Celadon Group reports record net income, announces stock split

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Celadon Group reported its financial and operating results for the three and six months ended Dec. 31, the second fiscal quarter of the company’s fiscal year ending June 30, 2006. The Indianapolis-based company says the December quarter marked the highest quarterly net income and earnings per share for a quarter in its history.

For the quarter, revenue increased 12.5 percent, to $120.3 million from $106.9 million in the 2004 quarter. Freight revenue, which excludes fuel surcharges, was up 5.9 percent, to $102.9 million from $97.2 million in the 2004 quarter. Net income increased 71.4 percent, to $4.8 million from $2.8 million for the 2004 quarter year.

For the six months ended Dec. 31, revenue increased 12.7 percent, to $238.2 million from $211.3 million for the same period last year. Freight revenue was up 5.5 percent, to $206.2 million from $195.5 million for the same period last year. Net income increased 72.7 percent, to $9.5 million from $5.5 million for the same period last year.

“Our results for the quarter were assisted by a favorable relationship between freight demand and truckload capacity.” says Steve Russell, Celadon Group chairman and chief executive officer. “We believe capacity growth in our industry continues to be constrained by a shortage of qualified drivers. We address the driver shortage by recruiting safe and experienced drivers, providing newer equipment, and offering competitive compensation and lifestyle programs.”

Russell says the company continued to invest in revenue equipment during the quarter. “We believe carefully managing the average age of our fleet allows us greater flexibility in addressing the cost and reliability issues involving tractor engines designed to comply with stricter emissions requirements in 2007 and generally lowers our operating expenses,” he says.

In other news, the company announced that its board of directors had declared a 3-for-2 stock split on all shares of its outstanding common stock. The stock split will entitle all stockholders of record as of the close of business on Feb. 1 to receive one additional share of common stock for every two shares of common stock held on that date.

“Based on the recent operating environment, including freight demand that exceeds truckload capacity and moderating diesel fuel prices, we expect to continue to achieve modest rate increases that outpace increases in our costs,” Russell says. “Our intermediate term goal remains an operating ratio of 90 percent or better.”