Thursday, February 5, 2015

US Trucking and Logistics Group Turns in Full Year Figures

Outlook Generally Favourable After Strong Q4 Results
Shipping News Feature

US – The Con-way Group, which includes both freight trucking subsidiaries and logistics company Menlo, has published Q4 and full 2014 accounts which show demonstrably higher returns than the previous year. Higher rates and margins, lower fuel costs, increased management services and lower state taxes all contributed to the increase whilst adverse effects came in the form of lower truckload tonnages and ‘Corporate and Eliminations’ including the company's trailer manufacturing unit as well as other corporate activities. These activities produced an operating loss of $13.2 million in 2014 Q4 compared to an operating loss of $2 million in Q4 of 2013.

The results in 2014 include the previously disclosed $16 million charge for termination of a legacy pension plan at the former Emery Worldwide business. Overall 2014 Q4 net income was $24.9 million, or 43 cents per diluted share. The results compare to Q4 2013 net income of $11.7 million, or 20 cents per diluted share.

Operating income in Q4 was $41.3 million, a 23.8% increase from the $33.4 million earned in Q4 a year ago. Revenue for Q4 was $1.44 billion, up 6.1% compared to $1.36 billion in the previous-year period. Other income and expenses in 2014 Q4 included $5.1 million of foreign-exchange losses, which compares to a small gain from foreign-currency holdings in last year's fourth quarter. These exchange-rate impacts relate predominantly to international activities at Menlo Logistics.

For the full-year 2014, Con-way reported net income of $137 million, or $2.36 per diluted share, compared to full-year 2013 net income of $99.2 million, or $1.73 per diluted share. Operating income of $268.5 million in 2014 increased 28.5% from the $209 million earned in 2013. Revenue for the full-year 2014 was $5.81 billion, a 6.1% increase from $5.47 billion in 2013.

Divisional figures were as follows:

In logistics for Q4 of 2014, Menlo Logistics reported revenue of $433.8 million, up 9.2% from the prior-year fourth-quarter revenue of $397.1 million. The higher revenue was primarily attributable to growth in transportation-management services, and to a lesser extent, increased warehouse-management services.

Con-way Truckload reported revenue of $152.3 million, a 2.3% decrease compared to last year's fourth-quarter revenue of $155.8 million. The decline in revenue reflected the effect of lower total loaded miles due to fewer seated tractors and lower fuel surcharge revenue, partially offset by higher revenue per mile.

Con-way Freight, the less than truckload haulage section, reported revenue of $897.2 million, a 5.9% increase over last year's fourth-quarter revenue of $847 million. Revenue in the quarter benefited primarily from improved yield. Revenue per hundredweight, or yield, increased 6.1% from the previous-year fourth quarter. Excluding the fuel surcharge, yield rose 7.3% whilst tonnage per day increased 1.4% compared to the 2013 fourth quarter and operating ratio of 95.9 in the 2014 Q4 improved from 97.2 in the previous-year period. Douglas W. Stotlar, Con-way's President and CEO commented:

"Menlo achieved higher operating income in the Q4 as it continued to effectively manage its costs while improving account profitability and service. Following the award and start-up of several unusually large new warehouse projects last year, Menlo's new business inflows have trended back to historical levels. As a result, our logistics company was able to improve operating efficiency and several key customer performance metrics.

"Due to strong demand and increased pricing, coupled with declining costs for diesel fuel and other operating expenses, Con-way Truckload delivered a double-digit improvement in operating income for the fourth quarter. The slight decline in revenue was primarily attributable to the industry-wide driver shortage, which continued to impact our ability to seat tractors with qualified drivers. While recruiting and retaining qualified drivers remains a challenge, our improved driver pay package enabled progress in the fourth quarter.

“Con-way Freight achieved growth in revenue and significantly higher operating income compared to last year on the strength of its ongoing revenue management efforts bolstered by a stable demand and pricing environment. The increase in operating income was constrained to some degree by higher expense for workers' compensation, fleet maintenance and professional services."