Con-way Inc. reported 2013 fourth-quarter net income of $11.7 million, or 20 cents per diluted share, which was in line with the company’s fourth quarter update previously issued in mid-January. The results compare to fourth-quarter 2012 net income of $11.8 million, or 21 cents per diluted share. On a non-GAAP basis, earnings per diluted share were 23 cents in the 2013 fourth quarter compared to 26 cents in last year’s fourth quarter. (Non-GAAP items, consisting solely of tax-related adjustments, are detailed in the attached reconciliation.) Operating income in the fourth quarter was $33.4 million compared to $37.8 million earned in the fourth quarter a year ago. Revenue for the fourth quarter was $1.36 billion, unchanged from last year’s fourth quarter. Con-way’s fourth-quarter effective tax rate was 45.3 percent, compared to 50.2 percent for the same period in 2012. The fourth-quarter tax provision in both years included increased state and foreign income taxes. Both years also included discrete tax adjustments. Excluding these items (see the attached reconciliation) the fourth-quarter effective tax rate would have been 38.9 percent in 2013 compared to 38.7 percent in 2012. Commenting on the company’s results, Douglas W. Stotlar, Con-way’s president and CEO, said “As reported earlier, Con-way Freight and Menlo Worldwide Logistics dealt with a number of issues in the fourth quarter, which negatively affected the period’s operating results and were mostly specific to the quarter,” Stotlar explained. “These results were not indicative of the overall progress made in 2013 to position our company for long-term success, notably at Con-way Freight and Menlo Logistics,” he continued. “At our less-than-truckload company, we deployed foundational capabilities including lane-based pricing, line-haul optimization tools, and the broader roll out of Lean methodologies. Our logistics company invested in its sales and solution capabilities, facilitating its expansion into new industries. Looking ahead, while severe winter weather has disrupted the start to the year, we expect our progress to continue and our results to improve in 2014.” Full-Year 2013 Results For the full-year 2013, Con-way reported net income of $99.2 million, or $1.73 per diluted share, compared to full-year 2012 net income of $104.5 million, or $1.85 per diluted share. On a non-GAAP basis, full-year earnings per diluted share were $1.66 in 2013 compared to $1.80 in 2012 (see attached reconciliation). Operating income of $209.0 million in 2013 declined from the $228.8 million earned in 2012. Revenue for the full-year 2013 was $5.47 billion compared to $5.58 billion in 2012. The full-year effective tax rate was 35.8 percent in 2013, compared to 38.8 percent in 2012. Both years included tax adjustments (see the attached reconciliation). Excluding the adjustments, the effective tax rate would have been 37.5 percent in 2013 and 39.0 percent in 2012. Segment results in the fourth quarter for Con-way’s principal operations were as follows: Freight For the fourth quarter of 2013, Con-way Freight, the company’s less-than-truckload (LTL) operation, reported: • Revenue of $847.0 million, a 2.7 percent increase over last year’s fourth-quarter revenue of $824.7 million. The revenue growth was primarily attributable to higher tonnage levels and improved yield. • Operating income of $23.8 million, a 10.5 percent increase over the $21.5 million earned in the year-ago period. The higher operating income resulted primarily from revenue growth, partially offset by higher expenses for employee benefits and cargo claims, and lower operating efficiencies from adverse weather, particularly in December. • Tonnage per day increased 1.0 percent compared to the 2012 fourth quarter. Tonnage growth was somewhat muted by adverse weather, as the difficult conditions dampened customer shipping volumes in December. • Revenue per hundredweight, or yield, increased 0.9 percent from the previous-year fourth quarter. Excluding the fuel surcharge, yield rose 1.5 percent. • Operating ratio of 97.2 in the 2013 fourth quarter compared to 97.4 in the previous-year period. “As previously noted, we completed the rollout of several transformative projects designed to improve revenue management and operating efficiencies at Con-way Freight,” Stotlar said. “We expect these foundational initiatives to contribute to improved results in 2014.” Logistics For the fourth quarter of 2013, Menlo Worldwide Logistics, the company’s global logistics and supply chain management operation, reported: • Revenue of $397.1 million, down 7.9 percent from the prior-year fourth-quarter revenue of $431.2 million. Lower revenue primarily reflected a decline in transportation-management services partially offset by an increase in warehouse-management services. • Net revenue of $190.6 million, a 17.8 percent increase from $161.8 million in the prior-year fourth quarter driven by the growth in warehouse-management services. • Operating income of $2.7 million, compared to last year’s fourth-quarter operating income of $8.6 million. The lower operating income primarily reflected losses from two new warehouse accounts and a bad-debt write-off from a customer bankruptcy. With respect to the new warehousing accounts, Menlo incurred higher-than-anticipated operating expense, mostly due to business volumes that fell well below customer projections, particularly in December. “The operating issues which led to the losses at the warehousing accounts have been substantially addressed,” Stotlar said. “With last year’s surge in start-up expenses largely behind us, we expect Menlo to deliver improved results in 2014.” Truckload For the fourth quarter of 2013, Con-way Truckload reported: • Revenue of $155.8 million, compared to last year’s fourth-quarter revenue of $155.2 million. Higher revenue included the effects of a 1.2 percent increase in loaded miles and a 0.8 percent increase in revenue per loaded mile, excluding fuel surcharge. These increases were partially offset by lower fuel-surcharge revenue. • Operating income of $8.9 million, an increase over the $8.5 million earned in the previous-year period. • Empty miles were 10.1 percent, compared to 9.9 percent in the previous-year fourth quarter. • Operating ratio exclusive of fuel surcharges of 92.7, compared to 92.9 in the fourth quarter of 2012. “Our truckload company delivered a solid fourth quarter, despite some declines in productivity due to the adverse weather in December,” Stotlar said. “Demand picked up as the quarter progressed, which aided asset utilization and network density. With improving demand trends adding stability to the pricing environment, Con-way Truckload is well positioned going into 2014,” he concluded.