Celadon Group Reports June Quarter And Full Fiscal Year Results And Declares Dividend

Jul 29, 2015, 16:43 ET from Celadon Group, Inc.

INDIANAPOLIS, July 29, 2015 /PRNewswire/ -- Celadon Group Inc. (NYSE: CGI) today reported its financial and operating results for the three months and fiscal year ended June 30, 2015, the fourth fiscal quarter of the Company's fiscal year ended June 30, 2015.

Revenue for the quarter increased $55.9 million, or 28.3%, to $253.3 million in the June 2015 quarter from $197.4 million in the June 2014 quarter.  Freight revenue, which excludes fuel surcharges, increased $62.6 million, or 39.0%, to $223.3 million in the June 2015 quarter from $160.7 million in the June 2014 quarter.  Net income decreased $3.5 million, or 22.6%, to $12.0 million in the 2015 quarter from $15.5 million for the same quarter last year.  Operating Income increased $9.2 million, or 75.4%, to $21.4 million in the June 2015 period from $12.2 million from the same quarter last year.  Earnings per diluted share decreased $0.18, or 27.7%, to $0.47 in the June 2015 quarter from $0.65 for the same quarter last year.  Excluding the $8.8 million in earnings and $0.37 in earnings per share in the prior year related to the sale of the minority ownership interest in TruckersB2B, LLC, net income increased $5.3 million, or 79%, to $12.0 million, and earnings per share increased $0.19, or 68%, to $0.47 in the 2015 quarter.

For the twelve months ended June 30, 2015, revenue increased $141.5 million, or 18.6%, to $900.8 million in 2015 from $759.3 million for the same period last year.  Freight revenue, which excludes fuel surcharges, increased $154.4 million, or 25.1%, to $770.0 million in 2015 from $615.4 million for the same period last year. Operating Income increased $26.4 million or 67.0% to $65.8 million in the June 2015 period from $39.4 million from the same quarter last year.  Net income increased $6.5 million, or 21.2%, to $37.2 million in 2015 from $30.7 million for the same period last year.  Earnings per diluted share increased $0.23, or 17.8%, to $1.52 in 2015 from $1.29 for the same period last year.  Excluding the $8.8 million in earnings and $0.37 in earnings per share in the prior year related to the sale of the minority ownership interest in TruckersB2B, LLC, net income increased $15.3 million, or 70%, to $37.2 million and earnings per share increased $0.60, or 65%, to $1.52 in the 2015 fiscal year.

Paul Will, President and Chief Executive Officer, made the following comments: "The financial results for the June 2015 quarter and 2015 fiscal year were the best in our history.  Freight demand and capacity were closely aligned during the quarter, which allowed us to provide a high level of service to our customers at an increasing rate level.  Operations, maintenance and fuel expenses all decreased as a percentage of revenue in the June 2015 quarter as compared with the June 2014 quarter, which was a result of a newer fleet with more fuel efficient equipment and the reduction in diesel fuel cost.

"The average age of the company's tractor fleet was 1.2 years as of June 2015, which is a reduction from 1.8 years in June 2014.  We have completed our tractor equipment refresh and are approximately halfway through our trailer refresh, which has resulted in continued improved fuel economy and lower overall maintenance costs.  Gains on sales of assets were $9.5 million in the June 2015 quarter compared with $2.3 million in the June 2014 quarter.  Included in the gains on sales of assets is equipment sold independent of the disposition of equipment operated in the existing Celadon fleet by Celadon's wholly owned Quality Equipment Sales and Leasing entity."

Eric Meek, the Company's Chief Operating Officer, made the following comments: "Our operating statistics continued to improve during the June 2015 quarter, which we believe is continuing to position the company for future growth. We increased our average seated tractor count by 1,305, or 40.9%, to 4,496 in the June 2015 quarter compared to 3,191 in the June 2014 quarter, a significant operating metric improvement that resulted in increased revenue for the quarter.  This increase was a result of increasing the number of Celadon driving school locations, our successful acquisition strategy and the expansion of our independent contractor fleet.  Our Asset Light revenue increased $10.7 million, or 63.7%, to $27.5 million in the June 2015 quarter from $16.8 million in the same period last year.

