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8-K - FORM 8-K (SECOND QUARTER FISCAL 2013 EARNINGS RELEASE) - CELADON GROUP INCform8k.htm



 
celadon logo
9503 East 33rd Street
Indianapolis, IN 46235-4207
(800) CELADON
(317) 972-7000


For more information:
Jeryl Desjarlais
Communications Manager
(800) CELADON Ext. 7070
(317) 972-7070 Direct
jdesjarlais@celadongroup.com
 
January 23, 2013


CELADON GROUP REPORTS SECOND FISCAL QUARTER FINANCIAL RESULTS
AND DECLARES DIVIDEND

INDIANAPOLIS – Celadon Group Inc. (NYSE: CGI) today reported its financial and operating results for the three and six months ended December 31, 2012, the second fiscal quarter of the Company’s fiscal year ending June 30, 2013.

Revenue for the quarter increased 2.7% to $148.1 million in the 2012 quarter from $144.2 million in the 2011 quarter.  Freight revenue, which excludes fuel surcharges, increased 1.5% to $116.8 million in the 2012 quarter from $115.1 million in the 2011 quarter. Net income increased 34.6% to $7.4 million in the 2012 quarter from $5.5 million for the same quarter last year. Earnings per diluted share increased to $0.32 in the 2012 quarter from $0.24 for the same quarter last year.

For the six months ended December 31, 2012, revenue increased 4.6% to $301.4 million in 2012 from $288.2 million for the same period last year.  Freight revenue, which excludes fuel surcharges, increased 4.0% to $238.9 million in 2012 from $229.8 million for the same period last year. Net income increased 43.1% to $15.6 million in 2012 from $10.9 million for the same period last year.  Earnings per diluted share increased to $0.67 in 2012 from $0.48 for the period last year.
 
President and Chief Executive Officer Paul Will commented on the December 2012 quarter.  “Earnings per share was thirty two cents compared with twenty four cents in the December 2011 quarter.  Our average rate per loaded mile improved to $1.56, increasing approximately three cents per mile from the December 2011 quarter, or approximately two percent.  Cost controls and operating efficiencies continued to positively impact results.  Operating ratio improved to 89.2 in the December 2012 quarter from 91.5 in the December 2011 quarter."

“Our balance sheet remains solid and we retain significant liquidity to support the growth of our business. At December 31, 2012, we had $214.1 million of stockholders' equity, $8 million in cash and $237.9 million of total balance sheet borrowings.  We had only $29.3 million in bank borrowings outstanding on our $100 million bank line at December 31, 2012.”

As previously reported on December 6, 2012, Paul Will was named President and Chief Executive Officer and Steve Russell relinquished the role of Chief Executive Officer, but will continue to serve full time as the Company’s Chairman and a named executive officer.  In connection with Mr. Russell’s transition from the Chief Executive Officer position, the Compensation Committee of the Board of Directors voted to accelerate the vesting of Mr. Russell’s unvested equity grants.  The acceleration of the vesting resulted in a non-cash increase to salaries, wages and employee benefits expense of approximately $1.6 million, or four cents in earnings per share, in the December 2012 quarter.
 
Chairman Steve Russell said, “This management change marks the culmination of a successful succession planning effort over the past several years.  I want to recognize the efforts of not only Paul, but of Celadon’s entire employee base that through their hard work, dedication and focused drive has resulted in the improved financial results that have been achieved over the past couple of years.”

On January 22, 2013, our Board of Directors has approved a regular cash dividend to shareholders for the quarter ending March 31, 2013.  The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on April 16, 2013 to shareholders of record at the close of business on April 4, 2013.


 
 

 
 
Conference Call Information

An investor conference call is scheduled for Thursday, January 24, at 11:00 a.m. EST. Steve Russell and other members of management will discuss the results of the quarter. To listen and participate in a questions-and-answers exchange, simply dial 866-200-6965 pin number 66010736 followed by the # key a few minutes prior to the start time. A replay will be available through February 24 at http://investors.celadontrucking.com.
 
Celadon Group Inc. (www.celadongroup.com), through its subsidiaries, provides long-haul and regional full-truckload freight service across the United States, Canada and Mexico. The company also owns Celadon Logistics Services, which provides freight brokerage services, less-than-truckload services, as well as supply chain management solutions, including warehousing and dedicated fleet services.  Celadon’s common stock is traded on the New York Stock Exchange under the symbol CGI.

