Celadon Group Inc. on Monday, April 27, reported its financial and operating results for the three and nine months ended March 31, the third fiscal quarter of the company’s fiscal year ending June 30, 2009.
Revenue for the quarter decreased 23.0 percent to $106.9 million in the 2009 quarter from $138.9 million in the 2008 quarter. Freight revenue, which excludes fuel surcharges, was down 14.4 percent to $96.2 million from $112.4 million. Net income decreased to a loss of $2.1 million from income of $0.1 million.
For the nine months, revenue decreased 9.2 percent to $373.4 million from $411.3 million for the same period last year. Freight revenue, which excludes fuel surcharges, was down 10.8 percent to $304.0 million from $340.8 million. Net income decreased 45.5 percent to $2.4 million from $4.4 million.
“The 10 cents-per-share loss was the first loss in over seven years,” said Steve Russell, chairman and chief executive officer of the Indianapolis-based company. “The losses were sustained in January and February, with a profit earned in the month of March. Although the March quarter is traditionally the slowest from a seasonal perspective, January and February 2009 financial results were heavily impacted by major declines in freight volumes between the U.S. and Mexico and Canada. U.S. government surface transportation statistics indicate a decline of 27 percent for the month of January 2009 versus January 2008.”
Russell said the company believed a decline in U.S. imports, relating to the weakness of the U.S. economy, was a principal factor. “Secondly, the decline in the value of the Mexican peso, from 10 pesos to the U.S. dollar to 14 pesos to the dollar, adversely impacted U.S. exports to Mexico,” he said. “This dramatic decline in the peso’s value hurt Mexican imports in the period, but we believe will have a positive impact on its exports in the future. At the current exchange rate, Mexico has become much more competitive with China.”
Russell said reductions in staff, freezing of salaries, and implementation of a “hiring frost” have contributed to a lower cost structure for the company. “From a financial standpoint, our balance sheet remains strong,” said Russell, referring to a balance sheet debt of $59.3 million at March 31. Russell said that with $50.4 million available on Celadon’s bank revolving credit line at March 31, coupled with its current cash flow from operations, the company is comfortable with its liquidity position.