"Our primary focus over the past couple of years 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 June 2015 quarter of approximately 38.9% over the June 2014 quarter.  This growth strategy should position Celadon to better serve our customers, 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 $57, or 1.9%, to $3,058 in the June 2015 quarter, from $3,001 in the June 2014 quarter. This was attributable to the increased revenue per loaded mile, which is a combination of rate increases and higher rate levels from acquired businesses.  Our average revenue per loaded mile increased to $1.81 per mile in the June 2015 quarter from $1.62 in the June 2014 quarter.

"We have demonstrated significant growth over the past year in our Quality Equipment Sales and Leasing division, which is reflected in Gain on Disposition of Equipment in our income statement.  We generated approximately $9.5 million in gains in the June 2015 quarter and $23.6 million for the June 2015 fiscal year.  This compares to only $2.3 million in the June 2014 quarter and $6.6 million in the June 2014 fiscal year." 

Bobby Peavler, the company's Chief Financial Officer, made the following comments: "Our balance sheet remains solid and we retain significant liquidity to support the growth of our business. On June 30, 2015 we had $366.4 million of stockholders' equity, and our earnings before interest, taxes, depreciation and amortization was $42.7 million in the current June 2015 quarter.  Our cash flow generated from operations will allow us to effectively continue to execute on our growth strategy.

Due to the expedited refresh of our equipment fleet we have approximately $50 million of older Property and Equipment that is anticipated to cycle out of operations over the next few months.  We anticipate paying down debt with the proceeds from these disposals.  Also, with the significant growth of our Quality division, we have reflected in our balance sheet approximately $100 million of Equipment Held for Resale, which we would expect to continue to have a similar amount of assets and corresponding debt related to the on-going equipment inventory required to support the growth of equipment sales within the Quality Division in future periods."

On July 28, 2015, the Board of Directors approved a regular cash dividend to shareholders for the quarter ending September 30, 2015.  The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on October 23, 2015 to shareholders of record at the close of business on October 9, 2015.

Conference Call Information

An investor conference call is scheduled for Thursday, July 30 at 11:00 a.m. ET.  Management will discuss the results of the quarter.  To pre-register for the call please follow the links on our website at http://investors.celadontrucking.com.  For those without internet access or unable to pre-register, please dial in by calling 1-866-652-5200 (or 412-317-6060) a few minutes prior to the start time.  A replay will be available through August 28 at http://investors.celadontrucking.com. 

Celadon Group, Inc. (www.celadongroup.com), through its subsidiaries, provides long-haul, regional, local, dedicated, intermodal, temperature-controlled, flatbed and expedited freight service across the United States, Canada and Mexico. The company also owns Celadon Logistics Services, which provides freight brokerage services, freight management, as well as supply chain management solutions, including warehousing and distribution.

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.

- tables follow -

 

CELADON GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share amounts)

(Unaudited)

For the three months ended

For the year ended

June 30,

June 30,

2015

2014

2015

2014

REVENUE:

        Freight revenue

$223,313

$160,662

$769,950

$615,411

        Fuel surcharge revenue

29,954

36,724

130,806

143,900

                Total revenue

253,267

197,386

900,756

759,311

OPERATING EXPENSES:

        Salaries, wages, and employee benefits

72,168

56,432

261,216

209,938

        Fuel

31,790

44,391

144,687

171,695

        Purchased transportation

79,088

43,334

245,352

173,940

        Revenue equipment rentals

570

1,632

7,429

6,621

        Operations and maintenance

16,470

12,334

56,237

49,709

        Insurance and claims

8,464

4,900

29,091

19,252

        Depreciation and amortization

21,560

15,765

75,307

64,472

        Communications and utilities

2,251

1,733

8,361

6,409

        Operating taxes and licenses

5,061

3,736

16,443

13,275

        General and other operating      

3,892

3,291

14,457

11,195

        Gain on disposition of equipment

(9,468)

(2,340)

(23,619)

(6,629)

