Celadon Group, Inc. reported its financial and operating results for the three and nine months ended March 31, 2007, the third fiscal quarter of the company’s fiscal year ending June 30, 2007.
For the quarter, revenue increased 4.4% to $120.4 million in the 2007 quarter from $115.3 million in the 2006 quarter. Freight revenue, which excludes fuel surcharges, was up 4.4% to $105.2 million in the 2007 quarter from $100.8 million in the 2006 quarter. Net income decreased 17.0% to $3.9 million in the 2007 quarter from $4.7 million for the same quarter last year. Earnings per diluted share decreased by 15% to $0.17 in the 2007 quarter from $0.20 for the same quarter last year.
For the nine months ended March 31, 2007, revenue increased 5.0% to $371.0 million in 2007 from $353.5 million for the same period last year. Freight revenue was up 4.3% to $320.3 million in 2007 from $307.1 million for the same period last year. Net income increased 20.4% to $17.1 million in 2007 from $14.2 million for the same period last year. Earnings per diluted share increased 18.0% to $0.72 from $0.61 the same period last year.
Chairman and CEO Steve Russell commented on the quarter: ‘Our team responded favorably to a difficult freight market and the adverse impact of harsh winter weather, by continuing to manage costs effectively, and by building our customer and driver base by completing our second tuck-in acquisition in five months. Although we are not pleased by the bottom-line number, we are encouraged by continued success in our seated truck count, customer diversity, and critically, our safe and experienced corps of professional drivers. These advances were more than offset by decreased miles per tractor and an increase in the percentage of non-revenue miles.
‘As previously announced, we completed the purchase of certain assets of Warrior Express on February 28. The purchase for $8.3 million enabled us to add about 85 well qualified drivers, and a good customer base. As in the four previous acquisitions, there was no goodwill associated with the transaction. We’ve sold off about $3 million of the assets so far. Including this acquisition, we have added approximately 250 seated line haul trucks to the operating tractor count from the prior year’s quarter. In addition to adding drivers from the two acquisitions, we benefited from strong recruiting classes, our reputation on the road, and continued low driver turnover. We believe our growing fleet puts us in a position to capitalize on this added capacity when freight demand improves.
‘From a revenue perspective, our average revenue per loaded mile, excluding fuel surcharge, increased by 2.0%, to $1.52 in the 2007 quarter, from $1.49 in the prior year March quarter. This pickup was offset by higher non-revenue miles, which increased from 8.7% to 10.3% of total miles. Lower general freight demand, as well as empty miles run to on-board the Warrior drivers and position equipment for sale contributed to this increase. Overall, our rate per total mile was marginally up from a year ago.
‘From an expense perspective, the main negatives resulted from lower productivity and higher non-revenue miles, as our fixed costs, driver pay per mile, and fuel expense were not as efficiently covered by lower freight revenue per tractor. We also experienced costs associated with severe winter weather and selling the former Digby and Warrior equipment, which increased operations and maintenance costs and sale preparation costs.
‘In summary, we continue to execute on our long-term strategy of growth through diversification of our customer base from the two acquisitions in the past six months which further strengthens our future opportunities. We believe we are well positioned to benefit significantly when demand returns to prior levels.’