Celadon Group Inc. on Wednesday, July 25, reported its financial and operating results for the three months and fiscal year ended June 30.
Revenue for the quarter increased about 4 percent to $131.7 million in the 2007 quarter from $126.7 million in the 2006 quarter. Freight revenue, excluding fuel surcharges, was up 5 percent to $112.7 million in the 2007 quarter from $107.4 million in the 2006 quarter. Net income decreased about 20 percent to $5.1 million in the 2007 quarter from $6.4 million for the same quarter last year.
For the full year, revenue increased 5 percent to $502.7 million from $480.2 million for the prior year. Net income for the 2007 fiscal year increased 9 percent to $22.3 million compared with $20.5 million for the prior year.
“Despite a more challenging environment during the June 2007 quarter, we continued to execute on our business model of growth through acquisition, diversification of customer base, limiting exposure to any particular customer or industry, and managing our overall cost structure,” said Steve Russell, chairman and chief executive officer of Indianapolis-based Celadon.
“For the past three quarters, capacity has exceeded demand in the industry,” Russell said. “We have used this situation as an opportunity to make a series of acquisitions. Our acquisition of certain assets of Air Road Express in early June added new customers in lanes similar to Celadon’s north-south focus. As in the case of the acquisitions of Digby Transportation in October 2006 and Warrior Express in March 2007, the assets were purchased at appraised value, resulting in zero goodwill in the transactions for accounting purposes. As a financially strong and high-quality service provider, we believe we are well positioned to demonstrate further growth through acquisitions, in addition to internal growth when the freight environment improves.”
Celadon also announced a series of management changes. Tom Glaser, who joined the company in 2001 and has been president and chief operating officer since 2004, has decided to retire. “Tom has contributed greatly to Celadon’s growth and development as a respected industry leader over the past six years,” Russell said. “We wish Tom well in the future, and sincerely appreciate his meaningful contributions during his tenure with Celadon.”
Chris Hines, who has been a member of the board of directors for Celadon since June 2006, will replace Glaser as president and COO. Hines spent 16 years with General Electric, including as president of Transport International Pool, its North American trailer equipment leasing business. Under Hines’ direction, TIP’s revenue grew to $450 million, operated 150,000 trailers and had 1,200 employees. While in that position, he launched the TIP Mexican subsidiary, which is now the largest leasing company in Mexico. TIP’s operations also included more than 20,000 trailers in Canada, which was the largest equipment leasing company in Canada.