                Total operating expenses

231,846

185,208

834,961

719,877

                Operating income

21,421

12,178

65,795

39,434

Interest expense

2,468

1,227

7,776

5,071

Interest income

---

(4)

(7)

(12)

Other income, net

329

(15,295)

154

(15,996)

                Income before income taxes

18,624

26,250

57,872

50,371

Income tax expense

6,589

10,743

20,645

19,690

Net income

$12,035

$15,507

$37,227

$30,681

Income per common share:

        Diluted 

$0.47

$0.65

$1.52

$1.29

        Basic 

$0.48

$0.67

$1.56

$1.33

        Diluted weighted average shares outstanding

25,808

23,874

24,471

23,755

        Basic weighted average shares outstanding

25,270

23,127

23,844

23,014

 

 

CELADON GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2015 and June 30, 2014

(Dollars and shares in thousands except par value)

(unaudited)

June 30,

June 30,

ASSETS

2015

2014

Current assets:

        Cash and cash equivalents

$24,699

$15,508

        Trade receivables, net of allowance for doubtful accounts of              $1,002 and $942 at June 30, 2015 and June 30, 2014, respectively

130,892

105,968

        Prepaid expenses and other current assets

33,267

26,288

        Tires in service

1,857

2,227

        Equipment for resale

99,826

3,148

        Income tax receivable

17,926

6,395

        Deferred income taxes

7,083

7,651

Total current assets

315,550

167,185

Property and equipment

936,142

643,888

Less accumulated depreciation and amortization

147,436

151,059

Net property and equipment

788,706

492,829

Tires in service

2,173

2,720

Goodwill

62,154

22,810

Other assets

4,661

5,271

Total assets

$1,173,244

$690,815

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

        Accounts payable

$13,699

$11,017

        Accrued salaries and benefits

16,329

13,902

        Accrued insurance and claims

14,808

11,568

        Accrued fuel expense

10,979

11,306

        Accrued purchase transportation

16,259

10,213

        Other accrued expenses

62,027

25,490

        Current maturities long term debt

948

1,440

        Current maturities of capital lease obligations

62,992

67,439

        Income taxes payable

---

---

Total current liabilities

198,041

152,375

         Capital lease obligations, net of current maturities

366,452

119,665

        Long term debt, net of current maturities

133,199

75,436

        Other long term liabilities

953

8,061

        Deferred income taxes

108,246

76,275

Stockholders' equity:

        Common stock, $0.033 par value, authorized  40,000 shares; issued and outstanding              28,342 and 24,060 shares at June 30, 2015 and June 30, 2014, respectively

935

794

        Treasury stock at cost; 500 and 500 shares at June 30, 2015 and June 30, 2014, respectively

(3,453)

(3,453)

        Additional paid-in capital

195,682

107,579

        Retained earnings

195,422

160,068

        Accumulated other comprehensive loss

(22,233)

(5,985)

Total stockholders' equity

366,353

259,003

Total liabilities and stockholders' equity

$1,173,244

$690,815

 

             

Key Operating Statistics

For the three months ended

For the year ended

June 30,

June 30,

2015

2014

2015

2014

Average revenue per loaded mile (*)

 

$1.805

 

$1.624

 

$1.764

 

$1.613

Average revenue per total mile (*)

$1.613

$1.439

$1.572

$1.419

Average revenue per tractor per week (*)

$3,058

$3,001

$3,056

$2,884

Average miles per seated tractor per week(**)

1,896

2,086

1,944

2,032

Average seated line-haul tractors (**)

4,496

3,191

3,886

3,268

*Freight revenue excluding fuel surcharge.

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

Adjusted Trucking Revenue (^)

$208,676

$161,239

$748,195

$633,644

Asset Light Revenue

27,487

16,760

90,722

58,430

Intermodal Revenue

11,024

11,113

36,713

38,846

Other Revenue

6,080

8,274

25,127

28,391

Total Revenue

$253,267

$197,386

$900,756

$759,311

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

 

For more information:   Joe Weigel  Director of Marketing & Communications    (800) CELADON Ext. 7006   (317) 972-7006 Direct jweigel@celadontrucking.com

 

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SOURCE Celadon Group, Inc.



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