This is a summary of the first quarter fiscal 2008 earnings call conducted by Con-Way (CNW: chart) on April 17, 2008
Management:
- President and CEO Doug Stotlar
- SVP and CFO Kevin Schick
- SVP and President of Con-way Freight John Labrie
- SVP and President of Menlo Worldwide Rob Bianco
- SVP and President of Con-way Truckload Herb Schmidt
- Vice President of Investor Relations Patrick Fossenier

Key Investor Issues:

- Net income fell to $22.5 million or 47 cents a share, from $27.8 million, or 57 cents a share in the same period last year.
- Cash and marketable securities totaled $158 million at the end of the first quarter
- The company lowered its outlook for the full year citing the weak economy and spiraling fuel costs, and its shares fell over 9% in extended trading.

First Quarter Highlights:

Consolidated revenues of $1.2 billion were up 19.9% from last year''s $1 billion enhanced by the acquisitions completed in the second half of last year.

- Weak demand, excess capacity, the extraordinary rise in energy costs and difficult winter weather affected the results though revenue from the truckload segment outperformed, increasing by 12 000%
- Earnings was $22.5 million or 47 cents a share down from $24.9 or 51 cents a share in the prior year, inclusive of 7 cents of expense related to aspects of wrapping up Con-way Freight business transformation initiatives.

- The quarter was affected by significant expenses related to weather effects, which reduced earnings per share by approximately 4 cents.
- Cash and marketable securities totaled $158 million and within the investment portfolio, the two auction rate securities amounting to $15 million are classified as long-term investments.
- Total debt came in at $959 million and quarterly interest expense was $16.4 million and investment income totaled $1.6 million.

Segmental Analysis

Con-way Freight

- Revenue was up 9.4% over last year through a combination of increased volume and yield.
- Earnings per day increased 3.1% over the first quarter of 2007.
- Volume growth was derived from market share gains with the top 50 customers where revenue is up 19% year-over-year and shipment volumes are up 13%.
- Revenue per hundred weight increased 7.8%.

Conway had yield growth of 2.1%, with yield growth positively affected by a 3.1% increase in year-over-year length of haul and a slight increase in average class.

- The competitiveness of the pricing environment accelerated due to weak demand, aggressive pricing tactics by major competitors, and the escalation of fuel costs adding an inflationary element to the mix.
- Con-way Freight''s operating ratio: LTL operations posted an OR of $95.2 million in the first quarter, affected by the remaining cost to complete Con-way Freight''s organizational transformation and winter weather.

Menlo Logistics

- Logistics revenue net of purchase transportation was $126 million, up 21%, aided by the acquisitions in Asia.
- Menlo generated operating income of $6.3 million, a $300,000 decrease compared to the same quarter of last year.
- The potential income gain was offset by expenses from integration of the acquisitions and the effect of weather-related issues in China, which increased costs and reduced revenues.
- The weak economy in China has also been affecting some of Menlo''s larger customers causing a negative effect on transactional volume with these accounts.

Con-way Truckload.

- Conway purchased CFI last August and is in the process of re-branding the company as Con-way Truckload.
- Revenue was $116 million after elimination of $35.1 million of revenue related to its intercompany business and contributed operating profit of $10.3 million.
- The operating ratio was 93.2 on total revenue or 91.4 on revenue excluding fuel surcharge.
- Con-way Truckload was successful in improving its asset utilization and reducing the empty miles in the quarter.

Earnings guidance

- Con-Way expects 2008 diluted earnings per share from continuing operations to be in the range of $3 to $3.40. This is a number that includes the unusual items.
- Included in the earnings guidance is $8 million for 2008 re-branding expense. $6 million of that is expected to occur at Con-way Freight and $2 million of it is for Con-way Truckload.
- Interest expense is expected to be $65 million this year, and 2008 investment income is forecasted to be about $6 million.
- For the full year 2008, Con-Way anticipates total capital expenditures, net of equipment sales, to be $220 million.

Operating guidance

– For Freight in the second quarter 2008 tonnage is anticipated to increase in a low single-digit percentage rate over the 2007 level.
- Second quarter revenue per hundred weight is expected to increase by a mid single-digit percentage
- Menlo Logistics continues to expect net revenue to increase by approximately 20% over last year, aided by contributions from its Asian acquisition.
-At Con-way Truckload, revenue per mile is expected to remain flat compared to current levels.
- Tractor utilization levels and empty mile ratios are expected to improve.
Key questions and answers from the first quarter fiscal 2008 earnings call conducted by Con-Way on April 17, 2008]
On the pricing side, can you give us an idea if it is broad-based?

We are seeing price pressure across the entire market. As you know, yield was up 2.1% year-over-year when you look at it net of fuel. This was positively impacted by a 3.1% increase in our year-over-year length of haul as well as a slight increase in average class.