Exhibit 99
![]() | 9503 East 33rd Street Indianapolis, IN 46235-4207 (800) CELADON (317) 972-7000 |
For More Information: Craig M. Koven Communications Manager (800) CELADON, Ext. 7041 317-972-7041 Direct ckoven@celadongroup.com | FOR RELEASE October 21, 2008 4:01 p.m. ET |
CELADON GROUP REPORTS FIRST FISCAL QUARTER FINANCIAL RESULTS
INDIANAPOLIS – Celadon Group, Inc. (NASDAQ: CLDN) today reported its financial and operating results for the three months ended Sept. 30, 2008, the first fiscal quarter of the Company's fiscal year ending June 30, 2009.
Revenue for the quarter increased 9.8% to $146.9 million in the 2008 quarter from $133.8 million in the 2007 quarter. Freight revenue, which excludes fuel surcharges, was down 4.0% to $109.3 million in the 2008 quarter from $113.9 million in the 2007 quarter. Net income increased 12.0% 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.
Chairman and CEO Steve Russell said, "Celadon continued to exhibit strong execution in a difficult freight market during the quarter. 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, we were 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, average miles per tractor decreased as a result of a slow economy and choosing to eliminate loads that failed to meet our 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. 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.
"In our first fiscal quarter, we reduced our balance sheet debt and capital lease obligations by over $21 million. At Sept. 30, 2008, our 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.
"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."
Conference Call Information
An investor conference call is scheduled for Wednesday, Oct. 22, at 10:00 a.m. ET. Steve Russell and other members of management will discuss the results of the quarter. To listen and participate in the question-and-answer exchange, dial 866-800-8651 (international calls 617-614-2704) pin number 98526632 a few minutes prior to the starting time. A replay will be available through Dec. 22 by dialing 888-286-8010 (international calls 617-801-6888) and entering call back code 48192072.
This call is being webcast by CCBN and can be accessed on Celadon's web site at http://www.celadongroup.com. Any statistical and financial information that is discussed during the conference call also will be available at http://www.celadongroup.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 TruckersB2B Inc. (www.truckersb2b.com), which provides cost savings to member fleets, and Celadon Dedicated Services, which provides supply chain management solutions, such as warehousing and dedicated fleet services.
This press release and statements made by Celadon in its stockholder reports and public filings, as well as oral public statements by Celadon representatives, contain certain forward-looking information, usually identified by words such as "anticipates," "believes," "estimates," "projects," "intends," "expects," "plans," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Celadon's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in forward-looking statements. With respect to expectations concerning continued execution of the strategic plan and future operating results, as well as with respect to general business operations, the following factors, among others, could cause actual results to differ materially from those in forward-looking statements: 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; our ability to execute our strategic plan; 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 commitments, 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; increases in interest rates or decreased availability of capital or other sources of financing for revenue equipment; decreases in the resale value of our used 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; 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 the various disclosures made by Celadon in this press release, stockholder reports, and in its Forms 10-K, 10-Q, and other public filings. Celadon disclaims any such obligation to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.
For a more detailed discussion of these factors, please refer to the various disclosures made by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission.
