UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 8, 2008
CON-WAY INC.
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(Exact name of Registrant as specified in its charter)
Delaware 1-5046 94-1444798
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
2855 Campus Drive, Suite 300, San Mateo, California 94403
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(Address of principal executive offices, including zip code)
(650) 378-5200
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.05 Costs Associated with Exit or Disposal Activities
Since the Company's investor conference call on October 23, the decline in
year-over-year tonnage at Con-way Freight has accelerated significantly as
the economy has continued to deteriorate. In response, Con-way Freight
reduced its nationwide workforce by approximately 8 percent, or about 1,450
positions. The reduction is in line with lower tonnage volumes which were
down 3.8 percent in October and 9.2 percent in November, respectively, from
last year's levels. The workforce reductions, which occurred on December 5,
were spread across most of the company's 303 operating locations in North
America. They included the elimination of 78 staff positions at the Con-way
Freight's Ann Arbor, Mich. general office; 60 positions at an administrative
center in Texas; and a realignment of its area and regional division
structure to streamline management. The December 5 workforce reductions will
result in an estimated fourth-quarter charge to earnings of approximately
$7.5 million, primarily for severance and other payroll-related expenses.
The charge for the December 5 workforce reduction is in addition to an
earlier-disclosed fourth-quarter charge of $20 million for costs associated
with Con-way Freight's network re-engineering initiative, which was completed
last month and resulted in the consolidation and closure of 40 service
centers. A copy of the press release is attached as Exhibit 99 and is
incorporated herein by reference. The foregoing description of the press
release is qualified in its entirety by reference to such exhibit.
The majority of the employee separation and relocation costs are expected to
be paid out in the fourth quarter of 2008. The costs and payments Con-way
Freight will incur in connection with the reduction are subject to a number
of assumptions and uncertainties, and as a result the actual results may
differ.
Item 8.01 Other Events
Con-way updated its earnings guidance for the fiscal year ending December 31,
2008. Con-way expects 2008 full-year earnings from continuing operations to
be between $2.20 and $2.35 per diluted share. Previously, Con-way expected
2008 full-year diluted earnings per share from continuing operations to be
between $2.60 and $2.80. The revised guidance excludes the effects of the
restructuring and impairment charges referred to herein, which are expected
to be incurred in the fourth quarter. The earnings guidance is based on an
assumed 48.2 million diluted shares and an expected tax rate of 38.6 percent
for 2008.
As a result of worsening economic conditions for the Company's investment in
Chic Holdings Ltd., a Shanghai, China-based transportation and logistics
company, based on preliminary estimates the company expects to record an
impairment charge of between $30 million to $35 million to write down the
value of its investment in Chic. Chic was purchased by Con-way's supply
chain management unit, Menlo Worldwide, LLC in 2007 for $60 million. The non-
cash impairment charge will be reported with 2008 fourth-quarter and full-
year results. The charge is based on an impairment review of goodwill and
other intangible assets recorded from the acquisition. The impairment charge
relates only to the Chic acquisition. The review is not expected to affect
an impairment of goodwill or other intangible assets for Con-way's other two
acquisitions in 2007, Cougar Holdings Pte Ltd of Singapore; and Joplin, Mo.-
based Contract Freighters Inc., which now does business as Con-way Truckload.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Description
99 Press release issued on December 8, 2008
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CON-WAY INC.
/s/ Jennifer W. Pileggi
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Date: December 8, 2008 Name: Jennifer W. Pileggi
Title: Senior Vice President, General
Counsel and Secretary