Indianapolis-based Celadon Group Inc. (NYSE: CGI) is reporting net income of $5.1 million for its fiscal second quarter, down from $7.4 million during the same period the previous year. Chief Executive Officer Paul Will says operations, maintenance and fuel expenses increased due to recent acquisitions.
January 31, 2014
Indianapolis, Ind. — Celadon Group Inc. (NYSE: CGI) today reported its financial and operating results for the three months ended December 30, 2013, the second fiscal quarter of the Company’s fiscal year ending June 30, 2014.
Revenue for the quarter increased 30.7% to $193.6 million in the December 2013 quarter from $148.1 million in the December 2012 quarter. Freight revenue, which excludes fuel surcharges, increased 34.6% to $157.2 million in the December 2013 quarter from $116.8 million in the December 2012 quarter. Net income decreased 30.5% to $5.1 million in the 2013 quarter from $7.4 million for the same quarter last year. Earnings per diluted share decreased to $0.22 in the December 2013 period from $0.32 for the same quarter last year.
For the six months ended December 31, 2013, revenue increased 22.3% to $368.7 million in 2013 from $301.4 million for the same period last year. Freight revenue, which excludes fuel surcharges, increased 25.2% to $299.2 million in 2013 from $238.9 million for the same period last year. Net income decreased 25% to $11.7 million in the December 2013 period from $15.6 million for the same period last year. Earnings per diluted share decreased to $0.49 in the December 2013 period from $0.67 for the period last year.
Paul Will, President and Chief Executive Officer, made the following comments: “Operations, maintenance and fuel expenses increased primarily due to older equipment associated with our most recent acquisitions, which will be somewhat alleviated in future periods when those assets are refreshed in a similar fashion to the remaining Celadon fleet.
“The average age of the Company’s tractor fleet was 1.7 years as of December 2013 and the average age of the trailer fleet was 2.4 years as of December 2013. Gains on sales of assets were $0.8 million in the December 2013 quarter compared with $4.0 million in the December 2012 quarter.
“We are pleased with our overall improvement in our operating statistics. The increase in average seated tractor count of 720, or 26.7%, to 3,418 in the December 2013 quarter compared with 2,698 in the December 2012 quarter was a significant operating metric improvement that resulted in increased revenue for the quarter. This increase was a result of expanding our recruiting efforts at terminal locations, having established a driving school as well as our previously announced acquisitions over the past year. In addition, we completed an acquisition of Osborn Transportation, Inc. based in Rainbow City, AL, during the December 2013 quarter, which operates approximately 190 tractors.
“Our primary focus over the past year has been to expand our service offerings to our customers and grow our capacity of seated tractors, which has resulted in freight revenue growth for the December 2013 quarter of approximately 35% over the December 2012 quarter. This growth strategy should position Celadon to better serve our customers now and especially in the near future as we believe truck capacity will continue to tighten for the truckload industry. The business generated from these acquisitions has been instrumental in our ability to add truck capacity and density in our current operating lanes. Although we have incurred acquisition and transition related costs in the December 2013 quarter that are one-time in nature, we believe these costs and future synergies related to these transactions should benefit Celadon in future quarters.
“Our average revenue per tractor per week increased $65, or 2.3%, to $2,880 in the December 2013 quarter, from $2,815 in the December 2012 quarter. In addition, our average revenue per loaded mile increased to $1.63 per mile in the December 2013 quarter from $1.57 in the December 2012 quarter.
“Our balance sheet remains solid and we retain significant liquidity to support the growth of our business. At December 31, 2013 we had $237.9 million of stockholders equity December 2013 quarter. Our increased cash flow generated from operations will allow us to effectively continue to execute on our growth strategy.”
On January 30, 2014, the Board of Directors approved a regular cash dividend to shareholders for the quarter ending April 30, 2014. The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on April 18, 2014 to shareholders of record at the close of business on April 4, 2014.
Conference Call Information
An investor conference call is scheduled for Friday, January 31 at 11:00 a.m. ET. Management will discuss the results of the quarter. To listen and participate in a questions-and-answers exchange, simply dial 800-774-6070 (or 630-691-2753) pin number 9330176 a few minutes prior to the start time. A replay will be available through February 28 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 Celadon Logistics Services, which provides freight brokerage; Celadon Dedicated Services, which provides supply chain management solutions, such as warehousing and dedicated fleet services.
Source: Celadon Group Inc.