Celadon Group, Inc. (NYSE:CGI) reported its financial and operating results for the three months and fiscal year ended June 30, 2015, the fourth fiscal quarter of the Company’s fiscal year ended June 30, 2015.
Revenue for the quarter increased $55.9 million, or 28.3%, to $253.3 million in the June 2015 quarter from $197.4 million in the June 2014 quarter. Freight revenue, which excludes fuel surcharges, increased $62.6 million, or 39.0%, to $223.3 million in the June 2015quarter from $160.7 million in the June 2014 quarter. Net income decreased $3.5 million, or 22.6%, to $12.0 million in the 2015 quarter from $15.5 million for the same quarter last year. Operating Income increased $9.2 million, or 75.4%, to $21.4 million in theJune 2015 period from $12.2 million from the same quarter last year. Earnings per diluted share decreased $0.18, or 27.7%, to $0.47in the June 2015 quarter from $0.65 for the same quarter last year. Excluding the $8.8 million in earnings and $0.37 in earnings per share in the prior year related to the sale of the minority ownership interest in TruckersB2B, LLC, net income increased $5.3 million, or 79%, to $12.0 million, and earnings per share increased $0.19, or 68%, to $0.47 in the 2015 quarter.
For the twelve months ended June 30, 2015, revenue increased $141.5 million, or 18.6%, to $900.8 million in 2015 from $759.3 million for the same period last year. Freight revenue, which excludes fuel surcharges, increased $154.4 million, or 25.1%, to $770.0 million in 2015 from $615.4 million for the same period last year. Operating Income increased $26.4 million or 67.0% to $65.8 million in the June 2015 period from $39.4 million from the same quarter last year. Net income increased $6.5 million, or 21.2%, to $37.2 million in 2015 from $30.7 million for the same period last year. Earnings per diluted share increased $0.23, or 17.8%, to $1.52 in 2015 from $1.29 for the same period last year. Excluding the $8.8 million in earnings and $0.37 in earnings per share in the prior year related to the sale of the minority ownership interest in TruckersB2B, LLC, net income increased $15.3 million, or 70%, to $37.2 million and earnings per share increased $0.60, or 65%, to $1.52 in the 2015 fiscal year.
Paul Will, President and Chief Executive Officer, made the following comments: “The financial results for the June 2015 quarter and 2015 fiscal year were the best in our history. Freight demand and capacity were closely aligned during the quarter, which allowed us to provide a high level of service to our customers at an increasing rate level. Operations, maintenance and fuel expenses all decreased as a percentage of revenue in the June 2015 quarter as compared with the June 2014 quarter, which was a result of a newer fleet with more fuel efficient equipment and the reduction in diesel fuel cost.
“The average age of the company’s tractor fleet was 1.2 years as of June 2015, which is a reduction from 1.8 years in June 2014. We have completed our tractor equipment refresh and are approximately halfway through our trailer refresh, which has resulted in continued improved fuel economy and lower overall maintenance costs. Gains on sales of assets were $9.5 million in the June 2015quarter compared with $2.3 million in the June 2014 quarter. Included in the gains on sales of assets is equipment sold independent of the disposition of equipment operated in the existing Celadon fleet by Celadon’s wholly owned Quality Equipment Sales and Leasing entity.”
Eric Meek, the Company’s Chief Operating Officer, made the following comments: “Our operating statistics continued to improve during the June 2015 quarter, which we believe is continuing to position the company for future growth. We increased our average seated tractor count by 1,305, or 40.9%, to 4,496 in the June 2015 quarter compared to 3,191 in the June 2014 quarter, a significant operating metric improvement that resulted in increased revenue for the quarter. This increase was a result of increasing the number of Celadon driving school locations, our successful acquisition strategy and the expansion of our independent contractor fleet. Our Asset Light revenue increased $10.7 million, or 63.7%, to $27.5 million in the June 2015 quarter from $16.8 million in the same period last year.
“Our primary focus over the past couple of years has been to expand our service offerings to our customers and grow our capacity of seated tractors, which has resulted in freight revenue growth for the June 2015 quarter of approximately 38.9% over the June 2014quarter. This growth strategy should position Celadon to better serve our customers, especially in the near future, as we believe truck capacity will continue to tighten for the truckload industry.
“Our average revenue per tractor per week increased $57, or 1.9%, to $3,058 in the June 2015 quarter, from $3,001 in the June 2014quarter. This was attributable to the increased revenue per loaded mile, which is a combination of rate increases and higher rate levels from acquired businesses. Our average revenue per loaded mile increased to $1.81 per mile in the June 2015 quarter from$1.62 in the June 2014 quarter.
“We have demonstrated significant growth over the past year in our Quality Equipment Sales and Leasing division, which is reflected in Gain on Disposition of Equipment in our income statement. We generated approximately $9.5 million in gains in the June 2015quarter and $23.6 million for the June 2015 fiscal year. This compares to only $2.3 million in the June 2014 quarter and $6.6 millionin the June 2014 fiscal year.”
Bobby Peavler, the company’s Chief Financial Officer, made the following comments: “Our balance sheet remains solid and we retain significant liquidity to support the growth of our business. On June 30, 2015 we had $366.4 million of stockholders’ equity, and our earnings before interest, taxes, depreciation and amortization was $42.7 million in the current June 2015 quarter. Our cash flow generated from operations will allow us to effectively continue to execute on our growth strategy.
Due to the expedited refresh of our equipment fleet we have approximately $50 million of older Property and Equipment that is anticipated to cycle out of operations over the next few months. We anticipate paying down debt with the proceeds from these disposals. Also, with the significant growth of our Quality division, we have reflected in our balance sheet approximately $100 millionof Equipment Held for Resale, which we would expect to continue to have a similar amount of assets and corresponding debt related to the on-going equipment inventory required to support the growth of equipment sales within the Quality Division in future periods.”
On July 28, 2015, the Board of Directors approved a regular cash dividend to shareholders for the quarter ending September 30, 2015. The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on October 23, 2015 to shareholders of record at the close of business on October 9, 2015. (Original Source)
Shares of Celadon closed today at $21.39, up $0.41 or 1.95%. CGI has a 1-year high of $29.15 and a 1-year low of $18.12. The stock’s 50-day moving average is $21.68 and its 200-day moving average is $24.32.
On the ratings front, Celadon has been the subject of a number of recent research reports. In a report issued on July 13, Raymond James analyst Art Hatfield upgraded CGI to Buy, with a price target of $26, which represents a potential upside of 21.6% from where the stock is currently trading. Separately, on July 10, KeyBanc’s Todd Fowler maintained a Buy rating on the stock and has a price target of $27.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Art Hatfield and Todd Fowler have a total average return of 3.1% and 17.1% respectively. Hatfield has a success rate of 40.0% and is ranked #1759 out of 3718 analysts, while Fowler has a success rate of 63.6% and is ranked #743.
Celadon Group Inc, through its subsidiaries, provides truckload transportation services between United States, Canada and Mexico. It offers services such as long-haul, regional, dedicated, less-than-truckload, intermodal and logistics services.