Celadon Group Inc. (NASDAQ:CLDN), Indianapolis, Ind., has reported its financial and operating results for the three and nine months ended March 31, 2005
, and the third fiscal quarter of the company's fiscal year ending June 30, 2005.
For the quarter, operating revenue increased 9.8% to $108.5 million, compared with $98.8 million for the same quarter last year. Net income increased to $2.7 million from $1.4 million and diluted earnings per share increased 59% to $0.27 from $0.17 in the same quarter last year, despite a 25% increase in weighted average shares outstanding primarily as a result of a May 2004 stock offering.
For the nine months, operating revenue increased 9.7%, to $319.8 million, compared with $291.6 million for the same period last year. Net income for the nine months increased to $8.3 million from a loss of $2.6 million. Earnings per diluted share increased to $0.81 from loss per diluted share of $0.34. During the prior year, the company recognized a $6.9 million, or $0.86 per diluted share, non-cash, after-tax impairment charge related to trailers. Excluding the impairment charge, net income increased 93%, to $8.3 million from $4.3 million in the same period last year.
Chairman and CEO Steve Russell commented, "Our company's performance continued to demonstrate significant improvement in the March 2005 quarter, which has traditionally been the most difficult quarter of the year. Income before taxes increased to $4.9 million, or 73% ahead of the March 2004 quarter. Our pre-tax margin on revenue increased to 4.5%, from 2.9% last year. Earnings per share of 27 cents, compared to 17 cents last year, represented our best March quarter in the history of the company.”
Russell further explained the company has shifted to a broader mix of freight, which has resulted in no single customer representing more than 5% of revenue. Freight related to new vehicle production is now less than 13% of total revenue. Revenue with the company’s largest customer was reduced by over 50% compared to the March 2004 quarter. Excluding this customer, revenue from all other customers increased by 16%.
Excluding fuel surcharge, the average revenue per total mile increased 7.5% to $1.324 from $1.232. Although fuel costs increased by over 45 cents per gallon, the company offset them with higher fuel surcharges.
The acquisition of certain assets of CX Roberson in January 2005 has been completely integrated, enabling the company to add over 200 CX tractors and drivers, while adding just two non-driver personnel. Utilization, or miles per week per tractor, declined from last year, in large part due to the integration process of the CX Roberson trucks, as well as a number of acquired trucks that are in the process of sale. Also, demand was somewhat below last year, particularly early in the March quarter.
Driver turnover was approximately 73%, down from the 2004 calendar year average of 79%.
Insurance costs improved, consistent with the company’ First Place Award as the Safest Fleet in America for fleets with over 100 million miles.
Cost controls have continued to be effective. Maintenance costs have trended positively compared to the December 2004 quarter, with a decline of over 7%.
TruckersB2B operating income increased to $340,000, up by 25% from the year earlier earnings of $270,000. The company acquired all minority interests for $2.4 million, and now owns 100% of the company. They acquired the outstanding shares at a valuation of $13 million for TruckersB2B.
The company also noted it has continued to reduce balance sheet debt through a combination of cash flow and financing new tractors and trailers under operating leases. Bank debt, zero when the company paid $22.7 million to acquire the assets of CX Roberson, was reduced to $9.5 million at the end of March 2005. At March 31, the company had $93.3 million of total stockholders' equity and $14.8 million in total borrowings and capital lease obligations, net of cash on hand, for a debt-to-capitalization ratio of approximately 14%.
Celadon Group Inc. is a truckload carrier that operates in the U.S., Canada and Mexico. Celadon is also the majority owner of TruckersB2B Inc., provider of cost benefits to more than 18,000 member fleets. For more information, go to www.celadongroup.com and www.truckersb2b.com.