Used trailers hobble Celadon’s earnings
Aug 10, 2004 3:43 PM
Indianapolis-based truckload conglomerate Celadon Group said its net income doubled in its final fiscal quarter, but it lost money for its full fiscal year after writing down the value of used trailers in its fleet.
For its fourth fiscal quarter, Celadon said operating revenue increased 15.5% to $106.3 million and net income doubled to $2.4 million compared to the same period during its 2003 fiscal year. For the full year, revenue increased 8.4% to $397.9 million but the carrier ended up posting a loss of $300,000 after taking a $6.9 million after-tax charge to write down its used trailers.
Still, chairman & CEO Steve Russell said business conditions for trucking remain extremely favorable and he expects that will help Celadon increase profits. “The favorable relationship of supply and demand in the truckload industry [will help] us improve results,” he said. “[Our] plan is to enhance profitability through improving our freight mix and revenue yield, diversifying our customer base, upgrading our revenue equipment fleet, and emphasizing discipline in all aspects of our operations.”
Russell noted several key improvements: average revenue per tractor per week improved by 11.6%; average revenue per loaded mile, excluding fuel surcharge, increased 6.4%; average revenue per total mile, excluding fuel surcharge, improved 6.6%; average length of haul increased from 931 to 995 miles.
