INDIANAPOLIS APRIL 23rd, 2008 – Celadon Group Inc. (NASDAQ: CLDN) today reported its financial and operating results for the three and nine months ended March 31, 2008, the third fiscal quarter of the company’s fiscal year ending June 30, 2008.
For the quarter, revenue increased 15.4% to $138.9 million in the 2008 quarter from $120.4 million in the 2007 quarter. Freight revenue, which excludes fuel surcharges, was up 6.8% to $112.4 million in the 2008 quarter from $105.2 million in the 2007 quarter. Pre-tax income decreased to $1.1 million in the 2008 quarter from $6.6 million for the same quarter last year. Earnings per diluted share decreased to $0.01 in the 2008 quarter from $0.17 for the same quarter last year.
For the nine months ended March 31, 2008, revenue increased 10.9% to $411.3 million in 2008 from $371.0 million for the same period last year. Freight revenue was up 6.4% to $340.8 million in 2008 from $320.3 million for the same period last year. Net income decreased 74.3% to $4.4 million in 2008 from $17.1 million for the same period last year. Earnings per diluted share decreased to $0.19 from $0.72 the same period last year.
Chairman and CEO Steve Russell commented on the quarter, “Record diesel fuel prices, which soared late in the quarter, adversely affected earnings per share by ten cents compared with the prior year’s quarter. The lower U.S. dollar compared with the Canadian dollar hurt earnings by three cents per share, and a higher tax rate represented a one cent impact on earnings per share.
“There have been, however, meaningful positive developments. Rates have stabilized after four quarters of declines, and showed a slight increase sequentially, with the March 2008 quarter at $1.501 from the December 2007 level of $1.499. We believe that an increase in competitors exiting the business, a major decline in new truck builds, and the continued export of relatively new trucks overseas has begun to reduce supply in the industry. Further, we improved our average miles per tractor per week by 1.1% in the 2008 quarter, to 1,984 in the 2008 quarter, from 1,962 in the prior year March quarter. Our freight revenue per truck per week was relatively flat, despite the difficult operating environment.
“Diesel fuel prices, based on the U.S. Department of Energy reports, in the current March quarter were 99 cents per gallon higher, on average, than in last year's March quarter. The bigger issue has been the approximately 60 cents per gallon increase in diesel prices during the current March quarter from the first day of January compared with the last day of March. Due to the lag between the timing of fuel cost increase and the delay in the timing of the recovery from the customer through fuel surcharges, we had a lower than normal recovery percentage of the increased diesel fuel prices. This is typical in rising diesel fuel environments.
“We believe that the softer freight environment and escalating diesel fuel prices are resulting in more highly leveraged truckload carrier failures. An increased number of trucking failures combined with a significantly lower level of Class 8 truck builds should improve the supply and demand balance in the truckload industry over the next few quarters.
“Our balance sheet and borrowing capacity continue to be strong. At the end of March, our balance sheet reflected $97 million in borrowings and capitalized leases and $141 million of total stockholders' equity. As mentioned on the last earnings call, our primary credit facility has been increased to $70 million, with a $20 million accordion feature, and extended for a new five year term. Based on these factors, we believe Celadon is well-positioned to weather what we view as a temporary economic low point."
Conference Call Information
An investor conference call is scheduled for Thursday, April 24, at 10:00 a.m. ET. 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 800-706-7741 (international calls 617-614-3471) pin number 61650706 a few minutes prior to the start time. A replay will be available through June 24 by dialing 888-286-8010 (international calls 617-801-6888) and entering call back code 76106502.
This call is being Web cast by Thomson/CCBN and can be accessed via Celadon’s Web site at www.celadongroup.com.
Celadon Group Inc. (www.celadongroup.com), through its subsidiaries, primarily provides long-haul, full-truckload freight service across the United States, Canada and Mexico. The company also owns TruckersB2B Inc. (www.truckersb2b.com) which provides cost savings to member fleets; Celadon Dedicated Services, which provides supply chain management solutions, such as warehousing and dedicated fleet services; and Celadon Brokerage Services.
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