Indianapolis-based truckload carrier Celadon Group posted strong earnings both for its third fiscal quarter and the first nine months of fiscal 2006.
For its third fiscal quarter, Celadon said net income increased 74.1%, to $4.7 million on 6.3% higher revenues of $115.3 million versus its third fiscal period in 2005. For the first nine months of fiscal 2006, Celadon reported net income increased 71.1% to $14.2 million on 10.5% higher revenues of $353.5 million.
Chairman & CEO Steve Russell noted that during its third fiscal quarter, Celadon completed a 3-for-2 stock split effected in the form of a 50% stock dividend paid on February 15 this year – raising outstanding shares to approximately 15.3 million.
He added that significant earnings growth driven by strong operating results across nearly all of Celadon’s measures occurred during what he considers the carrier’s most challenging quarter due to seasonally lower demand and winter weather.
“Average revenue per tractor per week excluding fuel surcharge, our main measure of asset productivity, improved by 5.2% to $2,883 as a result of higher rates per mile and improved miles per tractor,” Russell said. “Our average revenue per loaded mile, excluding fuel surcharge, increased by 3.5% to $1.49 and our average length of haul increased by 28 miles to 1,008, compared to the same period last year.”
He also stressed that Celadon’s results for the quarter benefited from a favorable relationship between freight demand and truckload capacity. “We believe capacity growth in our industry continues to be constrained by a shortage of qualified drivers,” Russell said. “Based on the recent operating environment, including freight demand that exceeds truckload capacity, we expect to continue to achieve modest rate increases that outpace increases in our costs.”
He also noted that in its third fiscal quarter, the carrier’s annualized driver turnover reached 70%, compared with the industry average of 135% published by the American Trucking Associations.
“We continue to invest in our revenue equipment during the quarter. Our average tractor age is approximately 2.1 years, with a goal of 1.5 years based on a three-year trade cycle,” Russell added. “We believe carefully managing the average age of our fleet allows us greater flexibility in addressing the cost and reliability issues involving … 2007 engines.”