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Celadon Group Reports Second Fiscal Quarter Financial Results And Declares Dividend

As previously reported on December 6, 2012, Paul Will was named President and Chief Executive Officer and Steve Russell relinquished the role of Chief Executive Officer, but will continue to serve full time as the Company’s Chairman and a named executive officer. In connection with Mr. Russell’s transition from the Chief Executive Officer position, the Compensation Committee of the Board of Directors voted to accelerate the vesting of Mr. Russell’s unvested equity grants. The acceleration of the vesting resulted in a non-cash increase to salaries, wages and employee benefits expense of approximately $1.6 million, or four cents in earnings per share, in the December 2012 quarter.

Chairman Steve Russell said, “This management change marks the culmination of a successful succession planning effort over the past several years. I want to recognize the efforts of not only Paul, but of Celadon’s entire employee base that through their hard work, dedication and focused drive has resulted in the improved financial results that have been achieved over the past couple of years.”

On January 22, 2013, our Board of Directors has approved a regular cash dividend to shareholders for the quarter ending March 31, 2013. The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on April 16, 2013 to shareholders of record at the close of business on April 4, 2013.

Conference Call Information

An investor conference call is scheduled for Thursday, January 24, 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 pin number 66010736 followed by the # key a few minutes prior to the start time. A replay will be available through February 24 at http://investors.celadontrucking.com.

Celadon Group Inc. ( www.celadongroup.com), through its subsidiaries, provides long-haul and regional full-truckload freight service across the United States, Canada and Mexico. The company also owns Celadon Logistics Services, which provides freight brokerage services, less-than-truckload services, as well as supply chain management solutions, including warehousing and dedicated fleet services. Celadon’s common stock is traded on the New York Stock Exchange under the symbol CGI.

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "plans," "intends," and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those in forward-looking statements: the risk that our perception of additional capacity due to seating trucks and perceived benefits thereof are inaccurate; the risk that our perception of changes in our customer base and perceived benefits thereto are inaccurate; the risk that managing our tractor fleet age does not result in greater flexibility and lower operating expenses; excess tractor and trailer capacity in the trucking industry; decreased demand for our services or loss of one or more of our major customers; surplus inventories; recessionary economic cycles and downturns in customers' business cycles; strikes, work slow downs, or work stoppages at our facilities, or at customer, port, border crossing, or other shipping related facilities; increases in compensation for and difficulty in attracting and retaining qualified drivers and independent contractors; increases in insurance premiums and deductible amounts; elevated experience in the frequency or severity of claims relating to accident, cargo, workers' compensation, health, and other matters; fluctuations in claims expenses that result from high self-insured retention amounts and differences between estimates used in establishing and adjusting claims reserves and actual results over time; increases or rapid fluctuations in fuel prices, as well as fluctuations in hedging activities and surcharge collection, the volume and terms of diesel purchase commitment, interest rates, fuel taxes, tolls, and license and registration fees; fluctuations in foreign currency exchange rates; increases in the prices paid for new revenue equipment and changes in the resale value of our used equipment; increases in interest rates or decreased availability of capital or other sources of financing for revenue equipment; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors; regulatory requirements that increase costs or decrease efficiency, including revised hours-of-service requirements for drivers and new emissions control regulations; our ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; the timing of, and any rules relating to, the opening of the border to Mexican drivers; challenges associated with doing business internationally; our ability to retain key employees; and the effects of actual or threatened military action or terrorist attacks or responses, including security measures that may impede shipping efficiency, especially at border crossings.

Readers should review and consider these factors along with the various disclosures by the company in its press releases, stockholder reports, and filings with the Securities Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

 
CELADON GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands except per share amounts)
(Unaudited)
 
  For the three months ended   For the six months ended
December 31, December 31,
2012   2011   2012   2011
 
REVENUE:
Freight revenue $116,794 $115,065 $238,910 $229,842
Fuel surcharge revenue 31,318   29,135   62,499   58,317  
Total revenue 148,112 144,200 301,409 288,159
 
OPERATING EXPENSES:
Salaries, wages, and employee benefits 41,639 37,562 82,040 75,122
Fuel 36,422 37,063 73,875 75,530
Purchased transportation 28,638 27,302 56,975 54,435
Revenue equipment rentals 1,653 933 3,650 1,906
Operations and maintenance 7,713 10,177 15,779 19,979
Insurance and claims 3,988 3,676 7,489 6,719
Depreciation and amortization 9,534 12,413 22,208 23,944
Communications and utilities 1,349 998 2,641 1,903
Operating taxes and licenses 2,509 2,595 5,097 5,104
General and other operating 2,076   1,668   3,924   3,297  
Total operating expenses 135,521   134,387   273,678   267,939  
 
Operating income 12,591 9,813 27,731 20,220
 
Interest expense 1,172 1,524 2,663 2,906
Interest income - (44 ) - (52 )
Other income (316 ) (211 ) (279 ) (498 )
Income before income taxes 11,735 8,544 25,347 17,864
Income tax expense 4,355   3,089   9,706   6,951  
Net income $7,380   $5,455   $15,641   $10,913  
 
Income per common share:
Diluted $0.32 $0.24 $0.67 $0.48
Basic $0.33 $0.25 $0.70 $0.49
 
Diluted weighted average shares outstanding 23,248 22,697 23,214 22,687
Basic weighted average shares outstanding 22,587 22,248 22,485 22,233
 
 

Key Operating Statistics

 
  For the three months ended   For the six months ended
December 31, December 31,
2012   2011 2012   2011
 
Average revenue per loaded mile (*) $1.564 $1.528 $1.560 $1.527
Average revenue per total mile (*) $1.389 $1.363 $1.392 $1.363
Average revenue per tractor per week (*) $2,826 $2,823 $2,861 $2,890
Average miles per seated tractor per week(**) 2,014 2,072 2,041 2,124
Average seated line-haul tractors(**) 2,698 2,633 2,717 2,581
 
*Freight revenue excluding fuel surcharge and our Mexican subsidiary Jaguar.
**Total seated fleet, including equipment operated by independent contractors and our Mexican subsidiary, Jaguar.
 
 
CELADON GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2012 and June 30, 2012
(Dollars and shares in thousands except par value amounts)
 
  (unaudited)    
December 31, June 30,
ASSETS 2012 2012
Current assets:
Cash and cash equivalents $8,094 $33,646
Trade receivables, net of allowance for doubtful accounts of $967 and $1,007 at December 31, 2012 and June 30, 2012, respectively

61,892

67,615
Prepaid expenses and other current assets 14,044 10,910
Tires in service 1,202 1,805
Assets held for sale 19,331 7,908
Income tax receivable 598 ---
Deferred income taxes 4,403   4,160  
Total current assets 109,564 126,044
Property and equipment 520,764 483,327
Less accumulated depreciation and amortization 104,003   112,871  
Net property and equipment 416,761 370,456
Tires in service 1,483 2,487
Goodwill 16,702 16,702
Investment in joint venture 4,006 3,491
Other assets 2,647   1,531  
Total assets $551,163   $520,711  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,533 $7,734
Accrued salaries and benefits 11,173 13,854
Accrued insurance and claims 10,096 10,138
Accrued fuel expense 9,576 6,029
Other accrued expenses 18,632 17,911
Current maturities of capital lease obligations 27,469 45,135
Income taxes payable ---   1,483  
Total current liabilities 81,479 102,284
Long-term debt 29,345 ---
Capital lease obligations, net of current maturities 181,131 185,436
Deferred income taxes 45,077 38,210

Stockholders' equity:

Common stock, $0.033 par value, authorized 40,000 shares; issued and outstanding 23,805 and 23,984 shares at December 31, 2012 and June 30, 2012, respectively

785

 

791

Treasury stock at cost; 882 and 1,155 shares at December 31, 2012 and June 30, 2012, respectively

(6,082

)

(7,966 )
Additional paid-in capital 102,312 101,154
Retained earnings 120,511 105,765
Accumulated other comprehensive loss (3,395 ) (4,963 )
Total stockholders' equity 214,131   194,781  
Total liabilities and stockholders' equity $551,163   $520,711  




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