- tables follow -
Consolidated Balance Sheets
(Dollars in thousands, except par value)
September 30, 2008 | June 30, 2008 | |||||||
ASSETS | (unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 163 | $ | 2,325 | ||||
Trade receivables, net of allowance for doubtful accounts of $1,296 and $1,194 at September 30, 2008 and June 30, 2008, respectively | 64,131 | 69,513 | ||||||
Prepaid expenses and other current assets | 16,796 | 16,697 | ||||||
Tires in service | 4,207 | 3,765 | ||||||
Income tax receivable | 828 | 5,846 | ||||||
Deferred income taxes | 4,068 | 3,035 | ||||||
Total current assets | 90,193 | 101,181 | ||||||
Property and equipment | 267,896 | 270,832 | ||||||
Less accumulated depreciation and amortization | 70,556 | 64,633 | ||||||
Net property and equipment | 197,340 | 206,199 | ||||||
Tires in service | 1,580 | 1,483 | ||||||
Goodwill | 19,137 | 19,137 | ||||||
Other assets | 1,294 | 1,335 | ||||||
Total assets | $ | 309,544 | $ | 329,335 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 9,165 | $ | 6,910 | ||||
Accrued salaries and benefits | 11,478 | 11,358 | ||||||
Accrued insurance and claims | 10,089 | 9,086 | ||||||
Accrued fuel expense | 10,083 | 12,170 | ||||||
Other accrued expenses | 10,792 | 11,916 | ||||||
Current maturities of long-term debt | 7,346 | 8,290 | ||||||
Current maturities of capital lease obligations | 6,505 | 6,454 | ||||||
Total current liabilities | 65,458 | 66,184 | ||||||
Long-term debt, net of current maturities | 26,924 | 45,645 | ||||||
Capital lease obligations, net of current maturities | 40,420 | 42,117 | ||||||
Deferred income taxes | 30,664 | 31,512 | ||||||
Minority interest | 25 | 25 | ||||||
Stockholders' equity: | ||||||||
Common stock, $0.033 par value, authorized 40,000,000 shares; issued 23,925,380 and 23,704,046 shares at September 30, 2008 and June 30, 2008, respectively | 790 | 782 | ||||||
Treasury stock at cost; 1,832,386 shares at September 30, 2008 and June 30, 2008 | (12,633 | ) | (12,633 | ) | ||||
Additional paid-in capital | 95,790 | 95,173 | ||||||
Retained earnings | 63,650 | 60,881 | ||||||
Accumulated other comprehensive loss | (1,544 | ) | (351 | ) | ||||
Total stockholders' equity | 146,053 | 143,852 | ||||||
Total liabilities and stockholders' equity | $ | 309,544 | $ | 329,335 | ||||
Key Operating Statistics
For the three months ended September 30, 2008 | For the three months ended September 30, 2007 | |||||||
Operating Statistics (U.S./Canada Truckload) | ||||||||
Average freight revenue per loaded mile (a) | $ | 1.511 | $ | 1.506 | ||||
Average freight revenue per total mile (a) | $ | 1.362 | $ | 1.346 | ||||
Average freight revenue per tractor per week (a) | $ | 2,680 | $ | 2,682 | ||||
Average miles per tractor per week | 1,967 | 1,992 | ||||||
Average tractors | 2,625 | 2,703 | ||||||
Tractors at end of period (b) | 2,947 | 2,988 | ||||||
Trailers at end of period (b) | 8,894 | 8,134 | ||||||
(a) Freight revenue excludes fuel surcharges | ||||||||
(b) Total fleet, including equipment operated by independent contractors and our Mexican subsidiary, Jaguar. |
Consolidated Income Statements
(in thousands, except per share amounts)
2008 | 2007 | |||||||
(unaudited) | ||||||||
Revenue: | ||||||||
Freight revenue | $ | 109,289 | $ | 113,854 | ||||
Fuel surcharges | 37,579 | 19,925 | ||||||
146,868 | 133,779 | |||||||
Operating expenses: | ||||||||
Salaries, wages, and employee benefits | 41,329 | 38,327 | ||||||
Fuel | 48,066 | 33,522 | ||||||
Operations and maintenance | 9,387 | 8,436 | ||||||
Insurance and claims | 3,619 | 3,541 | ||||||
Depreciation and amortization | 8,032 | 7,865 | ||||||
Revenue equipment rentals | 6,063 | �� | 6,972 | |||||
Purchased transportation | 15,761 | 21,970 | ||||||
Cost of products and services sold | 1,569 | 1,723 | ||||||
Communications and utilities | 1,218 | 1,231 | ||||||
Operating taxes and licenses | 2,384 | 2,161 | ||||||
General and other operating | 2,489 | 2,080 | ||||||
Total operating expenses | 139,917 | 127,828 | ||||||
Operating income | 6,951 | 5,951 | ||||||
Other (income) expense: | ||||||||
Interest income | (5 | ) | (19 | ) | ||||
Interest expense | 1,102 | 1,314 | ||||||
Other (income) expense, net | --- | 44 | ||||||
Income before income taxes | 5,854 | 4,612 | ||||||
Provision for income taxes | 3,085 | 2,111 | ||||||
Net income | $ | 2,769 | $ | 2,501 | ||||
Earnings per common share: | ||||||||
Diluted earnings per share | $ | 0.13 | $ | 0.11 | ||||
Basic earnings per share | $ | 0.13 | $ | 0.11 | ||||
Average shares outstanding: | ||||||||
Diluted | 22,031 | 23,753 | ||||||
Basic | 21,581 | 23,465 |