwide Logistics. Income tax expense of $17.5 million was recognized on $90.3 million of loss before taxes, and in 2008, income tax expense of $69.5 million was reported on $134.9 million of income before taxes. Both periods primarily reflect no tax deduction on impairment charges and the effect of discrete items.
“Excess capacity remains a problem for the LTL and truckload markets, which continues to suppress profit recovery,” said Douglas W. Stotlar, president and chief executive officer of San Mateo, Calif.-based Con-way. “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:
