CORRECTING and REPLACING Celadon Group Reports September Quarter Results and Declares Dividend

Released : 28/10/2013

INDIANAPOLIS--(BUSINESS WIRE)-- Seventh graph, second sentence of release should read: The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on January 17, 2014 to shareholders of record at the close of business on January 6, 2014. (sted The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on January 17, 2013 to shareholders of record at the close of business on January 6, 2013)

The corrected release reads:

CELADON GROUP REPORTS SEPTEMBER QUARTER RESULTS AND DECLARES DIVIDEND

Celadon Group Inc. (NYSE: CGI) today reported its financial and operating results for the three months ended September 30, 2013, the first fiscal quarter of the Company’s fiscal year ending June 30, 2014.

Revenue for the quarter increased 14.2% to $175.1 million in the 2014 quarter from $153.3 million in the 2013 quarter. Freight revenue, which excludes fuel surcharges, increased 16.3% to $142.0 million in the 2014 quarter from $122.1 million in the 2013 quarter. Net income decreased 20.5% to $6.6 million in the 2014 quarter from $8.3 million for the same quarter last year. Earnings per diluted share decreased 22.2% to $0.28 in the 2014 quarter from $0.36 for the same quarter last year.

Paul Will, President and Chief Executive Officer, made the following comments: “We are pleased with our overall improvement in our operating statistics. The increase in average seated tractor count of 288, or 10.5%, to 3,024 in the September 2013 quarter compared with 2,736 in the September 2013 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 and training program at our Indianapolis headquarters as well as the acquisition of select assets and liabilities of Houg Special Services, Inc. based in Commerce City, Colorado, Land Span, Inc. based in Lakeland, Florida, TCI Logistics, Inc. based in Kernersville, North Carolina and Hoss Cartage and Distribution, Inc. based in Ayr, Ontario, which were all completed in the back half of the September 2013 quarter. The business generated from these acquisitions should help us continue to add truck capacity and density in our current operating lanes, while benefiting from future operating synergies over time. This 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. Our average revenue per tractor per week increased $14, or 0.5%, to $2,913 in the September 2013 quarter, from $2,899 in the September 2012 quarter. In addition, our average revenue per loaded mile increased to $1.597 per mile in the September 2013 quarter from $1.562 in the September 2012 quarter.

“The average age of the Company’s tractor fleet was 1.4 years as of September 2013 and the average age of the trailer fleet was 2.4 years as of September 2013. Gains on sales of assets were $1.2 million in the September 2013 quarter compared with $1.9 million in the September 2012 quarter. The Company has completed its current tractor and trailer refresh cycle.

“We believe we have put in place a lean cost structure, upgraded and expanded the fleet to one of the newest in the industry, broadened service offerings to customers, and positioned the Company to allow it to expand margins and profitability.

“Our balance sheet remains solid and we retain significant liquidity to support the growth of our business. At September 30, 2013, we had $234.3 million of stockholders' equity and our earnings before interest, taxes, depreciation and amortization was $26.7 million in the current September 2013 quarter. Our increased cash flow generated from operations will allow us to effectively continue to execute on our growth strategy.”

On October 24, 2013, the Board of Directors approved a regular cash dividend to shareholders for the quarter ending December 31, 2013. The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on January 17, 2014 to shareholders of record at the close of business on January 6, 2014.

Conference Call Information

An investor conference call is scheduled for Tuesday, October, 29, 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 dial888-517-2470 (or 630-827-6818) pin number 7416832 a few minutes prior to the start time. A replay will be available through November 29 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.

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
Sept 30,

2013

 

2012

 
REVENUE:
Revenue, before fuel surcharge $ 141,956 $ 122,108
Fuel surcharge revenue   33,146     31,189
Total revenue 175,102 153,297
 
OPERATING EXPENSES:
Salaries, wages, and employee benefits 46,654 40,401
Fuel 36,843 37,452
Purchased transportation 41,744 28,337
Revenue equipment rentals 1,652 1,998
Operations and maintenance 11,274 8,066
Insurance and claims 4,140 3,501
Depreciation and amortization 14,928 12,675
Communications and utilities 1,364 1,292
Operating taxes and licenses 2,832 2,588
General and other operating   2,139     1,848
Total operating expenses   163,570     138,158
 
Operating income 11,532 15,139
 
Interest expense 1,224 1,490
Interest income 0 0
Other (income) expense, net   (241 )   38
Income before income taxes 10,549 13,611
Income tax expense   3,983     5,349
Net income $ 6,566   $ 8,262
 
Income per common share:
Diluted $ 0.28 $ 0.36
Basic $ 0.29 $ 0.37
 
Diluted weighted average shares outstanding 23,662 23,185
Basic weighted average shares outstanding 22,930 22,383
 

CELADON GROUP, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2013 and June 30, 2013
(Dollars and shares in thousands except par value amounts)

   

(unaudited)

September 30,June 30,
ASSETS

2013

2013

 
Current assets:
Cash and cash equivalents $ 3,610 $ 1,315

Trade receivables, net of allowance for doubtful accounts of $869 and $919 at September 30, 2013 and June 30, 2013, respectively

81,518 77,623
Prepaid expenses and other current assets 33,058 13,434
Tires in service 1,015 1,245
Equipment held for resale 7,746 9,923
Income Tax Receivable 3,056 9,506
Deferred income taxes   4,236     4,342  
Total current assets 134,239 117,388
Property and equipment 621,155 612,236
Less accumulated depreciation and amortization   119,542     115,366  
Net property and equipment 501,613 496,870
Tires in service 1,527 1,785
Goodwill 20,415 17,730
Investment in unconsolidated companies 4,346 4,604
Other assets   3,201     2,785  
Total assets $665,341   $641,162  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,785 $ 10,401
Accrued salaries and benefits 10,416 11,197
Accrued insurance and claims 10,262 10,092
Accrued fuel expense 8,414 7,461
Other accrued expenses 21,988 20,070
Current maturities of capital lease obligations 30,631 25,669
Income taxes payable   ---     ---  
Total current liabilities 87,496 84,890
Capital lease obligations, net of current maturities 179,186 190,625
Long term debt, net of current maturities 104,591 78,137
Deferred income taxes 59,808 61,821
Stockholders' equity:
Common stock, $0.033 par value, authorized 40,000 shares; issued and outstanding 23,882 and 23,887 shares at September 30, 2013 and June 30, 2013, respectively 788 788

Treasury stock at cost; 595 and 696 shares at September 30, 2013 and June 30, 2012, respectively

(4,104 ) (4,811 )
Additional paid-in capital 104,890 103,749
Retained earnings 137,333 131,224
Accumulated other comprehensive loss   (4,647)   (5,261)
Total stockholders' equity   234,260     225,689  
Total liabilities and stockholders' equity $665,341     641,162  
 

Key Operating Statistics

 
For the three months ended

September 30,

2013

 

2012

 

Average revenue per loaded mile (*)

 

$

 

1.597

 

$

 

1.562

Average revenue per total mile (*) $ 1.406 $ 1.402
Average revenue per tractor per week (*) $ 2,913 $ 2,899
Average miles per seated tractor per week(**) 2,072 2,068
Average seated line-haul tractors (**) 3,024 2,736
*Freight revenue excluding fuel surcharge.

**Total seated fleet, including equipment operated by independent contractors and our Mexican subsidiary, Jaguar.

 

Adjusted Trucking Revenue(^)

$

147,658

$

134,302

Asset Light Revenue

13,218

10,862

Intermodal Revenue

7,524

5,168

Other Revenue

 

6,702

 

2,964

Total Revenue

$

175,102

$

153,297

 

^Trucking Revenue for US, Canada, Mexico.  Includes Fuel Surcharge.

Celadon Group Inc.
Jeryl Desjarlais, Communications Manager, 800-CELADON Ext. 7070
317-972-7070 Direct
jdesjarlais@celadongroup.com

Source: Celadon Group Inc.