Celadon Group, Indianapolis, reported revenue for the quarter ending Sept. 30 (its first fiscal quarter) increased 9.8% to $146.9 million in the 2008 quarter, compared to $133.8 million in the 2007 quarter.


However, freight revenue, which excludes fuel surcharges, was down 4% to $109.3 million in the 2008 quarter from $113.9 million in the 2007 quarter. Net income increased 12% to $2.8 million in the 2008 quarter from $2.5 million for the same quarter last year. Earnings per diluted share increased by 18.2% to $0.13 in the 2008 quarter from $0.11 for the same quarter last year.

"Celadon continued to exhibit strong execution in a difficult freight market during the quarter," said Chairman and CEO Steve Russell. "In the current economic environment, significant rate and volume increases are tough to come by. Our emphasis has been on targeted action that will make our network more efficient and position us to capitalize when the balance between industry capacity and freight demand becomes more favorable."

By closely managing freight selection, Russell explained, the company was able to obtain a small increase in loaded rate per mile, which was augmented by a significant reduction of non-revenue miles, to 9.8% in the September 2008 quarter from 10.6% in the September 2007 quarter. These improvements led to an approximately 1.5 cent per mile increase in average revenue per total mile (excluding fuel surcharges).

On the other hand, he said, average miles per tractor decreased as a result of a slow economy and choosing to eliminate loads that failed to meet the company's requirements. As a result, average freight revenue per tractor per week (excluding fuel surcharges) remained essentially constant with the same quarter last year, despite a very weak freight environment.

"In periods of weak demand, cost control is exceptionally important," Russell said. "We continued to actively manage our costs, particularly fuel expense. For the past year we have employed numerous tactics to improve fuel efficiency and lower costs. We have reduced the top speed of our tractors, improved tractor aerodynamics, added auxiliary heaters, implemented a strict tractor idling policy, renegotiated bulk fuel purchasing arrangements, and counseled our drivers in more efficient driving patterns. These efforts culminated in being named one of the winners of the Excellence Award under the EPA's Smartway program that recognizes fuel and emissions efficiency. Although the drop in fuel prices from July through September certainly benefited us this quarter, our concerted efforts over the past year contributed more to the quarter's results."

During the quarter, Celadon reduced its balance sheet debt and capital lease obligations by over $21 million. At Sept. 30, 2008, the company's balance sheet reflected $81.2 million in borrowings and capitalized leases and $146.1 million of total stockholders' equity.

"With $39.8 million available on our bank revolving credit line at Sept. 30, 2008, coupled with our current cash flow from operations, we are comfortable with our liquidity position," Russell said.

"Looking forward, we are confident in Celadon's strength and position in the industry. We believe our strategic growth plan is sound and that we have the team to execute it. We intend to keep our most important strategic asset-our corps of safe and experienced drivers-intact and ready to capitalize on increased market share when the combination of our efforts and a better freight market improve the operating environment."