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 and shares in thousands except per share amounts)
(Unaudited)

   
For the three months ended
   
For the six months ended
 
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
   
2011
 
                         
REVENUE:
                       
Freight revenue
  $ 116,794     $ 115,065     $ 238,910     $ 229,842  
Fuel surcharge revenue
    31,318       29,135       62,499       58,317  
Total revenue
    148,112       144,200       301,409       288,159  
                                 
OPERATING EXPENSES:
                               
Salaries, wages, and employee benefits
    41,639       37,562       82,040       75,122  
Fuel
    36,422       37,063       73,875       75,530  
Purchased transportation
    28,638       27,302       56,975       54,435  
Revenue equipment rentals
    1,653       933       3,650       1,906  
Operations and maintenance
    7,713       10,177       15,779       19,979  
Insurance and claims
    3,988       3,676       7,489       6,719  
Depreciation and amortization
    9,534       12,413       22,208       23,944  
Communications and utilities
    1,349       998       2,641       1,903  
Operating taxes and licenses
    2,509       2,595       5,097       5,104  
General and other operating
    2,076       1,668       3,924       3,297  
Total operating expenses
    135,521       134,387       273,678       267,939  
                                 
Operating income
    12,591       9,813       27,731       20,220  
                                 
Interest expense
    1,172       1,524       2,663       2,906  
Interest income
    -       (44 )     -       (52 )
Other income
    (316 )     (211 )     (279 )     (498 )
Income before income taxes
    11,735       8,544       25,347       17,864  
Income tax expense
    4,355       3,089       9,706       6,951  
Net income
  $ 7,380     $ 5,455     $ 15,641     $ 10,913  
                                 
Income per common share:
                               
Diluted
  $ 0.32     $ 0.24     $ 0.67     $ 0.48  
Basic
  $ 0.33     $ 0.25     $ 0.70     $ 0.49  
                                 
Diluted weighted average shares outstanding
    23,248       22,697       23,214       22,687  
Basic weighted average shares outstanding
    22,587       22,248       22,485       22,233  
                                 
                                 
                                 
                                 
                                 
                                 
                                 


 
 

 

 
Key Operating Statistics
                         
   
For the three months ended
   
For the six months ended
 
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
   
2011
 
                         
Average revenue per loaded mile (*)
  $ 1.564     $ 1.528     $ 1.560     $ 1.527  
Average revenue per total mile (*)
  $ 1.389     $ 1.363     $ 1.392     $ 1.363  
Average revenue per tractor per week (*)
  $ 2,826     $ 2,823     $ 2,861     $ 2,890  
Average miles per seated tractor per week(**)
    2,014       2,072       2,041       2,124  
Average seated line-haul tractors(**)
    2,698       2,633       2,717       2,581  
                                 
*Freight revenue excluding fuel surcharge and our Mexican subsidiary Jaguar.
 
**Total seated fleet, including equipment operated by independent contractors and our Mexican subsidiary, Jaguar.
 
 
 
CELADON GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2012 and June 30, 2012
(Dollars and shares in thousands except par value amounts)
   
(unaudited)
       
   
December 31,
   
June 30,
 
ASSETS
 
2012
   
2012
 
Current assets:
           
Cash and cash equivalents
  $ 8,094     $ 33,646  
Trade receivables, net of allowance for doubtful accounts of $967 and $1,007 at December 31, 2012 and June 30, 2012, respectively
    61,892       67,615  
Prepaid expenses and other current assets
    14,044       10,910  
Tires in service
    1,202       1,805  
Assets held for sale
    19,331       7,908  
Income tax receivable
    598       ---  
Deferred income taxes
    4,403       4,160  
Total current assets
    109,564       126,044  
Property and equipment
    520,764       483,327  
Less accumulated depreciation and amortization
    104,003       112,871  
Net property and equipment
    416,761       370,456  
Tires in service
    1,483       2,487  
Goodwill
    16,702       16,702  
Investment in joint venture
    4,006       3,491  
Other assets
    2,647       1,531  
Total assets
  $ 551,163     $ 520,711  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable
  $ 4,533     $ 7,734  
Accrued salaries and benefits
    11,173       13,854  
Accrued insurance and claims
    10,096       10,138  
Accrued fuel expense
    9,576       6,029  
Other accrued expenses
    18,632       17,911  
Current maturities of capital lease obligations
    27,469       45,135  
Income taxes payable
    ---       1,483  
Total current liabilities
    81,479       102,284  
Long-term debt
    29,345       ---  
Capital lease obligations, net of current maturities
    181,131       185,436  
Deferred income taxes
    45,077       38,210  
Stockholders' equity:
               
Common stock, $0.033 par value, authorized  40,000 shares; issued and outstanding  23,805 and 23,984 shares at December 31, 2012 and June 30, 2012, respectively
      785       791  
Treasury stock at cost; 882 and 1,155 shares at December 31, 2012 and June 30, 2012, respectively
    (6,082 )     (7,966 )
Additional paid-in capital
    102,312       101,154  
Retained earnings
    120,511       105,765  
Accumulated other comprehensive loss
    (3,395 )     (4,963 )
Total stockholders' equity
    214,131       194,781  
Total liabilities and stockholders' equity
  $ 551,163     $ 520,711  



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