Truckload Carrier Celadon Returns to Profitability

Celadon Group returned to profitability — barely — in the quarter ending June 30. The truckload carrier reported a $200,000 net profit on $116.9 million in revenue for the quarter, compared with a $2.1 million loss on $106.9 million in the quarter ending March 31.

But net profit still was down 91 percent year-over-year, and revenue was down 24.4 percent compared to a year ago, as the weak economy pushed down its average rate per loaded mile 6.5 percent.

And despite industry efforts to reduce capacity, Celadon ended the quarter with a larger fleet than it had a year ago. Its tractor fleet grew 7.5 percent year-over-year to 3,168 units — one less than it had at the end of the March 31 quarter.

That illustrates the difficulty for truck operators in right-sizing their fleets.

Celadon will not be ordering new equipment anytime soon. "We don’t have any equipment on order after 2009 and don’t expect to order any equipment in calendar year 2010," said Chairman and CEO Steve Russell.

He said the quarter-to-quarter improvement was driven by new customers added in the past year, a seasonal pickup in shipments through June, lower fuel prices and cost cuts throughout the company.

Freight demand remains low, however, and truckload pricing is cutthroat. "The rate environment has continued to be quite difficult, with many fleets struggling and willing to accept non-compensatory pricing," Russell said.

Net income dropped 60 percent in the fiscal year ending June 30, falling to $2.6 million. Revenue for the year decreased 13.4 percent to $490.3 million, with freight revenue down 10.8 percent to $408.2 million.

Contact William B. Cassidy at wcassidy@joc.com.