Celadon Group Reports First Fiscal Quarter Financial Results

  Celadon Group Reports First Fiscal Quarter Financial Results

Business Wire

INDIANAPOLIS -- October 23, 2012

Celadon Group Inc. (NYSE: CGI) today reported its financial and operating
results for the three months ended September 30, 2012, the first fiscal
quarter of the Company’s fiscal year ending June 30, 2013.

Revenue for the quarter increased 6.5% to $153.3 million in the 2012 quarter
from $144.0 million in the 2011 quarter. Freight revenue increased 6.4% to
$122.1 million in the 2012 quarter from $114.8 million in the 2011 quarter.
Net income increased 50.9% to $8.3 million in the 2012 quarter from $5.5
million for the same quarter last year. Earnings per diluted share increased
50.0% to $0.36 in the 2012 quarter from $0.24 for the same quarter last year.

We are pleased with the results, as earnings per share of 36 cents exceeded
the September 2011 quarter of 24 cents per share. Operating ratio, which
represents operating expenses as a percent of revenue excluding fuel surcharge
was 87.6%, compared to 90.9% in the September 2011 quarter. Also, even in a
difficult economic and industry operating environment, this represents our
second consecutive quarter with a sub-90% operating ratio.

Several key factors contributed to the improvement, including an increase of
2% in revenue per loaded mile and decreases in operations, maintenance, and
fuel expense. These decreases were achieved through a significant equipment
refresh program that replaced out the majority of both our tractor and trailer
fleets with more fuel efficient equipment, effectively taking the average age
for each to 1.3 years and 2.3 years, respectively. Regarding equipment cost,
in addition to reduced average age, we have continued to streamline our
operations to reduce the number of tractors to trailers being operated to
support our existing business levels. Offsetting these improvements was a
decline in miles per seated truck of about 5% from the prior year, which was a
result of the weak freight environment. Through our series of opportunistic
acquisitions made over the last year, we have been able to increase our
average seated count by approximately 8%, which has positioned us to better
service our customers and provide the capacity to significantly increase miles
when additional fleets exit the market, as well as when the economic climate
improves.

Our balance sheet remains solid and we retain significant liquidity to support
the growth of our business. At September 30, 2012, we had $205.4million of
stockholders' equity, and $3.4 million in cash and cash equivalents. Our
earnings before interest, taxes, depreciation and amortization increased $5.6
million, or 25.2%, to $27.8 million in the current quarter compared with $22.2
million in the September 2011 quarter. The increase in cash flow generated
from operations will allow us to effectively continue to execute on our growth
strategy.

On October 22, 2012, our Board of Directors approved a regular cash dividend
to shareholders for the quarter ending December 31, 2012. The quarterly cash
dividend of two cents ($0.02) per share of common stock will be payable on
January 15, 2013 to shareholders of record at the close of business on January
4, 2013.

                         Conference Call Information

An investor conference call is scheduled for Wednesday, October, 24, at 11:00
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  866-200-6965 (international calls 646-216-7221) pin
number 54695425 a few minutes prior to the start time. A replay will be
available through November 24th at http://investors.celadontrucking.com.

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 Celadon Logistics Services, which
provides freight brokerage; Celadon Dedicated Services, which provides supply
chain management solutions, such as warehousing and dedicated fleet services;
and owns a minority interest in TruckersB2B (www.truckersb2b.com) which
provides cost savings to member fleets.

This press release contains certain statements that may be considered
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of
1934, as amended. Such statements may be identified by their use of terms or
phrases such as "expects," "estimates," "projects," "believes," "anticipates,"
"plans," "intends," and similar terms and phrases. Forward-looking statements
are based upon the current beliefs and expectations of our management and are
inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified, which could cause future events and actual results to
differ materially from those set forth in, contemplated by, or underlying the
forward-looking statements. Actual results may differ from those set forth in
the forward-looking statements. The following factors, among others, could
cause actual results to differ materially from those in forward-looking
statements: the risk that our perception of additional capacity due to seating
trucks and perceived benefits thereof are inaccurate; the risk that our
perception of changes in our customer base and perceived benefits thereto are
inaccurate; the risk that managing our tractor fleet age does not result in
greater flexibility and lower operating expenses; excess tractor and trailer
capacity in the trucking industry; decreased demand for our services or loss
of one or more of our major customers; surplus inventories; recessionary
economic cycles and downturns in customers' business cycles; strikes, work
slow downs, or work stoppages at our facilities, or at customer, port, border
crossing, or other shipping related facilities; increases in compensation for
and difficulty in attracting and retaining qualified drivers and independent
contractors; increases in insurance premiums and deductible amounts; elevated
experience in the frequency or severity of claims relating to accident, cargo,
workers' compensation, health, and other matters; fluctuations in claims
expenses that result from high self-insured retention amounts and differences
between estimates used in establishing and adjusting claims reserves and
actual results over time; increases or rapid fluctuations in fuel prices, as
well as fluctuations in hedging activities and surcharge collection, the
volume and terms of diesel purchase commitment, interest rates, fuel taxes,
tolls, and license and registration fees; fluctuations in foreign currency
exchange rates; increases in the prices paid for new revenue equipment and
changes in the resale value of our used equipment; increases in interest rates
or decreased availability of capital or other sources of financing for revenue
equipment; seasonal factors such as harsh weather conditions that increase
operating costs; competition from trucking, rail, and intermodal competitors;
regulatory requirements that increase costs or decrease efficiency, including
revised hours-of-service requirements for drivers and new emissions control
regulations; our ability to identify acceptable acquisition candidates,
consummate acquisitions, and integrate acquired operations; the timing of, and
any rules relating to, the opening of the border to Mexican drivers;
challenges associated with doing business internationally; our ability to
retain key employees; and the effects of actual or threatened military action
or terrorist attacks or responses, including security measures that may impede
shipping efficiency, especially at border crossings.

