updated: 4/25/2012 12:42:34 PM
Indianapolis-based Celadon Group Inc. (NYSE: CGI) is reporting net income of $5.7 million for its fiscal third quarter, compared to $2.3 million during the same period last year. President Paul Will says the company has made four acquisitions over the last year to address a growing driver shortage.
April 25, 2012
Indianapolis, Ind. -- Celadon Group Inc. (NYSE: CGI) today reported its financial and operating results for the three and nine months ended March 31, 2012, the third fiscal quarter of the Company’s fiscal year ending June 30, 2012.
Revenue for the quarter increased 10.5% to $153.2 million in the 2012 quarter from $138.7 million in the 2011 quarter. Freight revenue, which excludes fuel surcharges, increased 7.8% to $120.9 million in the 2012 quarter from $112.2 million in the 2011 quarter. Net income increased to $5.7 million in the 2012 quarter from $2.3 million for the same quarter last year. Earnings per diluted share increased to $0.25 in the 2012 quarter from $0.10 for the same quarter last year.
For the nine months ended March 31, 2012 revenue increased 5.9% to $441.2 million in 2012 from $416.8 million for the same period last year. Freight revenue, which excludes fuel surcharges, increased 0.8% to $350.6 million in 2012 from $347.9 million for the same period last year. Net income increased to $16.6 million in 2012 from $9.8 million for the same period last year. Earnings per diluted share increased to $0.73 in 2012 from $0.43 for the same period last year.
Steve Russell, Chairman and CEO, commented, “We are pleased with the March quarter results in which we were able to increase both seated line-haul tractors and revenue. Despite a significant increase in diesel fuel prices, which were 30 cents per gallon higher than in the prior year, our earnings per share increased to 25 cents compared with 10 cents for the March 2011 quarter. An increase in loaded miles and a 2.7% increase in rate per loaded mile, were the principal factors attributing to the improved results.”
Paul Will, President and COO, added, “To address the growing driver shortage in the industry, we have completed four asset based acquisitions during this fiscal year. As a result, our average seated count increased by 218 tractors, or 8.3%, from the December quarter. There are a significant number of fleets that have experienced poor financial performance during the recent past, which has resulted in their inability to refresh their fleets, resulting in a significant increase in fleet age. This has allowed us the opportunity to make strategic acquisitions, which results in an increased driver fleet at a time when capacity is exiting the marketplace. This should position us well to continue to grow our fleet and service offering in a truckload market that is becoming capacity constrained. With our young fleet, which was 1.6 years old as of March 31, 2012, we are able to attract drivers and provide excellent service to our customers. We are very proud of our team that contributed to the results.”
Mr. Will then addressed a change in accounting for leases: “We have determined that substantially all of our operating leases should be recorded as capitalized leases. This determination results from a recent accounting interpretation concerning customary lease provisions where the default terms are not objectively quantifiable and the remedies could result in the operating lease criteria not being satisfied. The result of this accounting change on our balance sheet at March 31, 2012, is to record approximately $191.4 million in net property and equipment as assets, and approximately $192.5 million in capitalized lease obligations as liabilities, with an immaterial effect on total stockholders' equity. This accounting change does not result in a material change to our historical or expected pre-tax earnings. However, it will result in a significant increase in EBITDA as lease expense is reclassified into depreciation and interest. We had previously disclosed the capitalized value of operating leases in our SEC filings on a voluntary basis.”
As a result, the Company will restate its consolidated balance sheets as of June 30, 2011 and 2010, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the three-year period ended June 30, 2011 included in the Company's June 30, 2011 Annual Report on Form 10-K and the consolidated interim financial statements included in the Company's Forms 10-Q as of and for the quarter and year to date periods ended September 30, 2011 and December 31, 2011, and related fiscal year 2011 comparative prior quarter and fiscal year to date periods included in those Form 10-Q's. Accordingly, those financial statements should no longer be relied upon.
The income statements and balance sheets included in this press release reflect management’s current estimates, associated with these reclassifications. The Company expects to file the restated financial statements before the Form 10-Q filing for the quarter ended March 31, 2012, or as soon as practicable thereafter.
On April 24, 2012, our Board of Directors has approved a regular cash dividend to shareholders for the quarter ending June 30, 2012. The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on July 18, 2012 to shareholders of record at the close of business on July 6, 2012.
Conference Call Information
An investor conference call is scheduled for Wednesday, April 26, at 11:00 a.m. EST. Steve Russell and other members of management will discuss the results of the quarter. To listen and participate in a questions-and-answers exchange, simply dial 866-200-6965 or 646-216-7221 code number 19009871 followed by the # key a few minutes prior to the start time. A replay will be available through June 30 at http://investors.celadontrucking.com.
Celadon Group Inc. (www.celadongroup.com), through its subsidiaries, primarily provides long-haul, full-truckload freight service across the United States, Canada and Mexico. The company also owns TruckersB2B Inc. (www.truckersb2b.com) which provides cost savings to member fleets; Celadon Dedicated Services, which provides supply chain management solutions, such as warehousing and dedicated fleet services; and Celadon Brokerage Services.
Source: Celadon Group Inc. (NYSE: GCI)