INDIANAPOLIS – Celadon Group Inc. reported September 1 an 18.3 percent increase in revenue to $1.07 billion for the year ended June 30, 2016. But Celadon, one of the largest motor carriers in the U.S. with truckload, intermodal, expedited and other transport services, saw net income for the year drop 33.2 percent to $24.8 million from the year ended June 30, 2015.
Revenue for the last quarter increased $11.0 million, or 4.3 percent, to $264.3 million from the same period in 2015. Net income for the quarter plummeted 86.5 percent from the last quarter in 2015 to $1.6 million.
“The decline in net income and earnings per share for the 2016 quarter was attributable primarily to three factors,” the company reported in a statement filed with the Securities and Exchange Commission. “The largest component was an approximately $7.8 million, (or) 17 cents per diluted share, decline in gain on disposition of equipment. In addition, we recorded claims reserve adjustments of approximately $3.5 million, (about) 8 cents per diluted share, relating to a $2.5 million adverse judgment and a $1.0 million increase in loss development reserves on prior period claims. Finally, the combination of industry overcapacity, and sluggish freight volumes negatively impacted our average revenue per loaded mile, which compressed our variable and fixed cost margins.”
Citing “lackluster freight volumes,” high capacity and “significant rate pressure” from negotiating customers, the company filing stated that average revenue per total mile decreased about 1 percent from the last quarter of 2015, while average miles per seated tractor dropped about 2.4 percent.
“We anticipate seeing a similar trend in our average revenue per mile for the current quarter, and believe we will see flat to slightly down rates for the remainder of the calendar year,” the company reported.
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