Readers should review and consider these factors along with the various
disclosures by the company in its press releases, stockholder reports, and
filings with the Securities Exchange Commission. We disclaim any obligation to
update or revise any forward-looking statements to reflect actual results or
changes in the factors affecting the forward-looking information.

                              - tables follow -

                                               
                                                    
CELADON GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars and shares in thousands except per share amounts)

(Unaudited)
                                                    
                                                    Three months ended
                                                    September 30,
                                                    2012       2011
REVENUE:
Freight Revenue                                     $122,108     $114,778
Fuel surcharge revenue                              31,189       29,182   
Total revenue                                       153,297      143,960
                                                                 
OPERATING EXPENSES:
Salaries, wages, and employee benefits              40,401       37,561
Fuel                                                37,452       38,466
Purchased transportation                            28,337       27,133
Revenue equipment rentals                           1,998        973
Operations and maintenance                          8,066        9,802
Insurance and claims                                3,501        3,042
Depreciation and amortization                       12,675       11,532
Communications and utilities                        1,292        905
Operating taxes and licenses                        2,588        2,509
General and other operating                         1,848        1,629    
Total operating expenses                            138,158      133,552
                                                                 
Operating Income                                    15,139       10,408
                                                                 
Interest expense                                    1,490        1,382
Interest (income)                                   ---          (8       )
Other income (expense)                              38           (286     )
Income before income taxes                          13,611       9,320
Income tax expense                                  5,349        3,862    
Net income                                          $8,262       $5,458   
                                                                 
Income per common share:
Diluted                                             $0.36        $0.24
Basic                                               $0.37        $0.25
                                                                 
Diluted weighted average shares outstanding         23,185       22,667
Basic weighted average shares outstanding           22,383       22,218
                                                                 



Key Operating Statistics
                                                        
                                          For the three        For the three
                                          months ended         months ended
                                          September 30,        September 30,
                                          2012                 2011
Average revenue per loaded                $1.557               $1.526
miles (*)
Average revenue per total                 $1.394               $1.363
mile (*)
Avg. revenue per tractor per              $2,896               $2,960
week (*)
Average miles per seated                  2,068                2,179
tractor per week(**)
Average seated line-haul                  2,736                2,529
tractors (**)
*Freight revenue excluding fuel surcharge and our Mexican subsidiary Jaguar.
**Total seated fleet, including equipment operated by independent contractors
and our Mexican subsidiary, Jaguar.


                                                             
                                                                    
CELADON GROUP, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2012 and June 30, 2012

(Dollars and shares in thousands except par value amounts)
                                                                    
                                                  (unaudited)
                                                  September 30,     June 30,
ASSETS                                            2012              2012
                                                                    
Current assets:
Cash and cash equivalents                         $3,353            $33,646
Trade receivables, net of allowance for
doubtful accounts of $1,012 and $1,007 at         68,283            67,615
September 30, 2012 and June 30, 2012,
respectively
Prepaid expenses and other current assets         17,032            10,910
Tires in service                                  2,025             1,805
Equipment held for resale                         29,187            7,908
Deferred income taxes                             4,501            4,160    
Total current assets                              124,381           126,044
Property and equipment                            534,383           483,327
Less accumulated depreciation and                 112,523          112,871  
amortization
Net property and equipment                        421,860           370,456
Tires in service                                  2,448             2,487
Goodwill                                          16,702            16,702
Investment in unconsolidated companies            3,785             3,491
Other assets                                      1,523            1,531    
Total assets                                      $570,699         $520,711 
                                                                    
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                  $7,660            $7,734
Accrued salaries and benefits                     11,502            13,854
Accrued insurance and claims                      10,203            10,138
Accrued fuel expense                              11,607            6,029
Other accrued expenses                            18,180            17,911
Current maturities of capital lease               35,834            45,135
obligations
Income taxes payable                              1,348            1,483    
Total current liabilities                         96,334            102,284
Capital lease obligations, net of current         199,009           185,436
maturities
Long term debt, net of current maturities         28,590            ---
Deferred income taxes                             41,329            38,210
Stockholders' equity:
Common stock, $0.033 par value,
authorized 40,000 shares; issued and
outstanding 23,973 and 23,984 shares at           791               791
September 30, 2012 and June 30, 2012,
respectively
Treasury stock at cost; 1,151 and 1,155
shares at September 30, 2012 and June 30,         (7,937     )      (7,966   )
2012, respectively
Additional paid-in capital                        101,747           101,154
Retained earnings                                 113,579           105,765
Accumulated other comprehensive loss              (2,743     )      (4,963   )
Total stockholders' equity                        205,437          194,781  
Total liabilities and stockholders'               $570,699         $520,711 
equity
                                                                    

Contact:

Celadon Group Inc.
Jeryl Desjarlais, Communications Manager
800-CELADON Ext. 7070
317-972-7070 Direct
jdesjarlais@celadongroup.com
 
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