Indianapolis-based truckload conglomerate Celadon posted net profits of $2.8 million on 9.1% higher revenues of $104.4 million in the first quarter of fiscal 2005. This marks a reversal of a $5.5-million loss posted in the same period last year, due largely to a $6.9 million charge to cover the lower resale value of its trailer fleet.
In comparing the quarters year-to-year without the trailer charge, Celadon said net income increased 115%.
“Our results reflect a strong freight environment and the efforts of a team that is demonstrating significant pricing discipline, successful execution of yield management strategies and continued focus on servicing our customers,” said chairman & CEO Steve Russell.
He noted that average revenue per tractor per week excluding fuel surcharges improved 8.8% to $2,864 as a result of higher rates per mile and miles per tractor. Also, average revenue per loaded mile, excluding fuel surcharge, increased 6.5%, to $1.38 and average revenue per total mile improved 7.3% to $1.28 as a result of higher freight rates and a lower percentage of non-revenue miles.
“Average miles per tractor per week improved 1.4%, to 2,238 as a result of improved operational discipline, increased freight demand and increased length of haul,” Russell added. “We were particularly pleased with our 8.7 cents per mile increase in revenue per total mile, excluding fuel surcharge, which we achieved while increasing our average length of haul.”
High fuel prices – on average 30% higher in Celadon’s first fiscal quarter of 2005 compared to the same period in 2004 – cut into profits at a cost of six cents per share. Celadon also substantially raised its driver pay and an increase in the exchange rate of the Canadian dollar hurt as well, as Celadon pays approximately 450 employees and owner-operators in that currency.
“We estimate that the difference in exchange rates negatively impacted our earnings by three cents per share compared with the same quarter last year,” Russell said. “That being said, though, based on the freight environment during the first half of October, tight truck capacity, available economic data, and the efforts of our sales force, we expect freight rates to continue to increase and freight demand to remain strong for the foreseeable future.”